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Top Tips for Employers in 2016
With the New Year just around the corner, we thought it would be appropriate to take a look at what things to expect in 2016 from a HR/Employment law perspective and to conclude with some top tips for employers.
Surprisingly, 2016 currently looks as though it is a quiet year in terms of new employment legislation, which is good news for employers. Whether this is down to the government’s promise to reduce red tape and only introduce new legislation if it removes a piece of legislation, or because the government has realised that employers are still suffering a headache from the Shared Parental Leave Regulations introduced in 2015 (possibly the most complex set out regulations we have had in years) is difficult to tell!
However for now, don’t expect any significant changes in terms of new legislation save for the application of the new regulations on the National Living Wage.
National Living Wage
This introduces from April 2016 essentially a new minimum wage for employees aged 25 or over for which employers need to start planning for particularly in relation to compliance and cost. Employers maybe interested in a report prepared by Christie and Co on the impact of the Living Wage on UK Businesses: http://i.emlfiles1.com/cmpdoc/7/9/2/8/1/1/files/13118_nlw-brochure.pdf?dm_i=2JA1,J4XC,57TUA4,19HX0,1
Employers with a turnover of more than £36m need to be aware of their obligations under the Modern Slavery Act 2015. This legislation requires commercial organisations to prepare a slavery and human trafficking statement for each financial year in which their total turnover is above the prescribed amount. They also provide that total turnover will be determined by taking into account the global turnover of the organisation and its subsidiary undertakings. Guidance from the Home Office can be accessed here:https://www.gov.uk/government/publications/transparency-in-supply-chains-a-practical-guide
Other than the above, there is little else save for some important decisions due from appeal courts on key issues.
For example we are expecting imminently that Employment Appeal Tribunal decision in the case of Lock v British Gas where the Tribunal held, following ECJ guidance, that commission payments should be included in the calculation for holiday pay. There has already been an awful lot of development on holiday pay and what should be included in the calculations – see our previous guidance: http://www.napthens.co.uk/update/holiday-pay-commission-lock-v-british-gas-decision-appealed/
A decision from the Court of Appeal in the case of USDAW v Ethel Austin Ltd (the “Woolworths case”) is also awaited. The ECJ delivered its decision on 30 April 2015, confirming that the words “at one establishment” should not be disregarded for the purposes of collective redundancy consultation (and therefore TULRCA is compatible with the European Collective Redundancies Directive (98/59/EC) (the Directive)).
The case will now return to the Court of Appeal to determine whether, on the facts, each branch of Woolworths and Ethel Austin was a separate establishment. However, given the ECJ’s decision, it seems likely that the Court of Appeal will overturn the EAT’s judgment and confirm that each store was an establishment for the purposes of TULRCA.
There may also be some development in relation to the Tribunal Fee System. Unison has sought permission to appeal to the Supreme Court against the decision of the Court of Appeal to reject their challenge to Tribunal Fees on the basis of being unlawful (due to affordability) and discriminatory. In the meantime, a formal review on the impact of tribunal fees by the Ministry of Justice is underway with completion of the review expected later in the year.
Top Tips for 2016
- Review how you calculate holiday pay and ensure it is compliant with recent court decisions which essentially say holiday pay should include regular overtime (possibly not ad-hoc voluntary over time), shift allowances, travel allowances and commission (and any other sums which form part of an employees “normal pay”. A failure to address this may result in contingent liabilities accruing.
- Review how you deal with travel time for peripatetic workers in terms of travel from home to the first client and returning home from the last client. Recent case law has suggested this is working time and needs to be considered for the purposes of rest breaks, rest periods and limit on weekly working hours. Though the decision did not cover “pay” there maybe arguments from staff, depending on the wording of their contracts that they should be paid for this time.
- Prepare for the implementation of the National Living Wage from April 2016 for those employees aged 25 or over. Consider the impact on costs within the business and also the devaluation of skilled work.
- Ensure, if you are not already obliged to auto-enrol staff into pensions, that you are aware of your staging date and have all necessary plans and steps to implement pension auto-enrolment.
- Pencil in a date to review your employment contracts and staff handbook to ensure they remain legally compliant (having regard to recent case law) and relevant for your business. This should include a review of the terms in your zero hour contracts.
Otherwise, Napthens Solicitors wish all readers the very best for Christmas and prosperous and healthy 2016.
Oliver McCann, Employment Partner, Napthens LLP – QCS Expert Employment Law Contributor