HR legislation tracker 2018 - Recent and pending employment law changes UK - Eversheds Sutherland
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HR legislation tracker 2018
Recent and pending employment law changes UK
Agency Workers Although the agency conduct regulations require agencies to disclose
• extending the remit of the Employment Agencies Standards details of the individual’s contractual terms in writing (including pay),
Inspectorate the involvement of intermediaries (eg umbrella companies) can mean
• greater clarity for workers over their pay and who pays it deductions from pay are obfuscated, often with the worker unaware of
intermediary involvement. The Government is therefore consulting over
how to amend the regulations to ensure agency workers receive a clear
breakdown of who pays them and any costs or charges deducted from
Status: their wages, such as PAYE and agency fees.
• Consultation on extending EAS role and providing greater clarity
for workers =closed on 9 May 2018 Umbrella companies are already under review by the Labour Market
Enforcement authority but the Government is also consulting on whether
their regulation should be more closely aligned with that of employment
agencies and businesses and, specifically, whether they should come
under the control of the EAS and be subject to minimum standards and
enforcement. The Consultation closed on 9 May 2018.
Apprenticeships Background/Implications
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14 June 2018• Apprenticeship target achievement reports (England) Since March 2017, prescribed groups and public sector bodies with 250
or more staff in England have been subject to a target of employing an
average of 2.3% of their staff as new apprentice starts between the
period 1 April 2017 to 31 March 2021. Annual reporting of progress
Status: each year must occur within six months of each reporting period (ie by
September in any given year up to 2021). See Regulations and
• Apprenticeships targets reports (England) = first reports fell Statutory Guidance.
due from April 2018.
Brexit Background/Implications
• Legislation is needed to ensure EU law is preserved in British Brexit negotiations are on-going over the terms of UK leaving the EU,
legislation on Brexit. although a transitional/ “implementation” period has been agreed in
principle between Member States which would postpone de facto
departure from 29/3/19 to up to 31/12/20. The legislative vehicle for
repealing the European Communities Act 1972 and to fill the various
Status:
gaps in UK legislation is the EU (Withdrawal) Bill, which is proving
• The EU (Withdrawal) Bill = published contentious in both houses and is still many weeks away from
agreement.
Data Protection Background/Implications
• EU reforms via General Data Protection Regulations (GDPR) The General Data Protection Regulations (GDPR) replaced the Data
• UK Data Protection Act Protection Directive 1995 from 25 May, 2018 and was accompanied in
the UK by a new Data Protection Act 2018. Organisations offering goods
and services to the EU need to be compliant and to adapt to significant
changes to data practice or risk significant penalties. See briefing.
Status:
• EU reform =in force 25 May, 2018
• Data Protection Bill = in force 25 May 2018
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14 June 2018Employment status/ Gig Economy Background/Implications
Developments in legal provision and rights of workers In 2017 the Government commissioned the independent Taylor Review
of Employment Practices in the Modern Economy. The review’s findings
were published on 11 July 2017 and contained broad-ranging and, in
some cases radical, proposals (Taylor Review Report).
The Government Response to the Taylor proposals was published on 7
Status:
February 2018. See briefing. Whilst the Response is comprehensive and,
• Government response to Matthew Taylor Review = published on the whole, receptive to the Taylor recommendations, just 2 steps are
on 7 February 2018 to be progressed straight away through secondary legislation (although
• Consultation on employment status = closed 1 June 2018; implementation won’t happen until 2019): a requirement that all
• Consultation on transparency = closed 23 May 2018; workers receive itemised payslips, stating the paid-for hours where
these vary and increased penalties for ETs in the event of aggravated
• Consultation on agency workers = closed 9 May 2018; and
breaches.
• Consultation on enforcement = closed 16 May 2018
• The Employment Rights Act 1996 (Itemised Pay Statement) Four further consultations were also published:
(Amendment) Orders (1 & 2) 2018 = due in force April • employment status (closed 1/6/18);
2019 • increasing transparency in the labour market (closed 23/5/18);
• agency workers (closed 9/5/18); and
• enforcement of employment rights (closed 16/5/18)
Executive Pay Background/Implications
Government proposals to strengthen corporate governance, including
senior pay and pay ratios. In its response to an earlier Green Paper, on 29 August 2017 the
Government set out proposed measures to strengthen corporate
governance of listed companies, particularly aimed at addressing
executive pay and pay ratios and strengthening employee engagement
(Government Response to Green Paper consultation). Many of the
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14 June 2018Status: proposals have been brought into effect already (such as a duty to
disclose the % of shareholders who oppose pay award proposals). In
• Amendment of UK Corporate Governance Code = expected addition, Draft Regulations, have been published which, if approved, will
2018 require larger quoted companies to disclose pay ratios (including that of
• (draft) The Companies (Miscellaneous Reporting) Regulations CEO vs average worker) in the annual directors’ remuneration report.
2018 = published
• Corporate Governance secondary legislation = awaited A Consultation regarding the FRCs proposed revisions to the Code closed
on 28 February 2018. Potential changes to the Code include: tighter
obligations upon remuneration committees over executive pay and pay
ratios, greater employee engagement and reporting on engagement,
increased emphasis upon board diversity, extending whistleblowing
mechanisms and defining the roles and responsibilities of senior
personnel, such as the Chair and CEO.
Gender Pay Reporting Background/Implications
Larger employers in the private and voluntary sectors (and the public
sector in England) must publish details of their gender pay gap. The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017
require larger private sector employers (250+ employees) to report
annually the difference between the mean and median average hourly
rate of pay for male and female employees, gender bonus gap and the
number of men and women across salary quartiles. Similar regulations
apply to public sector employers operating in England. Both sets of
Status:
regulations came into force on 31 March 2017, with the first reports falling
• Private/voluntary sector regulations = reporting date expired due by 30 March 2018 in the public sector and by 4 April 2018 in the
4 April 2018 (based on hourly pay rates as at 5 April 2017 and private sector. See briefing
bonuses paid between 6 April 2016 and 5 April 2017).
The Equality Commission has published a draft strategy for enforcing the
reporting requirements, alluding to potential action against private sector
• Public sector regulations = reporting date expired 30
employers. However, such steps do not appear to be supported by the
March 2018 (based on hourly pay rates as at 31 March 2017 regulations (in contrast with enforcement in the public sector).
and bonuses paid between 1 April 2016 and 31 March 2017).
Acas and GEO have published a joint guidance
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14 June 2018Immigration Background/Implications
New legislation to address Brexit Negotiations regarding UK withdrawal from the EU are still ongoing, with
immigration issues being at the forefront. Legislation in the form of a
new Immigration Bill will be needed to reflect agreed terms but also to
Status: fill the legal void resulting from Brexit. In the meantime, the Migration
Advisory Committee has conducted a Call for Evidence concerning the
• new Immigration Bill = awaited impacts of Brexit which closed on 27 October 2017. A response was
• Response to Call for Evidence on Brexit impacts = awaited
published on 19 April 2018.
Modern Slavery and worker-exploitation Background/Implications
The reporting requirements upon larger businesses, particularly the
focus upon demonstrating progress, continue to present challenges, The Modern Slavery Act 2015 introduced a requirement for qualifying
coupled with increased proactivity of the body for Labour Market organisations to publish an annual statement on the steps taken to
Enforcement. ensure that slavery and human trafficking are not taking place in their
business or supply chains. As many businesses prepare for their second
modern slavery statements in 2018, pressure is mounting to
demonstrate a progressive approach and how improvement on the
previous year is being achieved.
Status:
• Modern Slavery Act 2015 = second reports due in 2018 David Metcalf, the Director of Labour Market Enforcement, is also
proving proactive in galvanising resource and strategy in this area,
having engaged in consultation in 2017. Employers are therefore
potentially exposed to greater scrutiny, financial penalties but also
adverse media attention/ publicity. LME Strategy Doc
“Parental leave” Background/Implications
For grandparents: The extension of shared parental leave and pay Towards the end of 2015, the Government revealed plans to extend
to working grandparents and simplification of procedural rules. shared parental leave and pay to working grandparents and simplify the
existing procedural rules. Further details, possibly a Consultation, are
For bereaved parents: a proposed minimum period of leave for awaited.
parents who lose a child.
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14 June 2018Status:
• Grandparents’ leave = Consultation and draft legislation A new Bill, the Parental Bereavement (Leave and Pay) Bill, supported by
the Government, proposes two weeks’ leave for parents who lose a child
awaited
under the age of 18. Entitlement to leave would be a day 1 right, whilst
• Bereaved parents leave = Bill published, consultation access to statutory pay is likely to require a qualifying period of 6
closed 8 June 2018 (expected in force 2020) months’ service. A Consultation closed on 8 June 2018. The
Government aims for a 2020 implementation.
Severance payments –public sector Background/Implications
Public sector exit payments to be capped and opportunities for The Government has put forward various proposals to reduce and
leavers to return will be restricted standardise severance payments in the public sector. The proposals can
be summarised as:
• requiring repayment of public sector exit payments in certain
circumstances (as provided for under the Small Business, Enterprise
and Employment Act 2015). Although substantially delayed,
implementation of regulations to effect these changes (the
Repayment of Public Sector Exit Pay Regulations 2016) is still
Status:
awaited;
• Repayment of Public Sector Exit Pay Regulations 2016 = • placing a cap on exit payments of £95,000 (as provided by the
awaited Enterprise Act). Further consultation on draft regulations (the Public
Sector Exit Pay Regulations 2016) is expected in early 2018;
• The Public Sector Exit Pay Regulations 2016 (cap on severance
• introducing greater consistency to the basis of calculation of exit pay,
pay) = awaited
a response to consultation having been published in September 2016.
• Cross-sector framework for calculating exit pay = in force on The new framework was required to be applied on a voluntary basis
voluntary basis across the sector by summer 2017.
• Reform of CSCS = outcome of further consultation
awaited It remains to be seen whether or when these proposals will be brought
into force. Separately, the Government had also been looking to reduce
the terms of the Civil Service Compensation Scheme. A proposed
framework of provisions were agreed with some trade unions but not
all, culminating in the High Court ruling the revisions unlawful (JR ruling
July 2017.) Fresh consultation is being undertaken.
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14 June 2018Strike reforms Background/Implications
A Call for evidence regarding electronic balloting for strikes An independent review by Sir Ken Knight on the delivery of secure
methods of electronic balloting reported on 18 December 2017 and
advocated a very cautious approach to any steps towards e-balloting
(Knight Review). The Government response is awaited.
Status:
• Independent review of electronic balloting for strike =
published December 2017, Govt response awaited
Tax changes Background/Implications
Reduced application of the £30k exemption for termination payments The Government has conducted a prolonged review into the tax and NIC
treatment of termination payments, a system which has proved
Extension of IR35 principles to private sector confusing and open to exploitation. Changes from April 2018 incl:
• the differing tax treatments of contractual and non-contractual
PILONs are effectively removed;
• the legislation re-characterises any termination payment
Status: received by an employee as fully taxable where and to the
extent full notice is not worked.
• Termination pay tax changes = Finance (No 2) Act 2017 in
force 6 April 2018 From 2019, termination payments which benefit from the £30,000
• Extension of IR35 = consultation closes 10 August 2018 exemption in principle but are in excess of £30,000 will also attract
employer NICs.
The Government has published a Consultation which considers extending
the way in which the off-payroll rules (IR35) are now applied in the public
sector to many private companies. The principal change would be that
liability for determining status and for accounting for employer NICs and
correct tax would transfer to the hiring company to whom services are
provided. The consultation closes on 10 August 2018.
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14 June 2018Trade Secrets Background/Implications
New EU Directive to protect employer know-how The Trade Secrets Directive is intended to harmonise national laws of
EU Member States to protect against unlawful use of innovation. The
Directive therefore sets out the circumstances in which the acquisition,
use and disclosure of confidential information will be unlawful and also
the remedies available for infringement. See our briefing.
Status: In February 2018 the UK Government launched a very brief
• Trade Secrets Directive = in force 9 June 2018 Consultation, appending draft regulations to implement the Directive.
• Trade Secrets UK Consultation = closed 16 March 2018 The Trade Secrets (Enforcement, etc) Regulations 2018 came into force
on 9 June 2018.
• Trade Secrets (Enforcement, etc) Regulations 2018 = in force
9 June 2018.
Trade Union reforms Background/Implications
Changes to public sector facility time and options for check-off Amongst well-publicised strike reform proposals (see above) the Trade
Union Act contains various provisions changing the way in which unions
Changes to role of the Certification Officer
conduct themselves and how they are funded. Regulations regarding
changes to check-off in the public sector have been published but still
require approval. The anticipated implementation date was 10 March
2018 but a revised date is still awaited.
Further regulations concerning Certification Officers are awaited.
• Trade Union Act
= check-off regulations awaited *NB the check-off regulations exclude Welsh devolved authorities from
= Certification Officer changes awaited the scope of “public sector employer”.
Tribunal reform Background/Implications
Digitising ET proceedings and changing roles The rising number of tribunal claims that has followed the withdrawal of
the fees regime looks set to continue to dominate the headlines in 2018,
Devolution of the Employment Tribunal System in Scotland with claim numbers doubling in the aftermath.
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14 June 2018Status: In the meantime, proposals for increased digitisation of proceedings will
be rolled out throughout 2018, including some hearings, delegating some
• Devolution of ETs in Scotland = final Order awaited judicial tasks to case-officers and reducing the use of lay members. In
• Increased digitisation of ETs = ongoing addition, as a consequence of the Government Response to the Taylor
• Consultation regarding enforcement = closed 16 May 2018 Review (see Emp Status above), a consultation is underway regarding the
bolstering of sanctions for non-compliance with Tribunal Orders and
increased penalties are likely in 2019 regarding aggravated activity.
The Scotland Act 2016 paves the way for the devolution of the
employment tribunal system in Scotland. Scotland has consulted over a
framework to incorporate the employment tribunal within its existing
tribunal system. Timescale for this is not yet confirmed but is unlikely to
happen before 2020. The present Scottish government says it will
abolish tribunal fees after ET devolution
Whistleblowing Background/Implications
Regulators to disclosure whistleblowing allegations annually The Small Business, Enterprise and Employment Act 2015 made provision
for new regulations obliging prescribed persons to report annually upon
Greater protection for NHS job applicants the number of whistleblowing complaints received. Regulators and other
prescribed bodies need to publish their report containing required content
EC Draft Whistleblowing Directive before 30th September 2018. (Prescribed Persons (Reports on Disclosures
of Information) Regulations 2017).
Despite also being included in 2015 legislation (the Employment Rights
Status: Act), regulations to bring into effect protections for NHS job applicant who
make protected disclosures are still awaited. A Govt consultation over
• Reporting obligations = first reports due by end draft regulations closed on 12 May 2017, with a Response and revised
September 2018 draft regulations being published in March 2018. It is not yet known when
• Protection for NHS applicants = regulations awaiting
these new regulations will come into force.
implementation
• Draft Directive = published
In the meantime, the European Commission has published a draft
Directive. It is unclear whether this will apply to UK when it is eventually
approved but, were it to do so, it would require several quite significant
changes to UK law, not least to the scope of protected individuals.
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14 June 2018Last updated 14/06/18 car_lib1\14159737\1 10 14 June 2018
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