Employment law update – amaze your colleagues with your knowledge!

2018 employment law updateDespite still having no real information about the impact that Brexit will have on our employment laws, there are some changes afoot. In this Blast we give you a whistle stop tour of all that we do know! Ignore at your peril!

Fit for Work Service scrapped!

We all need staff who are in work and able to work. But finding good information has been really hard for employers over the years. In fact, dealing with ill health issues is one of the things that managers often cite is the hardest part of their role with serious concerns about what can and cannot be said and equally, what can and cannot be expected of an employee who is not 100% fit to carry out their duties.

To support both employers and employees the Fit for Work service was launched in 2015, but mostly due to lousy take up of the service it has now been scrapped! 79% of HR departments and 65% of GP’s had never used it.

Although the Fit for Work service will be disappearing, the Government has said that in the near future there will be a number of significant changes made to the fit notes scheme, sick pay and, potentially, to occupational health itself.

Specifically, in relation to fit notes we have been told that there is the potential to extend fit note certification powers to other healthcare professionals, such as physiotherapists, psychiatrists and senior nurses. For those of you already frustrated with the different approach taken by GPs to completing them, they will also be developing a set of competencies to ensure greater consistency of approach when completing fit notes.

Gender Pay Gap Reporting

In April 2017, the Government introduced gender pay gap reporting and publishing for large organisations i.e. those with 250+ staff. This information had to be first published in April this year.

With a year’s notice you would think organisations would have published on time however a whopping 1,500 employers are said to have missed the deadline. Please make sure this is not you this year coming! Organisations that didn’t have to report last year but will have to this year due to increased employee numbers will be particularly at risk.

The penalty for not publishing on time is being named and shamed, plus the potential for an unlimited fine. Can your business afford adverse publicity and/or an unlimited fine?

Analysis of the 10,000 employers who did submit on time showed that 80% pay men more than women and that the hourly rate of women was on average 9.7% less than men.

If you are looking to incentivise senior members of your organisation to take this seriously then you might consider copying ITN who has announced that unless diversity targets are met this year, no bonuses whatsoever will be paid to senior management.

Childcare Voucher Scheme

All parents are extremely cost aware when it comes to childcare, but childcare voucher salary-sacrifice schemes are set to close to new entrants from October 2018 (an end date recently delayed from March 2018).

A new tax-free childcare scheme being introduced does not involve employers at all which is good news in respect of admin. Parents/carers will apply it for themselves. The scheme is called Tax-Free Childcare. The difference between the two schemes is that Tax Free Childcare offers savings per child per year, while childcare vouchers offer savings per parent per year. Some parents will be worse off under the Tax Free Childcare scheme.

Statutory payments 2018

Just a gentle reminder! We regularly come across organisations that are not paying correctly so please take some time to do some double checking.

Weekly paymentsFrom April 2018
Maternity/Paternity/Adoption £145.18
Sick pay£92.05
Lower Earnings Threshold£116
Hourly payments
National Living Wage Workers aged 25 and over£7.83
National Minimum Wage
Workers aged 21-24£7.38
Workers aged 18-20£5.90
Workers ages 16-17£4.20
Apprentice rate£3.70

Compensation Limits

We are seeing a veritable explosion of Tribunal claims. If one lands on your desk please do get in touch, our team at Jaluch is able to talk through your options and help you identify the approach that best suits your organisation.

Our approach generally is to find a way through that minimises stress and hopefully any compensation too. A bit of a contrast to a few of the lawyers who relish any opportunity to escalate conflict in order to bill as much as they can 😊

If you are calculating your possible exposure, compensation limits increased from 6 April 2018:

  • Maximum compensatory award for unfair dismissal – £83,682
  • Minimum basic award for unfair dismissal – £6,203
  • Maximum basic award for unfair dismissal and statutory redundancy payment – £15,240
  • Limit on guaranteed payments – £28
  • Limit on a week’s pay – £508

Taxation of PILONs and termination payments

The Government has tightened up on the tax treatment of termination payments. Pay in lieu of notice is now ALWAYS taxable. This has been effective since 6 April 2018

You particularly need to be aware that due to the Criminal Finance Act 2017 (as of September 2017) if you ask your HR or legal advisor to draw up a settlement agreement that ‘hides’ some of the notice

payment in order to reduce tax exposure in order to present a more favourable offer for your employee, the law now requires us to report you!

For more information on this, or if you are unsure of what is or is not taxable, please do contact us.

A further change to termination payments is that the Government plans to make any part of a termination payment over the amount of £30,000 subject to employer NICs. This was due to come into effect in April 2018 however the date has been put back and this is now set to come into force in April 2019.

General Data Protection Regulations

Unless you were in outer space in May, you will be fully aware that these Regulations came into force on 25 May 2018 to strengthen existing data protection rules. See our Blast on GDPR or contact us for more information on our GDPR eLearning or GDPR training.

The Regulations require you to operate a Breach Register. Is yours set up and do managers know what should or should not be recorded? We have no doubt that breaches occur in every organisation on a very frequent basis so if your Breach Register is currently sitting empty we would guess that is because the correct reporting is not taking place.

If you want to ensure your managers understand their responsibilities and that staff understand what is expected of them, we offer e-learning from just £10 per head so please do ask.

We are also aware that a few companies missed out on the preparations for this, Jaluch can support with data audits, data flow reviews and the development of the necessary paperwork (otherwise see www.docswizard.co.uk for template contracts and policies).

Definition of a ‘Worker’

Debates about zero hours plus the difference between ‘self-employed’ or ‘worker’ and ‘employee’ or ‘worker’ have dominated our headlines many times in recent years. Uber, Deliveroo, Pimlico Plumbers, Sports Direct etc. There has been much confusion and also a fair number of employers sticking their heads in the sands about the true status of those they are paying to do work. A bit of clarity is on its way though…

The ‘Workers (Definition and Rights) Bill’ has been introduced and is expected to come into force on 26 October 2018. The Bill would ban zero hours contracts, except where their use was agreed with the individual’s trade union. The bill is also set to clarify the definition of a ‘worker’ in light of recent case law.

Ahead of that, perhaps now would be a good time for you to review both any zero hours contracts you have and who you do or do not treat as a ‘worker’, rather than employee. Understanding any contractual changes and/or exposure now will help you budget both time and money better for later in the year. Again, be careful not to audit just your core staff, it is often those who operate on the periphery that can cause you legal headaches, so be thorough and if you would like support, then please do ask us.

Restricting Employment Allowance for Illegal Workers

With a date to be confirmed in 2018, employers will be unable to claim Employment Allowance for one year if they have:

  • Hired an illegal worker
  • Been penalised by the Home Office
  • Exhausted all appeal rights against that penalty

And if you are asking yourself what the Employment Allowance is, this is the allowance brought in a few years ago which provides a £3,000 benefit to employers which offsets the first £3000 each year of Class 1 NI contributions. Not exactly life changing for large employers, but really valuable for smaller employers.

But it’s not about the allowance of course, just make sure you stay on the right side of the Home Office, a few of our clients have had a few sticky moments (and some fines and other penalties) this past year so keep on top of your responsibilities and don’t assume they don’t ever clamp down hard!

IR35 in the Private Sector

The Government is considering extending the April 2017 changes to the public sector IR35 rules governing the taxation of off-payroll working to the private sector.

The aim is to “ensure individuals who effectively work as employees are taxed as employees, even if they choose to structure their work through a company”. We are to expect changes in 2018, and again this may require you reviewing the basis on which people work for you and identify whether things can stay as is, or whether consultation needs to begin with a view to changing the current arrangements. Please do contact us for more information or support with this.

Looking ahead of 2019

Brexit

Theresa May triggered the process for leaving the EU under Article 50 of the Lisbon Treaty, by serving notice of the UK’s intention to quit on 29 March 2017. That probably has been the only Brexit action that so far everyone understands and is clear about in this tortuous, nebulous, game of poker that feels desperately lacking in strategy and focus to many employers. We genuinely have no idea what the lay of the land will be in just 12 months’ time. So how can employers prepare? The reality of course is that they can’t. You can’t.

So, it’s still a case of ‘wait and see’.

Pay slip changes

Two changes affecting pay slip information will come into force on 6 April 2019:

  • Employers must include the total number of hours worked where the pay varies according the hours worked, for example under variable hours or zero hours contracts.
  • Payslips must be given to ‘workers’ and not just employees.

Are you ready for this and how do you intend communicating with your workers about this change? Perhaps you can involve your staff/employee reps/forum?

Parental Bereavement Leave

Looking a bit further ahead, we expect that in 2020, we will see the introduction of parental bereavement leave rights. This will provide at least two weeks’ leave for employees following the loss of a child under the age of 18. Employees with 26 weeks’ continuous service will be entitled to paid leave at the statutory rate.

Other changes on the way are likely to include:

  • Income tax personal allowance to be linked to the national minimum wage
  • Grandparental leave – David Cameron’s 2015 Government introduced grandparental leave through an extension of shared parental leave (SPL) but it was put on hold – we expect to see decisions made on this in 2019-2020
  • New legislation to allow organisations to monitor use of IT systems for legitimate business reasons
  • Public-sector exit payment to be capped
  • European Union (Withdrawal) Bill introduced
  • Caste discrimination prohibited – The Government has yet to introduce legislation to prohibit caste discrimination under s.9(5) of the Equality Act 2010

Need template contracts, policies, audits etc? Check out www.docswizard.co.uk for all the professional, legal documents you might need.

Need ad hoc advice without having to sign up to monthly payments or an annual contract? There is an alternative. Contact us at www.jaluch.co.uk

Need ongoing support or extra resource for a project, please do call us at Jaluch on 01425 479888.

Trusted, reliable and a fantastic alternative to the more formal legal businesses or those massive call centres that give such little personal support.

Or, if your managers need to step up a gear by getting to grips with the employment law issues they will have to manage, try our Employment Law Essentials training course. Here is what some of our delegates say about our training.

“They really understood our business and our people, and the style of delivery ensured the sessions were informative, interesting and fun! The feedback from those attending has been phenomenal …”

Good buzz. The trainers kept us all fully engaged”

“Great work in breaking things down to ease taking on board knowledge”

“The trainer’s attitude and personality made this session a lot more enjoyable than it could have been!”

Freightliner – Lynn Crump

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