Reflecting on 2017 and Looking Ahead to 2018
As we near the end of 2017 we thought this was a great opportunity to look back at some of the key employment law changes in 2017 and consider what’s coming up in 2018. As always, please do get in touch with us at Jaluch if you need support with any staffing issue or training.
April 2017 – Immigration Skills Charge
From April 2017 employers sponsoring skilled workers under tier 2 of the points based system had to pay £1000 per certificate. As a business we have also noticed a bit of pressure being applied to businesses slow on the paperwork or not getting their act together on matters relating to the employment of foreign workers as they need to. Please be very careful and if you have a license to recruit and employ workers, make sure that license is not revoked because you slip up, miss deadlines or forget to do the necessary checking!
April 2017 – Apprenticeship Levy
Starting on 6th April 2017, employers with an annual payroll of more than £3million were required to pay a 0.5% levy on their total pay bill.
There has been mixed reaction reported in the press to this new approach both in terms of cost and the practical aspects. It is undoubtedly a significant cost for larger employers, and many employers will have to pay the levy even though they have no existing apprenticeship programme nor any desire to change training providers purely on the basis of who is able to deliver training under the scheme. It is therefore entirely possible that some businesses may look to reduce their payroll costs or reorganise business structures to avoid reaching the £3 million payroll threshold.
It has been reported in the press that whilst the levy is expected to raise £3bn a year for the government, it has actually resulted in a significant drop (60%) in the numbers of people taking up apprenticeships. This ‘collapse’ has been blamed on the confusion and complexity around the levy and scheme.
March 2017 – Trade Union Balloting Changed
In March 2017 the rules for a successful vote for strike action changed slightly, and now require a minimum 50% turnout and a majority vote in favour of industrial action. Industrial action in important public service will now require a strike vote of 40% of all eligible voters.
Interestingly, a recent article in the Times suggested that in the past year strike action in the public sector has dropped by 69% whilst rising by 80% in the private sector. Perhaps due to train strikes across the year? What is the experience in your sector?
How to tax and manage independent workers is an ongoing challenge for both government and employers. There is no doubt though that there is a lot of public attention on this so no doubt it will be an area for all of us to keep an eye on.
In terms of legal cases, Uber and Pimlico Plumbers both have ongoing cases regarding whether individuals are self-employed or workers. At the time of writing, the EAT has upheld the decision that Uber drivers were workers, although Uber has recently applied to appeal to the Court of Appeal.
Pimlico Plumbers also lost their case in the Court of Appeal as it was ruled the individuals were workers rather than self employed and have already been granted permission to appeal to the Supreme Court, with the case due to be heard next year.
In contrast, Deliveroo won a case recently against the Independent Workers Union of Great Britain (IWBG), when the Central Arbitration Committee ruled that Deliveroo workers were self-employed because of their freedom to substitute – allowing other riders to take their place on a job. IWGB were arguing that Deliveroo riders wanted workers’ rights. In recent weeks we note though Deliveroo have started to talk about introducing an insurance scheme to protect the pay of their riders who are off work due to sickness.
Watch this space!
Shared Parental Leave
Take note! There have been a couple of recent cases regarding Shared Parental Leave, and although both cases have only been at Employment Tribunal, so not binding, it certainly indicates the direction case law is likely to be going.
In Ali V Capita, and Snell V Network Rail Tribunals took the view that it was indirectly discriminatory for a woman to receive a period of enhanced maternity pay during her maternity leave, but to only give statutory paternity pay to men who took the equivalent period of Shared Parental Leave. Although these decisions aren’t binding, it indicates the view that’s likely to be taken and as such we recommend looking carefully at your policies and making sure that your pay and benefits are equivalent in respect of your maternity/adoption and your Shared Parental Leave policies.
July 2017 saw a historic moment in employment law, with the Supreme Court abolishing Tribunal fees on the basis that they were unlawful (indirect sex discrimination!)
In 2013 when tribunal fees were introduced the number of claims being brought dropped by over 70%.
Interestingly, prior to 2013 one of our most popular courses at Jaluch was a one day Employment Law in a Nutshell for managers. But in recent years we have delivered very little of it, perhaps because employers have been changing training budget priorities given the drop in tribunal claims.
Our experience currently though is that given the complexity of employment law far too many managers are floundering when it comes to knowing what they can and can’t do. Grievances are currently coming through to us thick and fast, and with so much workplace conflict managers really do need to be up to speed with what the law does and does not permit.
Given that, perhaps now is the time to reintroduce employment law training as there is no doubt a tsunami of claims that will hit the courts in 2018 following the abolition of fees – and added to by current sensitivities around harassment and discrimination as a result of Weinstein.
Brexit is of course looming and reflection on 2017 feels incomplete without mentioning it, albeit briefly. Currently Brexit is due to be completed by April 2019, although clearly there’s a lot of negotiation to be done before then! The Government hasn’t been particularly clear about what will happen to current legislation after Brexit however, the Prime Minister has introduced the Great Reform Bill, which will, once it has been agreed, convert current European law into domestic law, wherever practical.
At Jaluch we thought that by this stage we would have greater clarity on issues around a number of employment related issues, but all we can currently see from where we are sitting is a quagmire of uncertainty and chaos. Our best advice at the current time therefore is to support directors, managers and staff to deal with times of uncertainty and change. Take time to help people understand how to build resilience and how to become more adaptable and flexible in the way they approach life. These are invaluable skills at the present time.
Those who get stressed will invariably be those who seek definitive answers and who struggle to cope with uncertainty. But you don’t want anyone going off with stress or resigning due to anxiety, so consider putting in place the support to deal with this now and please do get in touch with us if you would like support in the form of training for groups or coaching for any individual staff.
So, Looking Ahead to 2018…
Taxation on Termination Payments – April 2018
Take note! From April 2018, there will no distinction between contractual and non-contractual Pay in Lieu of Notice payments (PILON), previously if PILON was mentioned in the contract it would be taxable, but if there wasn’t any provision for PILON in the contract, it could be paid free of tax. This will mean that all PILON payments will be taxable and subject to class 1 NICs.
Although any termination payments (except PILON) up to £30,000 will still remain free of tax and NICs, any payments above £30,000 will now be subject to tax and NICs (previously only subject to tax).
As another point, you might also want a discussion about the merits of training for HR staff on the Criminal Finance Act that came into force in October 2017 and that brings with it the requirement to formally report any individuals seeking to evade tax. HR professionals should not be ignorant of these new legal obligations.
Having given training to our own team in this, please do ask if we can support with this.
The Government is introducing further deterrents to employing illegal workers and from April 2018 employers will be unable to claim the Employment Allowance for 1 year if they have hired an illegal worker, been penalised by the Home Office and exhausted all appeal rights.
The Employment allowance was introduced in 2014 and allows businesses to forego paying the first £2000 of Employers National Insurance contributions. The allowance should be automatically deducted by payroll, but is only applicable to employees, not freelancers or contractors. So hiring illegal workers could result in additional costs of £2000, over and above potential fines of £20,000 per illegal worker imposed by the Home Office.
Gender Pay reports – April 2018
Organisations with at least 250 employees are required to publish information about the differences in pay between men and women in their workforce. The deadline for the private and voluntary sector for the very first gender pay reports is the 4th April 2018 – these reports will be based on the ‘snapshot’ date of the 5th April 2017. Larger public sector employers have until the 30th March 2018 to publish their first reports.
For a full HR Blast on this see: Gender Pay Gap Reporting: What You Need To Do
No doubt both unions and staff will be very keen to review these pay reports once they start to get published so are you ready for that? Your staff representatives too may be keen to share their views. Can you cope with an internal backlash from those who feel they have been undervalued or discriminated against? Before publishing, you may need to think about diversity and inclusion programmes, often male and female managers too simply have no idea how pay inequalities come about as by and large decisions on pay that adversely affect women are not directly discrimation
Perhaps you would benefit from implementing some unconscious bias training that looks at this very issue? It’s not about blame and looking backwards, but it’s got to be about learning and awareness raising, so that in future you have greater equality and inclusion irrespective of gender.
Please do get in touch for unconscious bias training or support with diversity and inclusion training. Just opening a few eyes about how inequalities come about could make all the difference.
Annual increases to statutory pay rates – April 2018
Although as yet unannounced, we will of course have the annual increases for National Minimum Wages, Statutory Sick Pay, statutory Maternity Pay/Adoption, Paternity/Shared Parental Pay and so on.
Whilst we thought we had just about got to grips with auto-enrolment, the Government have recently announced they are considering reducing the age individuals become eligible for auto-enrolment from 22 to 18, this proposal is still in early stages – but one to look out for in the future!
General Data Protection Regulations (GDPR)
The GDPR will apply to all member states from 25th May 2018 and although we are leaving the EU, the Government has confirmed it will still apply to the UK. The regulations will introduce a single set of data protection rules across the EU and mean that we have one supervisory authority (rather than the current 28) and we will no longer have to register with the ICO each year.
The General Data Protection introduces new rules which will;
- Give individuals easier access to their data
- Introduce a ‘right to be forgotten’
- A right to know when their data has been hacked
- Introduce fines of up to 4% of global turnover for breaching the new rules
Whilst there is an impact on marketing, sales etc there is a huge impact on HR so please don’t wait until the last minute to get clued up on this. Please do call us if you would like training/workshops on HR issues for your line managers or HR team.
For a GDPR policy or audit/checklist please see our HR Docs Wizard www.docswizard.co.uk . If you subscribe for just £149 per year you can get access to 100’s of HR docs including a variety of GDPR docs that will help you more easily manage this complex piece of new legislation.
For a fuller HR Blast on this topic please see: HR & the GDPR (General Data Protection Regulation)
The Government had committed to introducing Grandparents leave and pay in 2018, although the Government still has not issued any consultation on the subject.
We presume they are thinking you haven’t already got enough on your plate to manage in 2018!
What have we missed?
If you would like us to write on a particular HR topic please do email us or give us a call. If there is a topic you want further information on again, let us know as no doubt other Blast readers will be wanting more information as well.
Don’t just say you like us!
Why not make 2018 the year you start to use us?
At Jaluch we can support with HR and training across 2018 in 4 different ways:
Template HR and H&S documents: www.docswizard.co.uk – from just £49 + VAT for a year’s subscription and just under £298 + VAT if you buy access to the entire service.
Training kits on key topics so you can save money by rolling out essential training courses yourselves without the hassle of developing all your own materials: https://www.jaluch.co.uk/training/training-store/ Train the trainer also available as an option with these training kits. From just £300 for 6+ hours of materials on topics including managing discipline, managing grievances, managing absence, recruitment, coaching skills for managers, managing change etc.
Training and one to one Coaching – Diversity and inclusion programmes, unconscious bias workshops, essential employment law, managing discipline and dismissals, staff representative training. link to page
HR Advice and support – redundancy consultation and support, TUPE, change management, day to day staffing issues and challenges, conducting investigations, chairing disciplinaries, Tribunal responses etc.
Jaluch is long established and widely respected working with both corporates and large private sector to the smallest of organisations. We pride ourselves on the service we deliver and our value driven culture. www.jaluch.co.uk
The information contained within this article is for general guidance only and represents our understanding of employment and associated law and employee relations issues as at the date of publication. Jaluch Limited, or any of its directors or employees, cannot be held responsible for any action or inaction taken in reliance upon the contents. Specific advice should be sought on all individual matters.