Employment Law – What to expect in 2016

A number of key employment law changes are expected in 2016.

Zero Hours Contracts

From 11 January 2016, zero hours employees now have a remedy against employers who include exclusivity clauses in their contracts of employment. The Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015 give zero hours employees the right not to be unfairly dismissed and zero hours employees and workers the right not to be subjected to a detriment for failing to comply with an exclusivity clause.

Trade Union Bill

This was initially published on 15th July 2015 and subject to various consultations which closed on 9th September 2015. The Bill includes changes to the balloting rules for industrial action and measures on picketing, facility time, political donations and additional powers for the Certification Officer.

The Trade Union Bill had its second reading on 11 January 2016 and has been subject to much controversy with the Scottish government requesting that Scotland is entirely excluded from the Bill and the Welsh unions and councils expressing their strong opposition to the bill.

The National Living Wage

The government has published the National Minimum Wage (Amendment) Regulations 2016. This is due to introduce the National Living Wage at £7.20 an hour for workers aged 25 and over on 1 April 2016. National Living Wage rates will be debated in both Houses of Parliament prior to it coming into force. The financial penalty payable by employers who underpay the NMW will also increase from 100% to 200% of the underpayment due to each worker.  

Penalties for Employers who fail to pay tribunal or settlement awards from April 2016

This will allow financial penalties to be imposed on employers who fail to pay an employment tribunal or settlement award (COT3). This will feature a new scheme including a penalty to the Secretary of State  by a specified date (which is no less than 28 days from the date of the notice). The penalty will be 50% of the unpaid relevant sum, subject to a minimum of £100 and a maximum of £5,000. Penalties will ultimately be paid into the Consolidated Fund. The government’s aim is to use the financial penalty regime to deter non-payment of tribunal awards and create a level playing field for compliant businesses.

Gender pay gap reporting

The government has the power to make regulations in 2016 to bring into force gender pay gap reporting requiring private sector employees with 250 or more employees to report gender pay gap information. The government consulted on mandatory gender pay gap reporting from 4 July 2015 to 6 September 2015 and announced in early November 2015 that gender pay gap reporting will include bonuses. The provisional deadline for the introduction of gender pay gap reporting regulations is 26 March 2016.

Taxation of termination payments

In 2015, the government consulted on changes to taxation of termination payments. The response to the consultation is expected this year.

Financial service

Significant changes are due to occur in the financial services sector with the introduction of the Senior Managers Regime and the Certification Regime on 7 March 2016. These entail new rules in relation to the provision of regulatory references. Changes are also being introduced by the Prudential Regulation Authority  and the Financial Conduct Authority in relation to whistleblowing, including the requirement to appoint a whistleblowers’ champion. The new rules require that wording in employment and settlement agreements must not deter staff from whistleblowing.

Key cases:

• TUPE

The case of BT Managed Services Ltd v Edwards  is scheduled to be heard in the Court of Appeal on 14 June 2016 and deals with the issue of whether an employee permanently on sick leave is “assigned to an organised grouping of employees” for the purposes of a TUPE transfer.

• Collective redundancy consultation: USDAW v Ethel Austin Ltd (the “Woolworths case”)

This case deals with whether the duty to collectively consult applies only where 20 or more dismissals are proposed “at one establishment” (i.e. workplace) or whether redundancies made throughout the business should be counted.

This case will return to the Court of Appeal to determine whether, on the facts, each branch of Woolworths and Ethel Austin was a separate establishment for the purposes of Trade Union & Labour Relations (Consolidation) Act 1992.

• Collective redundancy consultation: United States of America v Nolan

This case deals with the issue of whether an employer’s obligation to collectively consult arises, when an employer is proposing to make a strategic business or operational decision that will foreseeably lead to collective redundancies, or only once the employer has made that strategic decision and is proposing consequential redundancies. The case is awaiting a hearing in the Court of Appeal.

• Holiday Pay

The EAT heard the appeal in Lock v British Gas Trading Ltd in December 2015 and judgment is awaited. This case deals with whether holiday pay should include sales-related commission (in respect of the minimum four weeks’ statutory annual leave required by the Working Time Directive (WTD)).

• Whistleblowing

This year, the Court of Appeal will hear the appeal in Chesterton Global Ltd v Nurmohamed. This case deals with the meaning of the public interest, in order to exclude complaints about breaches of a worker’s own contract of employment from whistleblower protection. This case is scheduled to float in the Court of Appeal on 11 or 12 October 2016.

Also watch out for:

Tribunal fees

Further consideration of tribunal fees is expected in 2016. Permission to appeal to the Supreme Court has been sought in R (Unison) v Lord Chancellor. In the meantime, the outcomes of the government review of employment tribunal fees and the Justice Committee inquiry into tribunal fees are awaited.

For more information on this or any other Employment law matter, please contact Philomena Price, Employment Partner at Spratt Endicott Solicitors on 01295 204147, or email pprice@se-solicitors.co.uk.

*Disclaimer: While everything has been done to ensure the accuracy of the contents of this article, it is a general guide only. It is not comprehensive and does not constitute legal advice. Specific legal advice should be sought in relation to the particular facts of a given situation.*