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With the anticipated triggering of Article 50 of the Treaty of the European Union (TEU) heralding the beginning of Brexit, the likely appeal of the Uber judgment relating to employment status in the gig economy, the introduction of the apprenticeship levy and potential overhaul of corporate governance amongst other developments set to kick-off this year, 2017 is set to be a notable one for employers!

Gender Pay Gap and Equal Pay

With the final version of the Gender Pay Gap Reporting Regulations published in December 2016, obligations on private sector employers with over 250 employees will begin on 6 April 2017 when the Regulations come into force. Although the first report is not due until April 2018, employers will be required to record information relating to their employees’ pay from 5 April 2017, as well as any bonuses paid in the 12 months prior to this date. For more information on gender pay gap reporting see our blog: ‘Gender Pay Gap reporting: The Final Cut’.

In the last quarter of 2016 we saw employees of the supermarket Asda succeed in the employment tribunal which decided that 7000 female employees in Asda stores can compare themselves to higher earning male employees working in warehouses. Although only a small step for the employees concerned as another employment tribunal will decide whether the jobs are of equal value so as to merit equal pay the progress of the litigation will be keenly followed by large employers and may signal the emergence of significant equal pay exposure within the private sector.

Apprenticeship Levy

By 6 April 2017 employers in both the public and private sectors will be obliged to put 0.5% of their annual wage bill towards apprenticeship training. However, this only applies to employers whose annual wage bills are £3m and above, and employers are afforded an annual allowance of £15,000. Following the decision to leave the EU, the levy will bring important funding for training and developing skills; however, with the uncertainty surrounding Brexit, the levy will not necessarily be welcomed by all employers. For more detail on the new levy see our previous blog: ‘UK Apprenticeship Levy Proves Taxing for Scottish Government’.

Brexit

With a large portion of UK employment rights stemming from the EU, the uncertainty surrounding Brexit looms over us. The Government plans to trigger Article 50 of the TEU by March 2017 but we eagerly anticipate the decision of the Supreme Court on whether Parliamentary approval is first required. What Brexit means for employment law and employment rights is not yet clear. The EU has taken a strong line that the UK will not be permitted to remain within the Single Market whilst being allowed to take depart from the principle of free movement of EU citizens. On the other hand, a “hard Brexit” could result in full control over immigration and sweeping changes in this area of law. In the employment field, however, the indications to date are that the Government will not embark on full de-regulation of employment law or reduce workers’ rights.

‘Gig Economy’ and Employment Status

Following the landmark decision of a London Employment Tribunal that Uber drivers in a test case were workers for the purposes of the Employment Rights Act 1996, we keenly await the anticipated appeal to the Employment Appeal Tribunal.  The outcome of the Uber appeal will likely have major implications for the future development of the ‘gig economy’. A similar decision has just been reached in the case of Dewhurst v City Sprint (UK) whereby the London Central Tribunal determined that a cycle courier was a worker and therefore entitled to holiday pay. For further information on the Employment Tribunal’s decision in the Uber case see our blog; ‘Is it over for the Gig Economy? Uber Drivers gain workers’ rights’

The Business, Energy and Industrial Strategy Committee started its inquiry into the ‘Future World of Work and Rights of Workers’ in October 2016. The inquiry, amongst other things, sets out to answer questions surrounding the ever-expanding ‘gig economy’ and the accompanying rights of on-demand workers and agency workers. We anticipate that the findings of the inquiry will be published this year. 

Employment Tribunal Fees

With the introduction of employment tribunal fees in July 2013 - and the significant decrease in the number of cases being raised in the employment tribunal since - we await the outcome of the Supreme Court judgment in R (UNISON) v Lord Chancellor in March. Unison began its challenge to employment tribunal fees in 2014 claiming breach of the EU right to an effective remedy, indirect discrimination and breach of the public sector equality duty.

With the devolution of employment tribunal administration we also await reform of the Scottish tribunal system and the potential abolition of tribunal fees this year.

Grandparental Leave

There are plans by the Government to expand Shared Parental Leave to working grandparents, recognising the role they play in helping out with childcare. With the initial consultation delayed by the EU Referendum we hope to hear more on this topic in 2017 with the legislation likely  to come into force in 2018. 

Corporate Governance Reform

Following the stark statistics of “Fat Cat Wednesday” illustrating the significant pay gap between workers and CEOs, the Prime Minister is proposing to improve accountability on executive pay and increase pay transparency. The recent Green Paper on reforming corporate governance is available for responses until 17 February 2017. For further information on the proposals see our recent blog; ‘Forget Fat Friday, what about Fat Cat Wednesday’.

Data Protection

The EU General Data Protection Regulation (GDPR) will apply to all members of the European Union from 25 May 2018. Although the Prime Minister’s intention is to trigger Article 50 and exit the Union, the Secretary of State has confirmed the UK’s intention to implement the GDPR prior to Brexit. The Regulations will replace the current data protection legislation in the UK under the Data Protection Act 1998. Employers should take steps in 2017 to familiarise themselves with their new duties and obligations. In particular the consequences for breach of the Regulations will significantly increase with a maximum fine of 4% of the company’s worldwide annual turnover or €20m (whichever is higher).

National Minimum Wage/National Living Wage

The date for increasing the national minimum wage and national living wage will now coincide on the 1 April 2017. Employers should be mindful of the increase in the national living wage and national minimum wage and update their payroll accordingly. The increases are set out below:

 
 
   Apprentice      Under 18      18 to 20      21 to 24      25 and Over   
Current Rate      £3.40  £4.00  £5.55  £6.95  £7.20
April 2017  £3.50  £4.05  £5.60  £7.05  £7.50
 
 
 
 
 

 

For an explanation of the national minimum wage and national living wage, see our blog ‘The Living Wage- the National Minimum Wage, Confused?’

We will keep you updated with developments as they emerge. For further information on any of the areas discussed please contact a member of our Stronachs’ Employment Team.

Chambers UK 2018

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