Work It: Employment Update - March 2017
In this month's round-up of key employment and HR developments, we look at:
In this month's round-up of key employment and HR developments, we look at:
With the gender pay gap reporting regulations due to come into force in April this year, we now have the draft guidance which accompanies the Regulations.This is available on the ACAS website.
Please note that a number of the worked examples of calculations contain errors, which will hopefully be corrected before the guidance is finalised.
The guidance provides helpful clarification in a number of areas, including:
Employee and worker status continues to be a hot topic for 2017. The latest development is that Gary Smith, a self-employed plumber working for Pimlico Plumbers, has succeeded in establishing that he was a "worker" and thus entitled to paid annual leave, among other rights. His claim succeeded despite his contract describing him as an independent contractor, and despite him being registered for VAT, submitting invoices to Pimlico Plumbers as a contractor and filing tax returns on the basis that he was self-employed.
The case was considered by the Court of Appeal, which agreed with the Employment Tribunal that Mr Smith was a worker.
There were two key issues:
On the first point, although he was in practice allowed to swap shifts with other plumbers, this was still regarded as consistent with the overall requirement under the contract that Mr Smith provide his services personally.
On the second point, the court held that the degree of control exercised by Pimlico Plumbers over the plumber was consistent with him being a worker rather than genuinely self-employed. Key factors included the requirement to wear a uniform and drive a branded van, the requirement for him to be available for a minimum of 40 hours per week for work and restrictive covenants which prevented him from working as a plumber in Greater London for three months after termination of the contract.
As with all decisions in this area, this case is fact-sensitive.There is very little in the decision which is new or surprising.However, it highlights the fact that self-employed staff are increasingly willing to challenge their status in the Employment Tribunals and the courts can and do look behind the written contractual documentation to establish how the relationship actually operates.
The Data Protection Act allows individuals to request details and copies of the personal data which a data controller (such as an employer) holds about them (called a subject access request).This is very often used as a tactic in employment disputes in order to secure copies of relevant documentation long before an employer would be required to disclose those documents in Employment Tribunal litigation.
Employers faced with the prospect of a time-consuming search for personal data (which may involve combing through thousands of emails) sometimes refuse to respond to the request on the basis that the request is an attempt to obtain early disclosure and not related to the purposes of the Data Protection Act, which is concerned with privacy and the accuracy of personal data.
However, a recent Court of Appeal decision indicates that refusing to respond to a request on this basis could lead to a successful legal challenge.
The key issues in the case were:
Employers faced with data subject access requests should consider carefully whether documents requested genuinely contain personal data, the scope of the search required and whether any exemptions apply. Where appropriate, legal advice should be sought so that legal privilege will apply to discussions about how to respond to the request.
National Minimum Wage: The timing of National Minimum Wage and National Living Wage increases is being consolidated so that they will now happen at the same time (April each year). The new rates from April 2017 will be:
Regulatory references: New FCA and PRA rules relating to regulatory references, which form part of the senior managers regime and senior insurance managers regime, came into force on 7 March 2017. The rules aim to ensure that individuals who have committed misconduct or regulatory breaches cannot move between firms without their new employer being aware of their history.
Holiday pay: The Supreme Court has refused permission to appeal in the long-running case Lock v British Gas, meaning that the Court of Appeal judgment (which confirmed that commission does need to be factored into holiday pay) remains in place.
Apprenticeship Levy: This comes into force on 6 April 2017. For more information, see our detailed guidance note.
Self-employment - NIC changes: The Government in its Spring Budget announced (controversial) increases to national insurance contributions for self-employed individuals. However, a subsequent announcement indicates that the changes will not take effect until this Autumn, after the Taylor review on modern employment practices has concluded.
Pregnancy and maternity discrimination: The Women and Equalities Office published a report last August calling for stronger legal protection in relation to pregnancy and maternity, including an extension of maternity rights to workers, a longer limitation period for bringing claims, a reduction in ET fees and protection against being made redundant for six months after returning from maternity leave. The Government has now responded to the report. Overall, it rejected the report's recommendations, but it is reviewing whether employees returning from maternity leave, paternity leave and shared parental leave should receive enhanced protection against redundancy, in addition to the current protections for employees on maternity leave.
Public sector exit payments: The power to make regulations capping termination payments for public sector employees at £95,000 (including notice pay) has been brought into force.
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