Would reforming the Working Time regulations be a good idea?

Brexit. Brexit. Brexit. Whilst Christmas and New Year provided a welcome rest from Brexit-dominated headlines, there is no doubt that the media train will start in earnest sooner rather than later.

Just before Christmas, various newspapers reported that the Working Time Regulations could be a target for the Government following the UK’s departure from the EU. Certain newspapers went further and stated that repealing or substantially amending the Working Time Regulations would be a positive example of removing so-called ‘red tape’ and freeing businesses from the burden of overbearing regulations; some newspapers even trotted out the over-used line of ‘taking back control’.

So, to use that awful phrase, should the UK ‘take back control’ and amend the Working Time Regulations?

Equality Act 2010 (Gender Pay Gap Information) Regulations 2017

On 6th December 2016, the Government published the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017, which will require large private sector businesses to publish gender-based pay statistics each year.

These Regulations are likely to come into force (subject to parliamentary approval) on 6th April 2017, and will essentially require employers with 250 or more employees (within the private and voluntary sectors) to publish gender pay information on their company website on 5th April 2018 and thereafter on an annual basis. The information must remain on the website for not less than three years and they must also submit this information to the Government each year (a Government website will be created where the information will have to be published, however details concerning the Government website will likely be released nearer 5th April 2017.)

The above has raised a number of questions from employers such as which individuals need to be taken into account for these purposes, and, exactly what information do they need to provide?

Firstly, in terms of the personnel be taken into account, the Regulations state that such individuals must be undertaking work for the business in a personal capacity, therefore consultants as well as employees, must be accounted for.

Secondly, with regards exactly what information must be provided, the following guidelines are given:

the difference in mean pay between male and female employees
the difference in median pay between male and female employees
the difference in mean bonus pay between male and female employees
the difference in median bonus pay between male and female employees
the proportions of male and female employees who were paid bonus pay
the proportions of male and female employees in each quartile of their pay distribution

The information must be collated from data taken on 5th April every year, starting with 5th April 2017. The bonus information should be based on the preceding 12-month period, beginning with the 12 months leading up to 5th April 2017.

What happens if my business does not comply?

What are the likely implications of Brexit on UK Employment Law/HR practices?

Employers may not be aware that much of the current legislation in place to protect employee rights actually derives from the European Union – for example, working time regulations, rights of the employees on a business transfer (TUPE) and family leave rights to name but a few. Indeed some Politicians for the ‘Leave Campaign’ will no doubt have argued that such laws were inhibitive to British businesses and produced too many rules and regulations having a negative effect on both time and profits.

What is likely to happen?

In reality it is doubtful that the UK Government would look to repeal any employment law which implements minimum EU requirements, the reason being that many of these laws simply complement existing UK law (equal pay rights for example). In addition, much of our existing employment law simply reflects good/acceptable practice in business (or indeed life generally!) such as the right not to be discriminated against on the grounds of sex, age, disability etc. Furthermore some UK Laws actually go above and beyond the minimum requirements of EU legislation – in respect of holidays for example, the EU Working Time Directive 2003/88/EC only requires EU Member States to provide for a minimum of 20 days’ annual leave for employees, whilst the UK statutory minimum leave entitlement is actually 28 days inclusive of normal bank and public holidays.

As a final point it is worth noting that despite a (potential) Brexit, the UK will still need to maintain strong trading relations with Europe. If the UK is a member of the EEA (European Economic Area) it would be required to remain subject to many aspects of EU employment law.

In light of the above, whilst in my view the majority of employment law legislation will not be repealed or significantly changed, the UK Government may look to alter some employment law that UK businesses have struggled with. The following are areas that may be most susceptible to change:

Initial reaction to the introduction of the national living wage

Further to my previous blog post about the introduction of the national living wage (NLW), I was interested to read that not all of us think the effective increase to the national minimum wage will have a positive impact on the UK or its employees.

You will by now probably be aware that larger businesses such as Kingfisher (owners of the likes of B&Q and Screwfix) immediately put provisions in place to ensure that the introduction of the NLW had a minimal impact on their finances. Kingfisher, for example, advised all employees that although they will increase the hourly rate of pay to £7.66 across the board (regardless of age), they will remove benefits such as time and a half/double time for working on Sundays/bank holidays and the increased pay previously received by staff working in London. In addition they have cut summer and winter bonuses and advised employees that should they not agree to these changes and sign a new contract of employment, “unfortunately this will result in your dismissal”.

Workers have understandably reacted angrily to the changes and created a storm on social media by setting up a Facebook campaign and petition entitled “Don’t use living wage as an excuse to cut pay and benefits”.  Rumour has it that the campaign was set up by a B&Q Manager under the pseudonym of Kevin Smith, who wrote:

Those who have worked within the business for over a decade and know our customers and our business the best are losing thousands of pounds a year. Big businesses like B&Q are using the national living wage as an excuse to cut overall pay and rewards for the people that need it the most.

I hope that with the support of others, through signing this petition, we can influence B&Q and other businesses to reverse these changes. I also hope they acknowledge that treating people in this way will have a negative impact on their business in the future.

Currently (as of 5th April 2016) the petition has 134,074 supporters.

A Guide to the National Living Wage

If you have had the opportunity to read my previous blog post ‘Key Employment Law Changes’, you will be aware that from 1st April 2016, all employers are under a duty to comply with new obligations under the ‘National Living Wage’ regulations.

It is important that small business owners in particular are aware of the implications of this, to ensure that they implement any necessary pay increases and are not subject to later claims for arrears of wages owed.

By way of background, the National Living Wage was originally calculated based on the amount that employees would have to earn in order to cover basic living costs – prior to this month however, this was used as a benchmark/guidance only, and the rates were not legally enforceable.

From 1 April 2016, the National Living Wage became law under the National Minimum Wage (Amendment) Regulations 2016 for workers aged 25 and over, increasing the minimum wage by £0.50 to £7.20 per hour – the effect is therefore essentially that the National Minimum Wage rate is increased.

Please note – the National Minimum Wage rates will continue to apply for workers aged under 25.

If you are a business owner, you should therefore make arrangements to assess who within your organisation will be entitled to this increase, notify them accordingly and advise your accounts/payroll team to implement the rise.

Briggs Report on the future of Courts and Tribunals

On 12 January Lord Justice Briggs published his interim report concerning the structure and operation of the civil courts. The full review is expected to be completed by the end of July 2016.

Mr Justice Briggs has identified a “clear and pressing need to create an Online Court”. This is intended to deal with claims with a value of up to £25,000. With the charming but concerning naivety of many senior judges Mr Justice Briggs suggests that this will “for the first time…give litigants effective access to justice without having to incur the disproportionate cost of using lawyers”. It is worth bearing in mind that as long ago as the 1950s the Tribunals Service was set up with the same objective – a straightforward process for the disposal of cases with the minimum of fuss and no need for lawyers. Well, as we all know, some of the most technical legal arguments and most appealed cases are those heard in and emanating from the employment tribunals.

Mr Justice Briggs identifies three stages in the process. Stage 1 is “a largely automated, inter-active (note the hyphen – nothing too modern here) online process for the identification of the issues and the provision of documentary evidence”. Stage 2 is conciliation and case management, by case officers. Stage 3 is to be resolution by judges. He envisages the court using “documents on screen, telephone, video or face to face meetings to meet the needs of each case”. I am bound to say “good luck with that” in a lawyer free environment and with the Courts’ abysmal record in installing and managing IT.

He also envisages that many functions currently undertaken by judges will be dealt with by “case officers supervised by judges”. We have seen similar changes in the tribunals and as long as there are sensible limits placed of the powers of the case workers this would in my view be a welcome development.

However, by far the most interesting proposal for readers of this blog is the suggestion that the Employment Tribunals and Employment Appeal Tribunals might be integrated into the structure of the civil courts.

Regular readers of the blog will know that I have for very many years advocated the merging of tribunals with the civil courts. There are obvious savings to be made in terms of overheads, particularly properties and staff. Perhaps some of the county courts currently earmarked for closure could be saved by taking on what are currently tribunal claims in addition to their current caseloads. There would be a great deal to be said for having common procedural rules instead of similar but occasionally significantly different rules applied in different forums. Merging the courts and tribunals would also remove the anomaly that certain claims can only be brought in employment tribunals whereas others (e.g. contract claims) can be brought in the county courts, with the obvious risk of duplication and additional costs.

coming in 2015

In late October I wrote about what is probably the most significant change coming in 2015, the introduction of shared parental leave. As I pointed out at the time, although the changes apply to babies due or due to be adopted on or after 5 April, requests for leave could come as soon as next month so arrangements need to be in place now.

Due in May 2015 is the introduction of the Fit for Work service following pilot runs which were supposed to have started already but seem to be awaiting implementation. Under a partnership agreement 45 NHS occupational health teams covering 103 sites will provide face to face appointments for the new service. This is in addition to the telephone helpline and website that were initially announced. When I wrote about the service last August I gave it a qualified welcome. However, doubts have emerged about its likely effectiveness. Guidance for employers is yet to be published and it is entirely voluntary, on the part of both employers and employees. If an employee refuses to take part, that is the end of the process. Even if a report is prepared the employee can refuse consent for its disclosure to the employer. It is down to GPs to decide whether to refer employees for assessment. According to recent research the proportion of likely referrals of eligible patients varied widely from 11% to 72%.

As usual statutory rates will increase on 5 April 2015 with statutory maternity, adoption and shared parental leave rates increasing to £139.56 per week and SSP to £88.45 per week.

Also on 5 April the right to unpaid parental leave will be extended to parents of any child under the age of 18 years.

Cases to watch out for include the decision of the European Court in USDAW v Ethel Austin Ltd and others concerning whether the 20 employees’ threshold for collective consultation applies to one “establishment” or a whole organisation (likely to be the latter).

half of employment tribunal awards are not paid

Research in Scotland has revealed that nearly half of employment tribunal awards are not paid, while a further 13% of successful claimants receive only part of their award. This follows research carried out across the UK last year which showed that only 49% of successful claimants received payment in full, 16% received part payments with 36% receiving nothing at all. It seems that the situation in Scotland is worse because the methods available for enforcement of tribunal awards are unwieldy and not widely known.

According to a report in the Scottish Herald examples include a Sikh garage worker, Paramjit Singh, who was racially abused by his Muslim bosses. They called him a “lazy low-caste Sikh” and, with reference to his white British wife questioned how he “could stay with a white woman. They’re not clean and they don’t know how to live”. He was also forced to carry out demeaning work repeatedly. He was awarded over £18,000 but has recovered nothing. In August 2014 the Respondent, P K Imperial Retail Limited, made an application to Companies House to be struck off and a director resigned. The reality is that the prospects of Mr Singh recovering anything are negligible.

Recently, the Government decided against tightening the existing regime concerning the liquidation and/or administration of companies and the formation of new companies which often carry on the same business with the same owners from the same premises, but without any of the former liabilities, including tribunal awards. The rationale for this is that the “enterprise culture” should not be suppressed so that people who have lost their businesses through no fault of their own should not be deterred from starting over. I think that many would say that not paying tribunal awards is an unlikely indicator of a no-fault business failure.

In response the UK government has suggested giving powers to employment judges to require businesses deemed to be possible non-payers to be required to pay a deposit. Deeming a business a possible non-payer is a big call for an employment judge to make and one that is likely to prompt at least indignation from the business owners. What evidence would be relied on and what tests would be applied?

employment law’s brave new world

This summer has seen some radical changes in the field of employment law, notably the introduction of fees in employment tribunals on 29 July, alongside new Employment Tribunal forms and rules, a new cap on unfair dismissal compensation and the new “shareholder-employee” provisions came into force on 1 September.
Time will tell how these changes will affect practice in the long term, but in the short term and perhaps unsurprisingly, there are reports of a number of teething problems – for example:

– A backlog of cases waiting to be processed, likely to be related to a surge of claims going in before 29 July (where the effective cut-off was actually the Friday before the Monday implementation date).
– Problems with the new forms (once it was possible to track them down) – whereas previously it was possible to save partly completed forms, practitioners have been having trouble with these.
– Glitches with online submission of responses, where only part of the employer’s response could be submitted – with all but 25 lines of their defence being cut off.
– At the same time, the old forms have remained valid, as no action had been taken to “unprescribe” them – just as well, given the problems experienced.
– Whereas previously, claims could be submitted online, in person, by fax, or email the latter two options are no longer available to make claims (although it seems emailed ET3 forms will be accepted).

Feedback has mainly come from organisations acting primarily for employers, so we don’t know how claimants are getting on with the need to pay a fee or apply for fee remission when submitting a claim, but some thought has been needed on matters of detail, such as whether a claim will be in time if submitted close to a time limit with a fee cheque which subsequently bounces (yes, it’s in time, but a Notice to Pay will be issued), and what will happen if the wrong fee is tendered (the same, so long as it matches a recognisable fee amount e.g. £160 or £250). I’ve also commented in an earlier post about the problems with fee remissions generally.

Enterprise & Regulatory Reform Act becomes law – dotted with various employment law reforms

On 25 April 2013, the Enterprise & Regulatory Reform Act became law, on receiving Royal Assent.
It is an enormous Act and, quite frankly, a thorough hotch-potch. There are Parts covering the UK Green Investment Bank, abolition of the Competition Commission, laws concerning cartels, the appointment of bankruptcy adjudicators, copyright law and rules concerning estate agents. Part 2 (covering sections 7 to 24) is entitled Employment and it brings into law a number of provisions which have been covered by blog posts over the last few months. Where known I have included the relevant commencement dates. Key among them are:

ACAS and conciliation
There is a requirement for the reference of claims to ACAS before implementation, to attempt conciliation, along with extended limitation periods to enable this to happen (sections 7-10 & Sched 2): to those who remember the 2004 dispute resolution procedures, does this idea sound worryingly familiar? In a climate of cutting red tape this looks very much like adding some.
Employment Tribunals
There are changes to the potential make up of both Employment Tribunals and the Employment Appeal Tribunal – the latter to allow more appeals to be heard by a judge sitting alone (sections 11 and 12). As far as Employment Tribunals are concerned “legal officers” will be able to make legal decisions, including those determining proceedings, in place of an employment judge. There can be no doubt that this is nothing more than a cost cutting measure and has little if anything to do with the proper administration of justice.
Qualifying periods (effective 25 June 2013)
Section 13 deals with the removal of any qualifying period for a complaint of unfair dismissal based on political opinion (thus implementing European Court of Human Rights requirements identified in Redfearn v UK).