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:

Tips and troncs – under review

It has recently been announced that the Government is to consult on a proposal to ban deductions from employees’ tips. It has long been accepted that employers are within their rights to make the deductions despite the apparent unfairness. However, not surprisingly, and following the exposure of deductions made from some of Britain’s best known restaurant chains the Government has following an 8 month review, decided to consult as to whether deductions from staff tips should be scrapped.

The deductions are taken in the name of an “admin fee” and mean that staff do not get the full percentage of the tips that were intended for them. Unite officer Dave Turnbull said:
We are pleased that the government has woken up to this scandal, but we would ask that they think carefully about an effective solution. Capping admin fees will simply legitimise the underhand practice of restaurants taking a slice of staff tips and be near enough impossible to enforce.

When customers eat at the likes of Pizza Express, they give tips in the expectation that all of it will go to staff and not be pocketed by management.
The Government’s consultation, which will run until 27 June, sets out options for meeting three broad objectives: making it clear that tips and service charges are voluntary; making it clear where these payments go; and ensuring workers get a fair share of the money raised.

The Government said that while unions and other employee groups had asked for a requirement for 100 per cent of tips to be paid to workers, and the majority of customers would prefer to see this, employers were “more supportive of retaining the current treatment of discretionary payments for service; maintaining their flexibility to reward workers but increasing the transparency of actions”.

Prior to 2009 restaurants were allowed to take tips and gratuities into consideration to effectively make up national minimum wage. However, from October 2009 such deductions were prohibited which meant that all eligible workers must receive at least national minimum wage in base pay with any tips paid on top. With that has brought a great deal of confusion as to what this meant.