A Guide to Future Employment Law. Date Topic Practical Impact

Transcription

1 In the Pipeline A Guide to Future Employment Law March 2014 Date Topic Practical Impact October 2012 to April 2017 Pensions All employers will be required to enrol their UK workers automatically into an occupational or personal pension scheme. This is being phased in, having started with the largest employers (ie those with at least 120,000 workers on the payroll) in October 2012 and affecting all employers by the end of a "staging" period ending in April Workers can opt out of membership once enrolled, but may not be incentivised to do so. For workers aged at least 22 with earnings over the personal income tax allowance (currently 9,440 per annum) employers will have to: contribute at least 3% of their gross earnings between 5,668 and 41,450 (figures subject to change every April) - these compulsory contributions are being phased in, currently at 1% and increasing to 2% in 2017 and 3% in 2018; or offer a suitable defined benefit scheme; or make alternative contribution arrangements satisfying certain minimum requirements. Employers can delay enrolment of new workers until they have been employed for three months, although the worker can choose to opt in earlier. 1 October 2013 Executive Remuneration The Government has introduced a number of changes in relation to executive remuneration in quoted companies (for a UK company this means a company whose shares are traded on the main market of the London Stock Exchange). The key changes include: a binding shareholder vote on future remuneration policy (including the company's approach to exit payments) at least every three years; an annual implementation report, disclosing how the policy has been implemented and including a single remuneration figure for each director; the implementation report must contain details of termination payments to directors with an explanation of how each payment was calculated; shareholders have an advisory vote on the implementation report; there is a new requirement for companies to publish details of any termination payment to a director on the company's website, at the time the payment is made. The changes apply to financial years beginning on or after 1 October 2013, so the first annual reports under the new regime will be published in autumn 2014.

2 January and May 2014 TUPE The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) have been amended. The main changes are: allowing redundancies due to relocation to be fair under TUPE; allowing the transferee to consult with the transferring employees before the transfer about future redundancies; altering the deadline for providing employee liability information from 14 to 28 days before the transfer. The Government had originally proposed to abolish the "service provision change" provisions of TUPE, but decided not to do so. The revised TUPE Regulations apply to transfers which take place on or after 31 January 2014, with the exception of the new deadline for employee liability information which will only apply to transfers which take place on or after 1 May March 2014 National Minimum Wage The maximum penalty for employers who fail to pay the National Minimum Wage increased from 5,000 to 20,000 (the penalty is payable to the Government and is payable in addition to the arrears of wages due to employees). 6 April 2014 Unfair Dismissal/ Statutory Redundancy Pay The annual increase in Employment Tribunal limits, which used to occur in February, will now take place in April each year. For dismissals occurring on or after 6 April 2014, the maximum compensatory award for unfair dismissal will be the lower of 76,574 and a year's pay (currently the maximum award is the lower of 74,200 and a year's pay). The maximum amount of a week's pay, for calculating the unfair dismissal basic award and statutory redundancy pay, will increase from 450 to April 2014 Statutory Maternity/Paternity/ Adoption Pay The weekly rate of statutory maternity, paternity and adoption pay will increase from to April 2014 Statutory Sick Pay The weekly rate of statutory sick pay will increase from to The current requirement for employers to keep records of all employee illnesses of four or more days (even where they are non-working days) will be abolished. Employees will only be required to maintain records sufficient to show that statutory sick pay has been paid. Currently, employers who pay statutory sick pay exceeding 13% of their class 1 National Insurance contributions are able to reclaim the excess from HM Revenue & Customs. This repayment scheme is to be abolished and the savings will be used to help fund the new Health and Work Service (see Sickness Absence below).

3 6 April 2014 Discrimination The statutory discrimination questionnaire procedure will be abolished. This procedure allows employees who believe that they may have been discriminated against to submit a formal questionnaire to their employer before they bring a tribunal claim (or within three weeks after bringing a Tribunal claim). If the employer fails to respond, the Tribunal may draw an adverse inference from this failure. Despite the abolition of this formal procedure, individuals will still be entitled to write to their employer with questions about the way in which they were treated (and diversity compliance more generally), before deciding whether or not to bring a discrimination claim. Employers who fail to respond to these questions (without good reason) could find it more difficult to defend any subsequent discrimination claim. Acas has published guidance for employers on dealing with questions regarding discrimination in the workplace. 6 April 2014 Employment Tribunal Financial Penalties Employment Tribunals will be given a discretionary power to impose financial penalties on employers who lose a Tribunal claim. The penalty will be set at half of the total compensation award made by the Tribunal, subject to a minimum of 100 and a maximum of 5,000. This is in addition to the payment to the claimant. The penalty will only be payable where the employer's behaviour has "one or more aggravating features". It is not clear what this means but the Government has suggested unreasonable behaviour such as negligence or malice would constitute an aggravating feature. The penalty will be payable to the Government and will be reduced by 50% if it is paid within 21 days. 6 May 2014 Employment Tribunal Pre-claim Conciliation Before issuing a claim in the Employment Tribunal, the claimant will be required to notify Acas of their intention to bring a claim. Acas will then offer pre-claim conciliation to the parties for a period of one month. If either party refuses conciliation, or conciliation fails to reach a settlement, the claimant will be able to issue the claim in the Employment Tribunal. There will be a transitional period of one month from 6 April to 5 May 2014 during which pre-claim conciliation will be available from Acas but there will be no requirement on the claimant to notify Acas before issuing a claim in the Employment Tribunal. 30 June 2014 Flexible Working The right to request flexible working, which currently applies to employees who care for a child under the age of 17 (18 if disabled) or a dependant adult, will be extended to all employees with at least 26 weeks' continuous employment. The current statutory procedure for considering requests will be abolished, and replaced with a new general duty to consider requests reasonably, in line with a new Acas Code of Practice.

4 2014 Equal Pay Employment Tribunals will be given the power to order a pay audit where an employer loses an equal pay claim. The Tribunal will not order a pay audit where one has been carried out in the past three years, or where the employer has transparent pay practices, or where the employer can show a good reason why it would not be useful. The Government intends to consult separately on how a pay audit should be carried out Holiday Currently, most of the 28 day statutory holiday entitlement must be taken in the leave year in which it accrues, and cannot be carried forward to the following year (although up to eight days can be carried forward by agreement). The Government has consulted on proposals to amend the Working Time Regulations so that: workers who are prevented from taking their holiday due to sickness absence can choose to carry forward up to 20 days into the next holiday year (without needing the employer's agreement); workers who are prevented from taking their holiday due to absence on maternity, adoption, parental or paternity leave can choose to carry forward up to 28 days into the next holiday year (without needing the employer's agreement); and at any time (ie regardless of whether the worker has been absent from work) employers will be able to buy out or require carryover of up to eight days' holiday (without needing the worker's agreement) where there is an over-riding business need. Any changes were originally expected to take place in 2012 although this has now been delayed as the Government has not yet published its response to the consultation Sickness Absence The Government intends to introduce a New Health and Work Service, which will provide a state funded assessment by occupational health professionals for employees who are off sick for four weeks or more. Employees will be referred to the service by their GP (employers will only be able to refer employees in limited circumstances). An occupational health professional will provide a return to work plan and a case manager will oversee the assessment and implementation of the plan. It is intended that the service will be available in some areas from late 2014 but a full national service is not expected until April 2015.

5 April 2015 Maternity/Paternity/ Adoption and Parental Leave The Government is proposing to introduce new shared parental leave as an alternative to maternity and adoption leave. Maternity and adoption leave would remain available to mothers/adopters who do not wish to take advantage of shared parental leave. The new shared parental leave system would consist of: a two week period of compulsory maternity leave for the mother, to be taken immediately following the birth; and a 50 week period of shared parental leave, which could be taken by either parent in a single block or more flexibly (see below). Shared parental leave could be taken by both parents simultaneously or separately in a single block, or alternating taking small blocks of leave each (although each block would have to be a minimum of one week). However, parents can only take the leave flexibly if their employer agrees. The default position, where agreement cannot be reached, will be for leave to be taken in a single block by either or both parents. The rate of statutory pay for shared parental leave will be the same as for maternity leave, ie 90% of normal weekly earnings for the first six weeks then the statutory flat rate (currently ) for the following 33 weeks. The remainder of shared parental leave will be unpaid. Adoptive parents, and prospective parents in a surrogacy arrangement, may be eligible for shared parental leave and pay if they meet the relevant criteria. Shared parental leave would only be available to parents/adopters who have at least 26 weeks' continuous service. Fathers will retain the current right to two weeks' ordinary paternity leave, to be taken within 56 days of the child's birth. In addition to the new shared parental leave available in the child's first year, both parents will retain the current right to unpaid parental leave of 18 weeks per child and will be able to take this in respect of children up to the age of 18 (currently parental leave can only be taken in respect of children up to the age of five). The Government proposes that the changes will be introduced in April April 2015 Adoption Leave The 26 week service requirement for adoption leave will be removed, and statutory adoption pay will be increased to 90% of earnings for the first six weeks followed by 33 weeks at the statutory flat rate (currently adoption pay is payable at the statutory flat rate for the full 39 week period of paid leave). Autumn 2015 Childcare Voucher Scheme The Government intends to introduce a new tax free childcare scheme to replace the current employer supported childcare voucher scheme. The new scheme will allow working families to claim 20% of childcare costs for children under five (later to be extended to children under 12) up to a maximum of 1,200 per child each year. The Government is currently consulting on the details of how the scheme will work. Unlike the current childcare voucher scheme, the new scheme will not depend on participation by employers, as it will be open to all eligible working parents, whether employed or self-employed. Existing childcare voucher schemes will be closed to new joiners from autumn Any employee who is already a member of a childcare voucher scheme will be able to choose whether to stay within that scheme or join the new tax free childcare scheme instead.

6 No date Employment Agencies The Government is consulting on simplifying rules around employment agencies, including the circumstances in which agencies are entitled to claim transfer fees and the appropriate amount of the transfer fees. The consultation also considers whether individuals should be able to bring claims against employment agencies in the Employment Tribunal. No date Reservists As part of an overall reform of the UK's Reserve Forces, the Government is proposing to introduce legislation to make it unfair to dismiss an employee for reasons relating to their reserve service. No qualifying period will be required for such a claim. The Government also intends to gather evidence on whether reservists are disadvantaged when applying for jobs and, if necessary, legislate to provide additional protection for such job applicants.

7 If you have any queries on this edition of In the Pipeline, please contact any member of the Employment Department Partners: Andrew Lilley, Siân Keall, Tim Gilbert, Ed Mills Anna West, Adam Rice, Oliver Jones, Glendon Salter, Ailie Murray, Alice Heatley, Adam Wyman, Christopher Thomas Charmaine Pollock, Alex Fisher, Jenny Clayton, Xabier Reynoso, James Champness, Will Dixon, David Harford Travers Smith LLP 10 Snow Hill London EC1A 2AL T +44 (0) F +44 (0) Travers Smith LLP is a limited liability partnership registered in England and Wales under number OC and is regulated by the Solicitors Regulation Authority. The word "partner" is used to refer to a member of Travers Smith LLP. A list of the members of Travers Smith LLP is open to inspection at our registered office and principal place of business: 10 Snow Hill, London, EC1A 2AL. We are not authorised under the Financial Services and Markets Act 2000 but we are able, in certain circumstances, to offer a limited range of investment services because we are members of the Law Society of England and Wales and regulated by the Solicitors Regulation Authority. We can provide these investment services if they are an incidental part of the professional services we have been engaged to provide. The information in this document is intended to be of a general nature and is not a substitute for detailed legal advice.