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Employment law - key changes and forthcoming developments for 2016

Employment law - key changes and forthcoming developments for 2016

Employment law solicitor Natalie Ruane talks us through some key changes and forthcoming developments in employment law for 2016.

There are some key changes expected in 2016 arising from updates in UK employment law and decisions in the UK and European Courts. We have summarised the main changes so far this year and those expected in the next 9 months.

New National Living Wage

This imminent change takes effect for workers aged 25 and over on 1st April 2016 at a new rate of £7.20 per hour. A range of measures has also been announced to improve compliance with the national minimum wage and national living wage, including a doubling of the penalty for employees who fail to pay – increasing to 200% of the arrears (up to the current maximum of £20,000 per employee), and a new penalty of being disqualified from being a company director for 15 years.

On 14th March the Government accepted the recommendations from the Low Pay Commission for increases in the National Minimum Wage to come into force from 1st October 2016.  The changes are as follows:

                21 – 24 year olds £6.95 per hour

                18 – 20 year olds £5.55 per hour

                16 – 17 year olds £4.00 per hour

                Apprentice Rate £3.40 per hour

Zero hours workers

From 11th January 2016, exclusivity clauses in zero hours contracts are now unenforceable under section 27A(3) of the Employment Rights Act 1996.

This means that any worker under a zero hours contract can now bring a claim against their employer if they are subject to a detriment or dismissed as a result of a breach of any exclusivity clause in the contract, or as a result of not adhering to an exclusivity request. This is regardless of length of service. The question remains as to how zero hours workers can redress any unfavourable treatment they might suffer as a result of turning down work due to their other commitments, i.e. not being offered work when it becomes available – so it will be interesting to see how this area of law develops to deal with this issue.

Enforcement of Tribunal awards

Section 150 of the Small Business, Enterprise and Employment Act 2015 inserts a new Part 2 into the Employment Tribunals Act 1996 to allow financial penalties to be imposed on employers who do not pay employment tribunal awards or sums due under an ACAS agreement (COT3) – expected to come into force in April 2016.

Grandparental leave and other changes to childcare provisions for workers

The government has plans to extend shared parental leave and pay to working grandparents by 2018, so that grandparents can share the paid leave currently only afforded to parents.  This will help working parents to return to work sooner without the financial burden of paid childcare.

This is further supported by the government’s proposals to increase the provision of free childcare for eligible working parents of children aged three and four years old to 30 hours a week (for 38 weeks of the year).

The government also plans to remove the current system of childcare vouchers and introduce a new tax-free childcare scheme under which working families will be able to claim 20% of qualifying childcare costs for children under five (and children with disabilities under 17).

The government will consult on these issues in the first half of 2016.

Gender pay gap reporting

On 9th February 2016, the Government Equalities Office published a report on closing the gender pay gap. On 12th February 2016, the government published its response to the consultation.

Under the new regime, affected employers will be required to publish an annual report showing the overall gender pay gap in their organisation, calculated using both mean and median hourly pay over a specific pay period (normally a week or a month, depending on the employer's usual pay cycle). The report must include information on the gender balance across the employer's different pay ranges, separate information on the employer's "gender bonus gap", and the proportion of male and female employees that received a bonus.

The regulations are expected to come into force on 1 October 2016. If so, employers will be required to have a snapshot of gender pay gap data prepared for 30th April 2017 and will need to publish the first gender pay reports within 12 months of that date.

Modern Slavery

The Modern Slavery Act 2015 is aimed at combating crimes of slavery and human trafficking by ensuring that businesses are transparent about what they are doing to tackle these issues, specifically focusing on supply chains.

Under Section 54 of the Modern Slavery Act 2015 where a commercial organisation’s turnover exceeds a prescribed amount (£36 million in respect of financial years ending on or after 31st March 2016), they are required to prepare a slavery and human trafficking statement for that financial year.

The statement must disclose what steps the organisation has taken to ensure that human trafficking is not taking place in any of its supply chains or its business; or state that it has taken no such steps.

This statement will include information about the business’s structure, commercial activities, supply chains, due diligence processes, training, assessment and management of risk, and whether the steps taken are effective to ensure that there is no slavery or human trafficking in its supply chains.

About the author

Natalie Ruane profile photo

Natalie Ruane

Natalie is a Partner and leads the Employment Law & HR team and specialises in education.

Published: Friday 18th March 2016
Categorised: Employment

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