Employment Law Update Laura Merrylees and Sheila Attwood

Employment law update - agenda

• Trade Union Act 2016• Public sector exit payments – repayment and cap• Holiday pay• Gender pay gap reporting• Apprenticeship levy

Trade Union Act 2016

Trade Union Act 2016 - Balloting

• 50% turnout threshold of those entitled to vote for all ballots – simple majority of those voting in favour of action• Additional threshold of 40% of those entitled to vote

in ballots related to important public services (IPS) must vote in favour of action

Trade Union Act 2016 – Important public services• Additional 40% threshold applies where the

majority of those are “normally engaged” in the provision of important public services• Government to introduce regulations and guidance

defining those subject to 40% threshold• To include health, education, transport, fire, border

security and other public-services sectors• “Reasonable belief” defence for a trade union

Trade Union Act 2016 – Electronic balloting• Government has committed to an independent

review of electronic balloting for strike ballots within 6 months• No legal commitment to its introduction

Trade Union Act 2016 – Industrial action• Doubling of minimum notice of industrial action to

14 days (or seven by agreement)• Voting paper to include a summary of the dispute,

period within which action is expected to take place and type of industrial action, short of a strike, where relevant• Ballot mandate expires after six months, or up to

nine months if both sides agree

Trade Union Act 2016 – Picketing• Union must appoint a picket supervisor who is

readily identifiable at picketing location • Supervisor to have a letter of authorisation from

union and be familiar with Code• Authorisation letter to be shown to the employer

on request

Trade Union Act 2016 – Check off• Check-off deductions for union members in the

public sector can still be made subject to conditions• Alternative means of payment available to

members• Union makes reasonable payments towards

employer’s costs for the deductions• Government to delay implementation by 12 months

Trade Union Act 2016 – Facility time• Public-sector employers with at least one trade

union official required to publish facility time information• Further regulations required to introduce the

change• Provision to allow Government to bring future

regulations into force capping amount and cost of facility time

Public sector exit payments –

repayment and cap

Draft Repayment of Public Sector Exit Payments Regulations 2016• Provision for repayment contained in the Small

Business, Enterprise and Employment Act 2015 • Repayment of Public Sector Exit Payments

Regulations 2016 – Government originally intended to implement by April 2016• Latest consultation closed on 25 January 2016

Draft Repayment of Public Sector Exit Payments Regulations 2016• Provision for higher earning public-sector

employees to repay an exit payment if they re-join the public sector within a year• Earnings threshold of £80,000• Applies to individuals who return to any part of the

public sector• Applies to contractors who return “off-payroll”

Draft Repayment of Public Sector Exit Payments Regulations 2016

• Amount to be repaid will be reduced by a taper over time• Applies to employer payments to provide

unreduced pensions on early retirement• Amount of any statutory redundancy payment will

not be subject to repayment

Draft Repayment of Public Sector Exit Payments Regulations 2016

• Payments in scope for repayment include:• Redundancy (voluntary and compulsory)• Payments of the balance of a fixed-term contract• Settlement agreements

Draft Repayment of Public Sector Exit Payments Regulations 2016

• Excluded payments include:• For incapacity resulting from accident, injury or illness• Payment in lieu of notice• Accrued but untaken leave

Draft Repayment of Public Sector Exit Payments Regulations 2016

• Former employer obliged to keep a record of the payment for three years• Employee obliged to inform old and new employer

if exit payment has been made in last 12 months

Draft Public Sector Exit Payment Regulations 2016• Provision included in the Enterprise Act 2016• Draft Public Sector Exit Payment Regulations 2016 –

expected to come into force in October 2016

Draft Public Sector Exit Payment Regulations 2016• Limits the total aggregate value of an exit payment

to a public-sector employee to £95,000

Draft Public Sector Exit Payment Regulations 2016Payments that form part of the cap include:• Redundancy (voluntary or compulsory)• Payments of the balance of a fixed-term contract• Payment in lieu of notice• Settlement agreements• Employer payments to provide unreduced pensions on early retirement

Excluded payments include:• Injury or ill health related payments• Accrued but untaken leave

Future developments

• Consultation on reforms to public-sector exit payments – closed on 3 May 2016• Consultation on reform of IR35 legislation in the public sector – due

to close on 18 August 2016

Holiday pay

Holiday pay – Overview• Working Time Regulations 1998 implement the

European Working Time Directive• Health & Safety measure• Workers are entitled to 5.6 weeks’ leave in each

leave year

Holiday pay – Overtime hours• Worker must receive “normal remuneration” during

period of paid annual leave• British Airways Plc v Williams and Others –

payments should be included in the calculation of holiday pay if they are “intrinsically linked” to the performance of the worker’s duties• Neal v Freightliner Ltd – Employment Tribunal

decision which found that elements including shift premia and overtime should be included

Holiday pay – Overtime hours• Bear Scotland Ltd and others v Fulton and others;

Hertel (UK) Ltd v Woods and others; Amec Group Ltd v Law and others [2015]• Concerned compulsory but non-guaranteed

overtime • Non-guaranteed overtime to be included in the

calculation of holiday pay• Patterson v Castlereagh Borough Council [2015]

IRLR 721 NICA – inclusion of voluntary overtime where “normally carried out” and was an “appropriately permanent feature” of the worker’s pay

Holiday pay – Overtime hours• Guaranteed and obligatory non-guaranteed

overtime to be included in the calculation of holiday pay (NB appeal in Lock v British Gas)• Voluntary – is it part of “normal remuneration”• Claims – series of deductions broken by a gap of 3

months • The Deduction from Wages (Limitation) Regulations

2014 (SI 2014/3322) – claims brought on or after 1 July 2015 limited to two years

Gender pay gap reporting

Gender pay gap and equal pay

• Current obligations - public sector equality duty• Definitions:• Equal pay – differences between individuals or groups

performing the same or similar work• Gender pay gap – differences in average earnings of men

and women, regardless of role

Why gender pay gap reporting now?

• Representation• Senior levels• More women than men in lower-paid roles

• Impetus• If measure the gender pay gap, and report it,

are more likely to act on it

“What gets measured gets managed; what gets publicly

reported gets better managed”

Gender pay gap reporting

• Equality Act 2010 (Gender Pay Gap Information) Regulations 2016• Private and voluntary sector• 250+ employees – someone who “ordinarily works

in Great Britain and whose contract of employment is governed by UK legislation”• Annual reporting

Gender pay gap measures

Five benchmarks to report:• Mean and median pay• Bonus pay• Receipt of bonuses• Pay bands

Definitions• What constitutes pay? • What is a bonus?• Quartile pay bands

Gender pay gap outcomes

• Five benchmarks - no raw data • Confirmation information is accurate• 12-month time lag• Employer’s website, plus government website – league

table or database?• Narrative• Why is there a gap? • What are we doing about it?

“If you don’t tell your story, someone else

will”

What's next?

• Regulations come into force – expected October 2016• Pay – 30 April 2017• Bonuses – 30 April 2016• Public sector – Government pledged to "extend our

plans for gender pay gap reporting…to include the public sector"

Apprenticeship levy

Apprenticeship levy

Paying in….• 6 April 2017• 0.5% of entire paybill (wages, bonuses, commissions,

pension contributions). Minus £15,000pa allowance• All employers, with a paybill of more than £3 million a

year. Payable through PAYE the next month

…Getting out• Digital apprenticeship service account + top-up (England)• Time-bound

Apprenticeship levy – planning ahead

• Funding the levy • Can't be used to pay wages• Change to National Insurance Contributions

• Training• Existing apprenticeships continue under current funding

arrangements• Review of training

• What might you want to change? What roles could be done as an apprenticeship

For further information on employment law, good practice and other HR resources, visit us online:

www.xperthr.co.uk XpertHR

laura.merrylees@xperthr.co.uksheila.attwood@xperthr.co.uk