UK Employment Hub 

Zero-hours contracts remain controversial and, last month, fast food chain, McDonald’s, confirmed that it will offer its workforce of 115,000 a choice as to whether to work fixed hours or remain on their zero-hours contracts. McDonald’s had previously trialled this arrangement and they found that only around 20% of staff chose to move to fixed hours, with the majority preferring the flexibility of the zero-hours arrangement.

There has been speculation that, inspired by the McDonald’s arrangement, Matthew Taylor’s highly anticipated review on the gig economy is likely to recommend a new right for workers on zero hours contracts to secure a guaranteed number of hours. It is expected that the right will be structured in a similar way to the right to request flexible working, with the employer maintaining the right to refuse the request for specific statutory reasons only.

The Labour party has pledged to ban zero hours contracts completely but the McDonald’s experience suggests that there may still be a place for them in the modern working environment.

With just over three weeks until the General Election, the parties are getting ready to pack a punch. It seems that workers’ rights are high on the political agenda and likely to feature in all the main manifestos, official versions of which are (at the time of writing this post) yet to be released.

Prime Minister May has set out 11 key employment-related pledges and, not only has she guaranteed that all workers’ rights currently offered under EU law will be maintained in spite of Brexit, she has also committed to building on these entitlements. Amongst other things she has pledged that the national living wage will rise “in line with average earnings by 2022”. Her “new deal for workers” is also likely to include a statutory right to a year’s unpaid leave to care for a relative, two weeks’ statutory bereavement leave in the event of the death of a child, “better rights for workers in the gig economy”, and a commitment that workers’ pensions will be given new protections from “irresponsible behaviour” by bosses.

The Labour Party and the Greens are committed to increasing the minimum wage to £10 per hour. Both Labour and the Liberal Democrats have pledged to end the 1 per cent pay cap on public-sector pay and to ensure that these workers receive pay rises in line with inflation if they win the election. Indeed Labour’s manifesto is due to boast a 20-point plan, including a pledge to scrap employment tribunal fees, banning zero hours contracts, repealing the Trade Union Act 2016 and introducing four new UK-wide bank holidays. And there’s also a focus on family friendly rights, with both Labour and the Liberal Democrats having made commitments to extend paternity leave entitlement.

Following the recent introduction of gender pay gap reporting, the Conservatives and the Liberal Democrats have both said that they would bring in mandatory reporting on ethnicity gaps for organisations with 250 employees or more.

What seems to be apparent from the pledges is that there is in fact a significant overlap between the parties’ positions on worker rights. Whatever happens at the General Election on 8 June, we can expect to see some significant developments in employment law over the course of the next term.

April is a key month for employment law changes and this April is no different. 6 April is “D-Day” for a number of significant changes. By way of reminder:

1 April

• National minimum wage – the National Living Wage (for workers aged 25 and over) increased from £7.20 to £7.50 and there were also changes in the other bands.

Weeks commencing after 2 April

• Cap on a week’s pay  – the cap on a week’s pay (which is used in statutory redundancy pay calculations for example) increased from £479 to £489.

5 April and onwards

• Gender pay gap reporting – employers with 250 employees should have collated their relevant data on the first annual “snapshot date” yesterday. Today the work on calculations can begin! Private employers have a 12 month window (4 April 2018) before calculations must be published on the employer’s website and the relevant government website. Remember that public sector employers have a earlier snapshot date (31 March), their calculations need to be published by 30 March 2018 and every four years thereafter.

From 6 April

• Unfair dismissal compensatory award – the statutory cap increases from £78,962 to £80,541.  Don’t forget that the cap will be one year of the employee’s gross salary if lower.
• Apprenticeship levy – UK employers in the public and private sectors with annual wage bills of £3 million or more have to pay their monthly levy payments;
• Immigration skills charge – employers who sponsor workers under tier 2 will have to pay £1,000 per year, or £364 if they are a small employer or a charity;
• IR35 – new rules apply to public authorities paying personal service companies or other intermediaries. The public authority will need to make tax and National Insurance deductions as appropriate;
• Salary sacrifice – relief on benefits in kind provided via salary sacrifice arrangements is being scaled back for benefits entered into from today.

As part of the government plans to reduce Britain’s reliance on migrant workers, from 6 April 2017 employers may have to pay an immigration skills charge of £1,000 per employee.

The skills charge will apply to a sponsor of a Tier 2 worker assigned a certificate of sponsorship in the “General” or “Intra-Company Transfer” route and who applies from:

• outside the UK for a visa
• inside the UK to switch to this visa from another
• inside the UK to extend their existing visa

The skills charge does not apply if you are sponsoring:

• a non-EEA national who was sponsored in Tier 2 before 6 April 2017 and is applying from inside the UK to extend their Tier 2 stay with either the same sponsor or a different sponsor
• a Tier 2 (Intra-Company Transfer) graduate trainee
• a worker to do a specified PhD level occupation
• a Tier 4 student visa holder in the UK switching to a Tier 2 (General) visa
• Tier 2 family members (“dependants”).

As the charge applies to the sponsor and not the individual, if a sponsor has paid it in respect of an individual who then seeks to change sponsor, the new sponsor will also be required to pay the levy.
A lower rate of £364 per certificate of sponsorship applies for smaller sponsors and charities. You will usually be considered a small business if:

• your annual turnover is £10.2 million or less
• you have 50 employees or fewer

The charge is in addition to all other application fees. Its purpose is to cut down on the number of businesses taking on migrant workers and to incentivise employers to train British staff to fill those jobs.

This week new limits applying to certain awards of employment tribunals, and other amounts payable under employment legislation, have been increased.

The increases apply where the event giving rise to the entitlement to compensation or other payments occurred on or after 6 April 2017. Limits previously in force are preserved in relation to cases where the relevant event was before 6 April 2017.

Key new relevant limits are as follows:

• Minimum basic award in cases where a dismissal is unfair by virtue of health and safety, employee representative, trade union, or occupational pension trustee reasons: Old limit – £5,853; New limit – £5,970
• Limit on amount of guarantee payment payable to an employee in respect of any day: Old limit – £26.00; New limit – £27.00
• Limit on amount of compensatory award for unfair dismissal: Old limit – £78,962; New limit – £80,541
• Maximum amount of “a week’s pay” for the purpose of calculating a redundancy payment or for various awards including the basic or additional award of compensation for unfair dismissal: Old limit – £479; New limit – £489

Following our post on 22 December 2016, “2016: A year of discontent?” the Trade Union Act 2016 (Commencement No. 3 and Transitional) Regulations 2017 SI 2017/139 have been confirmed and the main provisions of the Trade Union Act 2016 are set to come into force on 1 March 2017.

The key provisions coming into force on 1 March 2017 include:

• a 50 per cent turnout requirement for all ballots;
• the requirement that 40 per cent of those entitled to vote must do so in favour of industrial action in “important public service” ballots (including the health, education, transport and border security sectors);
• new rules on information requirements, including the requirement for a clear description of the trade dispute and the planned industrial action on the ballot paper;
• an extension of the notice required for strike action from seven to 14 days; and
• restrictions on “check-off” arrangements which require unions to make a reasonable contribution to the costs of administration.

You can find the full regulations here.