Employment Legislation – Recent Important changes.

April 2015

Shared Parental Leave (Overview – see Section Two for more detail)

Existing maternity rights and rights connected to ordinary paternity leave and pay will continue unchanged from April, but the new right to shared parental leave (SPL) comes into force then. SPL allows parents to share leave in the first year after their child’s birth or adoption. Employees will only be eligible if their child is born / placed for adoption after 5th April this year. The leave is in addition to the right to “ordinary” parental leave. Additional Paternity Leave is abolished.

Here is a summary of the key points.

• Up to 50 weeks’ leave and 37 weeks’ pay can be shared between the parents if the mother brings her maternity leave and pay to an end early. Shared PL is calculated by deducting the number of weeks’ maternity leave taken or the leave curtailment date from 52. The first two weeks of Maternity Leave are compulsory leave and cannot be worked.
• The available shared parental pay is calculated by deducting the number of weeks’ statutory maternity pay the mother has received or the leave curtailment date from the 39 weeks of Statutory Maternity Pay.
• The partner of the employee who wants to take SPL must meet minimum work and earnings criteria for your employee to qualify for SPL. The service criterion is 26 weeks of employment or self-employment in the 66 weeks before the expected week of childbirth (EWC). The partner must also have average weekly earnings of at least £30 during 13 of those weeks.
• The employee must have 26 weeks’ service at the 15th week before the Expected Week of Childbirth to qualify, and remain in employment until the week before any period of SPL is taken.
• To qualify for shared parental pay, your employee must meet the qualifying requirements for SPL and have a partner who meets the employment and earnings test; have earned not less than the lower earnings limit (£112 per week from April) in the relevant period.
• At least eight weeks before the employee’s first period of SPL the employee must give a notice of entitlement and intention to take leave (an “opt-in notice”).
• At least eight weeks before the start of the period of SPL the employee must give the employer a “request for SPL” notice. This can be given at the same time as the opt-in notice.
• The available SPL and pay can be allocated between the parents.
• SPL must be taken in blocks of at least a week but does not have to be taken as a single period of leave and parents can elect to be on leave at the same time. Parents can put in three separate requests. If a single period of leave is requested the employee is entitled to take the leave; it cannot be refused. If more than one period of leave (discontinuous leave) is requested in the same notice the employer has 14 days in which to agree to the pattern of leave requested, refuse it or negotiate alternative dates. If alternative dates are agreed the employee can take the leave on those dates.
• An employee is entitled to cancel or request a variation of leave that has already been requested as long as the employer has at least eight weeks’ notice of the change.

The regulations do not make easy reading (that’s a charitable under-statement). ELT Associate Kate Russell has produced a guide and some template forms for this difficult set of regulations. If you would like a set, please get in touch by emailing pm@russellhrconsulting.co.uk

Adoption Rights

Also in April, a new set of rights will come into effect for those adopting. For the first time, pay will be the same as Maternity Pay for the first 6 weeks at 90% of average earnings. There will also be paid time off for 5 pre-adoption appointments (similar to Ante Natal Leave) for the “Primary Adopter” and two unpaid appointments for the “Secondary Adopter”.

Parental Leave (note – not the same as shared parental leave!)

The right to take unpaid parental leave previously applied to parents of children under the age of 5 – or under 18 where the child has a disability. From April the right is extended to all parents of children under the age of 18.

New Statutory Pay Rates – April 2015

Statutory sick pay will increase to £88.45 per week.  Statutory pay for maternity, paternity, adoption and shared parental leave will increase to £139.56 per week. The Lower Earnings Limit for National Insurance is £112 per week.

The limit on a ‘week’s pay’ (used to calculate redundancy pay and basic/additional awards) increases from £464 to £475.

The maximum compensation award for Unfair Dismissal increases from £76,574 to £78,335.

The daily rate of guarantee pay increases to £26; max of £130 – 5 days in any 3 months in the event of a “layoff” occurring.

Fit for Work Service

The Health and Work Service has been renamed as “Fit for Work” and is being introduced on a phased basis and is expected to be fully up and running by May 2015. It will provide:

• State funded assessments by occupational health professionals for employees who are off sick for 4 weeks or more;
• and Case management for employees with complex needs to facilitate their return to work.

The Department for Work and Pensions has published three sets of guidance notes for GPs, employers and employees on the new Fit for Work service (FFW). The service will be introduced on a phased basis. This is due to be completed by May 2015. The information is available at;  https://www.gov.uk/government/collections/fit-for-work-guidance.

FFW will provide free occupational health assessments and return to work plans to assist employees who have been on sickness absence for four weeks or more.

GPs and employers are encouraged to make referrals to FFW and while it is not mandatory, the guidance suggests that referral is the default position.  Once an employee is referred, FFW will contact them to undertake an assessment with a view to creating a return to work plan and a timetable to achieve a return to work. The Employer referral system is not expected to be available until Autumn 2015.

From January 2015 there is also a tax exemption of £500 a year (per employee) for medical treatment to help an employee to return to work.

In addition to referrals to Fit for Work assessments the Government has already introduced an advice line from 15th December 2014 which gives general work-related health advice and offer solutions to support any return to work, or at least sign post the caller to other sources of help.

The advice line for Scotland is 0800 019 2211 9:00-17:00, Mon-Fri. In England in Wales it is 0800 032 6235, 8:30 – 18:00 Mon-Fri. There is also a Welsh Language line on 08000192211.

Unlike the assessment service the advice line will be open to everyone, including the self-employed and those not in work

A guide for trade union reps, also useful for employers, can be found on the TUC website at:
http://www.tuc.org.uk/Fit%20for%20work%20guide

Education

All young people must be in education or training until the age of 18 (England).

Young Persons NI abolished

National Insurance contributions from workers under the age of 21 (with earnings less than (£42,285) are abolished from April 2015

Review of Important changes – January to March 2015
“Back-door” criminal record checks outlawed

It is now a criminal offence for employers to force job applicants and employees to obtain and then provide a copy of their criminal record by means of a subject access request under the Data Protection Act 1998. The offence of requiring the production of such records was created more than 15 years ago but has only been brought into force on 10 March 2015.

The new offence, which has been brought into effect by the Data Protection Act 1998 (Commencement No. 4) Order 2015 SI 2015/312, covers employees and prospective employees as well as individuals who contract to provide services to another. The Information Commissioner has long disapproved of the practice of requiring applicants or existing workers to acquire and produce a copy of their criminal record. An ICO press release issued on 9 March described this as a ‘back-door’ practice undertaken by ‘rogue employers’. The ICO’s Data Protection Employment Practices Code states that, where employers need to protect their business, customers or clients by verifying an individual’s criminal history, they should seek disclosure through the Disclosure and Barring Service.

ACAS Code on Discipline

This Code, introduced in 2009, was revised in January 2015 to clarify the right to a companion in “formal” disciplinary and grievance procedures. This was necessary following a court decision which disagreed with the previous ACAS Guidance. The right to be accompanied allows the Employee to decide on a reasonable choice of person (essentially a colleague or Union Official); it is not the Employer who can decide whether the Employee’s choice is “reasonable”.

Zero Hours

It is reported that retailer Sports Direct is facing claims of up to £10 million from employees who missed out on bonus payments as they were on the controversial zero hours contracts. The firm has already settled out of court on other claims over employment status, and have reportedly changed their advertising and employment contracts. The Government has included plans to ban “exclusivity clauses”, in an Employment Bill.

Redundancy consultation decision.

The European court has produced a legal opinion on the meaning of ‘establishment’ for collective redundancy purposes in the Woolworths case. This is an Opinion only and the “full” decision is expected later this year. See the Case Law section for full details of the case.

December 2014

The government has introduced the Deduction from Wages (Limitation) Regulations 2014. They do two things:-

(1) limit all unlawful deductions claims to two years before the date the Employment Tribunal claim is lodged; and,

(2) explicitly state that the right to paid holiday is not incorporated as a term in employment contracts.

The effect? To remove any chance employees have of bringing long-term claims for back holiday pay, either in the tribunal or civil courts. But the new Regulations don’t apply to claims presented before 1st July 2015.

November.

On 4 November 2014, the Employment Appeal Tribunal (EAT) handed down its decision in Bear Scotland Ltd v Fulton and Baxter, Hertel (UK) Ltd v Wood and others and Amec Group Limited v Law and others. It is a ground-breaking decision which gives some clarity to various European Judgments on the issue.

The key points to take from the decision are that:

• Holiday pay should be equivalent to a worker’s “normal” pay. What is “normal” depends on whether the payment in question has been made for a sufficient period of time to justify the label of being “normal” (the regularity / pattern of payments will be relevant in this regard).
• Overtime which a worker is not permitted to refuse (i.e. guaranteed and non-guaranteed overtime) must count as part of their “normal” pay when calculating the pay they should receive on holiday.
• The Working Time Regulations which transposed the European Working Time Directive into UK law is incompatible with the Directive, but can be interpreted so as to give effect to it using a strong interpretative technique, by interpolating words.
• So far as historic underpayments of holiday pay are concerned, the vast majority of workers will only be able to recover underpayments in the last three months (with a small number being able to recover sums further back).

However, there are various intricacies which employers and workers need to appreciate:

• The Judgment only applies in respect to the 20 days’ annual leave guaranteed under the Working Time Directive, not the additional 8 days’ leave which is a purely domestic-driven right. As such, workers can expect to receive a higher rate of holiday pay (that which includes overtime, commissions and various other payments) for 20 out of their 28-days’ holiday per year, with the remaining 8 days being paid at the level it previously was, unless their employer decides to pay all 28 days at the higher level.
• Where workers’ previous periods of holiday are separated by a gap of less than 3 months, they may be able to recover underpayments for a longer period than the 3-month limit set out above, by arguing that the underpayments form part of a “series”. Even in those cases however, it is unlikely that they will be able to go back in time to recover underpaid holiday for more than one holiday year (due to the way the EAT construed the difference between the European 20 days’ leave and the domestic 8 days’ leave as potentially breaking the “series” of deductions from pay).
• There is no definitive statement in the Judgment to confirm that purely voluntary overtime (that which the employer is not obliged to offer and the worker is not obliged to accept) would also be included. However, comments in the Judgment and the underlying ethos of the various European-level decisions could be said to lean towards the view that voluntary overtime which is regularly worked by a worker would count as part of their “normal” pay and hence should be included when calculating holiday pay.
• Whilst the domestic 12-week reference period for calculating average pay might be maintained going forward, there could be a change to this (brought about through case law or legislative change) due to the fact that some workers’ pay is highly variable throughout the year and a 12-week snapshot could be misleading depending on the 12-week period captured. For example, a retail worker who does far more overtime during certain periods (perhaps Christmas) would have a far higher average number of hours as their “normal pay” if they took leave in January. Similarly, a salesperson who takes leave shortly after an unusually large commission payment could receive inflated holiday pay which is not representative of “normal pay”. In such cases, a longer period may be necessary and justified. In one of the Opinions of an Advocate General, it was suggested that a 12-month reference period might be appropriate. This is not binding however, and we shall have to wait and see how this issue is resolved.

As a result of this Judgment and the decisions in Williams v British Airways and Lock v British Gas Trading Ltd we can now say with some confidence that the following elements of a worker’s pay should count when calculating their 20 days’ holiday derived from the Directive:

• Commission payments
• Guaranteed and non-guaranteed overtime that is regularly worked
• Incentive bonuses
• Travel time payments (not expenses, but payments for the time spent travelling)
• Shift premia
• Seniority payments (payments linked to qualifications / grade / experience)
• Stand-by payments
• Certain other payments (such as “flying pay” and “time away pay” provided such  payments are not expenses).

September/October

• New rights for those serving in the army reserve have now come into force. Individuals who allege that their dismissal was connected with their membership to the army reserve will no longer need to have the usual two-year qualifying period required to claim unfair dismissal. The employees will still need to prove that they were unfairly dismissed due to their absences from work. They will not be automatically treated as unfairly dismissed

Minimum Wage.

The following changes came into effect on 1 October 2014:

The NMW rate for adults increased from £6.31 to £6.50 per hour;

The NMW rate for workers aged 18 to 20  increased from £5.03 to £5.13 per hour;

The NMW rate for 16 and 17 year olds  increased from £3.72 to £3.79 per hour; and

The apprentice rate of the NMW, (which applies to apprentices aged 16 to 18 and those aged 19 or over who are in the first year of their apprenticeship), increased from £2.68 to £2.73 per hour.

The accommodation offset (where the employee is provided with accommodation and charged by the Employer) increased from £4.91 to £5.08 per day.

From 1 October 2014 expectant fathers, or the partner of a pregnant woman, will be entitled to take unpaid time off work to attend two antenatal appointments with their partner.

The Department of Business, Innovation and Skills has produced a guide for Employers which sets out a series of FAQs including who is entitled, how much time an employee can take off, and an employee’s right to redress if their request for time off is refused.

From 1 October 2014. Tribunals will be given the power to order a company to carry out an Equal Pay Audit where the employer has lost an Equal Pay claim or a related Sex Discrimination claim.

From 1 October 2014. The Reserve Forces (Payments to Employers and Partners) Regulations 2014 come into force.

At present, when called up, military reservists are paid directly by the Ministry of Defence – and employers can claim expenses in respect of additional costs incurred whilst replacing the reservist (to a maximum of £110 per day).

From 1st October, small and medium employers will also be able to receive up to £500 per month for each full month a reservist is absent from work (reduced pro rata for parts of a month, or part-time workers).

Pension Auto Enrolment

Pensions auto-enrolment – the time period for employers to auto-enrol eligible jobholders into a qualifying pension scheme is extended from one month to six weeks.

Auto-enrolment dates for small and medium sized employers are as follows: