Chartered Institute of Personnel and Development presentation on employment law changes and developments.

1. EMPLOYMENT LAW UPDATE
17 May, 2016
Presented by
Yeing-Lang Chong, Partner

2. Agenda
• NEW LEGISLATION – In brief
• NEW LEGISLATION – In the pipeline
• CASE LAW UPDATE
• EU REFERENDUM: The Brexit Effect
• Q&As

4. NEW LEGISLATION – In brief

5. National Living Wage
The National Minimum Wage (Amendment)
Regulations 2016
• In force from 1 April 2016
• New mandatory ‘National Living Wage’ for
workers 25 or older
• Tougher penalties on employers for non-
payment: maximum £20,000 per worker

6. National Living Wage
The new minimum wages from 1 April 2016 are:
• Age 25+ - £7.20ph (the National Living Wage)
• 21-24 - £6.70ph [£6.95 from 1 Oct 2016]
• 18-20 - £5.30ph [£5.55 from 1 Oct 2016]
• 16-17 - £3.87ph [£4.00 from 1 Oct 2016]
• Apprentices <19 (or in 1st year & 19+)
- £3.30ph [£3.40 from 1 Oct 2016]

7. Gender Pay Reporting
The Equality Act 2010 (Gender Pay Gap
Information) Regulations 2016
• In force: 1 October 2016
• Compulsory for private sector & voluntary
organisations employing 250+ staff
(public sector – date TBC)
• Requirement to publish prescribed info about
difference in pay between men and women

8. Gender Pay Reporting
• Employees who work in GB; contracts
governed by UK law
• Calculate gender pay gap by looking at:
▫ mean and median figures
▫ pay amongst men and women
• Pay = basic pay, holiday pay, maternity pay,
sick pay, shift premiums, bonuses, car or
clothing allowances

9. Gender Pay Reporting
• Now: collect data incl. figures on bonus
payments paid from 1 May 2016
• 1 May 2017: carry out calculations to determine
gender pay gap results
• By 30 April 2018: publish results of gender pay
gap analysis on website (as at 30 April 2017) (for
min. 3 years) & on Government reporting website
• Annual reporting required by 30 April each year.

10. NEW LEGISLATION – Coming up

11. Termination & Exit Payments
• Announced in March 2016 budget
• From 2018, termination payments
>£30,000 subject to employers’
national insurance contributions
• (<£30,000 is free of tax and will remain
free of NI contributions)

12. Termination & Exit Payments
• From 1 April 2016
• Public sector employees with £100,000+
annual earnings
• Requirement to repay termination
payments
• If returning to same part of sector within
12 months

13. Termination & Exit Payments
• Cap on public sector exit payments at
£95,000
• Applicable to lump sums (including
redundancy payments)
• No confirmed implementation date

14. Trade union law and strike ballots
Trade Union Act 2016
• Royal Assent received 4 May 2016
• Commencement date TBC

15. Trade Union Act 2016
Key provisions:
• requirement for at least 50% turnout in votes for
industrial action
• in certain ‘important’ public services - health,
education (<17 years), transport, border security
and fire sectors - additional threshold of 40%
support from all eligible members, to take
industrial action, must be met for action to be
legal

16. Trade Union Act 2016
Key provisions (continued):
• clearer description of the trade dispute and the
planned industrial action on the ballot paper
required, so that all union members are clear on
what they are voting for
• 6 month time limit (or 9 months if the union and
employer agree) for industrial action so that
mandates are always recent

17. Trade Union Act 2016
Key provisions (continued):
• transparent process for trade union subscriptions
that allows new members to make an active
choice of paying into political funds
• payroll deductions for trade union subscriptions
are only administered where the cost is not
funded by the public

18. Grandparents’ rights to Shared
Parental Leave and Pay
Proposal to extend shared parental leave and
pay to working grandparents. Aim:
- Increase flexibility and choice for working
parents
- Help support the costs of childcare during
the 1st year of child’s life
Implementation 2018?

19. Immigration Bill
Immigration Bill 2015-16
Enforcement not expected until October
2016 at the earliest

20. Immigration Bill 2015-16
Key provisions:
• Existing criminal offence of an employer
employing an illegal migrant extended from
‘knowingly’ to having ‘reasonable cause to
believe’ an employee is illegal worker
• Sentence for knowingly employing an illegal
worker raised from 2 to 5 years’ imprisonment
• New offence of illegal working: illegal workers
assets can be seized

21. Immigration Bill 2015-16
Key provisions (continued):
• Introduction of an ‘immigration skills charge’
on employers sponsoring workers from
outside Europe
• New requirement for public sector workers in
customer-facing roles to speak fluent English

22. CASE LAW UPDATE
Holiday Pay

23. Holiday Pay
1. Boris had 3 days’ outstanding holiday to take at the
end of 2015. How much pay in lieu of holiday can you
make to Boris?
2. Boris decides to take 5 days holiday. In calculating his
holiday pay, do you take into consideration his:
a) Overtime pay?
b) Commission payments?
3. How should you calculate Boris’ claim for holiday pay?
4. Boris makes a claim for his incorrectly calculated
holiday pay. How far back can he claim for?

24. Holiday Pay
Case Study:
1. Boris had 3 days’ outstanding holiday to take at the
end of 2015. How much pay in lieu of holiday can
you make to Boris?
2. Boris decides to take 5 days holiday. In calculating
his holiday pay, do you take into consideration his:
a) Overtime pay?
b) Commission payments?

25. Holiday Pay
• Minimum UK statutory requirement of a full time
employee: 28 days / 5.6 weeks incl. public holidays
• Bear Scotland v Fulton (2014):
▫ Non-guaranteed overtime should be included in
holiday pay
• British Gas Trading v Lock & another (2015):
▫ Commission must be included in holiday pay
• White & Others v Dudley Metropolitan BC (2016):
▫ Voluntary overtime should be included in holiday pay

26. Holiday Pay
3. How should you calculate Boris’ claim for
holiday pay?
4. Boris makes a claim for his incorrectly
calculated holiday pay. How far back can he
claim for?

27. Holiday Pay
• British Gas Trading v Lock & another
▫ Holiday pay is based on actual average earnings
• Deduction from Wages (Limitation) Regulations 2014
• In force: 8 January 2015
• Claims for back pay of incorrectly calculated holiday
pay limited to 2 years (Bear Scotland)
• Applicable to claims presented >1 July 2015

28. EU REFERENDUM:
The Brexit Effect

29. • EU referendum: 23rd June 2016
• Rights on which EU law has had significant effect:
▫ Discrimination
▫ Maternity and parental rights
▫ Protection of part-time, fixed-term and agency
workers
▫ Working time, incl. daily / weekly rest & time, holiday
pay
▫ TUPE
▫ Collective consultation
Principles

30. Remain or Leave?
1. Some areas – pay, dismissal, strike action -
largely within domain of UK law
2. UK required to give effect to EU derived
employment rights and ensure effective remedy
for infringement
3. EU derived employment rights operate as a
floor, not a ceiling to give protection to workers
4. Future Government to have complete legal
reign on social rights?

31. REVISION
1. LEGISLATION:
a) National Living Wage
b) Gender Pay Reporting
c) Termination & exit payments
d) Trade Union Act 2016
e) Grandparents rights to SPL & pay
f) Immigration Bill 2015-16
2. CASE LAW UPDATE: Holiday Pay
3. EU REFERENDUM: The Brexit Effect

32. Any questions?

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