In this article, we have attempted to highlight the key developments coming up in 2019 and beyond. If you want to keep up to date with the latest developments, then sign up to our newsletter here.
This year is expected to be an eventful year in the world of employment law. Brexit will no doubt continue to dominate the press, a number of legislative measures will be coming into force, we will no doubt hear details of forthcoming employment law reforms, and the courts are set to hear a number of interesting appeals.
So, brace yourselves, the hot topics to look out for in 2019 are as follows:
Employment law reform: The Good Work Plan
On 17 December 2018, the government published the Good Work Plan (“the Plan”), which sets out what it described as "the biggest package of workplace reforms for over 20 years". The Plan builds on the government’s response to the Taylor Review recommendations in February 2018, outlines an intention to improve working conditions for agency workers, zero-hour workers and other atypical workers. Many of the measures do not yet have specific timescales, but those measures for which legislation has already been published, are mostly due to come into force in April 2020.
These measures include a right for workers to request a more stable and predictable contract, an increase in the period required to break continuity of employment from one week to four weeks, a ban on deductions from staff tips and unsurprisingly a commitment to improve the clarity of the employment status tests, accepting the Taylor Review's recommendation that differences between the status tests in employment law and tax law should be reduced to a minimum to avoid any contradiction or confusion.
In the Agency Workers Regulations 2010, the government intends to repeal the "Swedish derogation" which excludes agency workers from the right to equal pay with comparable directly employed employees if they have an employment contract which guarantees pay between assignments. This will also amend the Employment Rights Act 1996 to extend the right to a written statement of terms to workers and expand the information which must be provided in these statements.
The plan also proposes new measures which are designed to improve enforcement, by naming and shaming those employers who fail to pay tribunal awards on time as well as significantly increased financial penalties for employers who commit an "aggravated breach" of employment rights.
Increased financial penalties for employers: The draft Employment Rights (Miscellaneous Amendments) Regulations 2019
These are due to come into force on 6 April 2019 and are set to quadruple the maximum penalty for an aggravated breach of employment law from £5,000 to £20,000. Eventually, they will also extend to all workers the right to a written statement of terms and make it easier for employees to request to set up information and consultation arrangements, although these measures will take effect in April 2020.
CEO pay the big out: The Companies (Miscellaneous Reporting) Regulations 2018
This came into force on 1 January and bring in mandatory reporting of the ratio between CEO pay and average staff pay for companies with 250 or more employees, along with other corporate governance changes, all of which will be effective for accounting periods beginning on or after 1 January 2019 (and so the first pay ratio reports will be published in 2020). The measures include the obligation to prepare an annual statement of engagement with employees for companies with 250 or more employees (including details of any information and consultation arrangements, and how directors have had regard to employee interests).
Ethnicity pay gap reporting
On 11 October 2018, the government launched a consultation on mandatory ethnicity pay gap reporting. The consultation seeks employers' views on issues such as reporting methods and closes on 11 January 2019.
Employment status tests
Given the government's commitment in the Good Work Plan to improve the clarity of the employment status tests, including the potential harmonisation of the position under employment and tax law, we can expect to see further developments in this area in 2019.
Itemised payslips
The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) (No.2) Order 2018 (SI 2018/529) is due to come into force on 6 April 2019. This legislation introduces a right for all workers to be provided with an itemised pay statement and the ability to enforce this right at an employment tribunal.
The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) Order 2018 (SI 2018/147) is set to come into force on the same day and will require itemised payslips to contain the number of hours paid for where a worker is paid hourly.
National minimum wage
On 17 December 2018, the government launched a consultation seeking views on whether certain aspects of the national minimum wage (“NMW”) legislation should be amended to ensure that they do not inadvertently penalise employers. The consultation focuses on the complex rules on "salaried hours work" (one of four types of work in the National Minimum Wage Regulations 2015 (SI 2015/621) under which employers can average out pay over a calculation year for NMW purposes) and whether they effectively prevent exploitation of workers. The government is also seeking views on the impact of the NMW rules on salary sacrifice schemes, in particular whether employers are withdrawing schemes from low-paid workers in order to avoid non-compliance with the NMW. The consultation closes on 1 March 2019.
Brexit
The Prime Minister had announced that the vote in the House of Commons on the withdrawal agreement and political declaration would now take place in the week commencing 14 January 2019. It is therefore difficult to predict with any certainty the final terms on which the UK will leave the EU, and whether this will take place on 29 March 2019.
Potential developments to look out for:
Non-disclosure agreements
An inquiry was launched into the use of non-disclosure agreements (commonly known as NDAs) in harassment and discrimination cases.
New statutory code of practice on sexual harassment
The Equality and Human Rights Commission have been asked to develop a statutory code of practice on sexual harassment. It is suggested that observing this code will help employers demonstrate that they have taken reasonable steps to prevent sexual harassment from taking place in the work place.
Employment tribunal reforms
The Law Commission launched a consultation on employment tribunal reform. The consultation has sought views on issues such as whether the three-month time limit for most employment tribunal claims should be changed as well as some provisional such as increasing the employment tribunal's £25,000 limit for contract claims. The consultation closes on 11 January 2019.
Reintroduction of employment tribunal fees?
Whilst no timeframe has been suggested, the Ministry of Justice has noted that the Supreme Court judgment in R (on the application of Unison) v Lord Chancellor leaves open the possibility of a new scheme which would strike a balance between increasing employment tribunal funding and safeguarding the delivery of justice. In November 2018 it was suggested in evidence given to the House of Commons Justice Committee that a new fee regime was in development.
Tips and service charges
The government has announced plans for new legislation to prevent employers from keeping tips and service charges intended for workers. No specific timescale has been given, but the government has said that the changes will be introduced at "the earliest opportunity". These plans were reiterated in the government's Good Work Plan published in December 2018.
Grandparental leave
Despite government announcements of plans to extend shared parental leave and pay to working grandparents by 2018, further development is still awaited.
For help and advice on employment matters please contact Emma-Louise Hewitt on 0808 166 8827 or email e.hewitt@sydneymitchell.co.uk
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