In light of recent case law and new legislation coming into force, we look at 5 employment updates likely to give employers a fright this Halloween season.
1. National Living Wage
A new National Living Wage is to be introduced in April 2016. The National Living Wage is a compulsory higher wage for more experienced workers aged 25 and over. The National Living Wage will be £7.20 an hour from next April, with the figure rising to £9.00 by 2020.
Smaller businesses working within extremely competitive markets with little to no profit margins face the possibility that the higher enforced statutory wages will lead to fewer jobs being created, fewer hours for existing staff and in some circumstances, job losses.
Preparation in advance of the changes is key and organisations who have any number of employees eligible to benefit from the compulsory statutory wage need to firstly seek means of improving net profit to reduce the deficit resulting from the increased wages and secondly make effective financial provisions to ensure that the increased wage has a minimal impact of the finances of the business.
2. Gender pay gap reporting to be mandatory
On 14 July 2015, the government launched its consultation 'Closing the gender pay gap.' Draft regulations are expected in the first half of 2016. The aim of the new regulations is to require businesses with 250 or more employees to carry out an equal pay review and publish information about their gender pay gap.
At present, it is not clear what information should be published or where publication needs to take place. However, employers with disparate pay structures may face damaging and detrimental consequences if publication of the pay information shows significant differences both in terms of their ability to recruit and retain staff and their reputation in the marketplace.
Employers should consider carrying out internal equal pay audits to assess their current position. Now is the prime time to start making changes and minimising any potential risks that may be in existence.
3. Employee's choice of companion to attend disciplinary investigation
The recent case of Stevens v University of Birmingham held that when the University refused to allow an employee to be accompanied at an investigation meeting by an individual of his choice, they had breached the employee's contract of employment. This is despite express terms within the employee's contract which stated that the employee was only entitled to be accompanied by a trade union representative or a friend who was another employee of the University.
The employee in the case did not have any suitable colleagues within the University, the only colleagues being those who would be called as witnesses in the investigation. Additionally, the employee was not a member of a trade union, although he was a member of the Medical Protection Society (MPS) which due to an informal arrangement, assists the doctors' trade union, where the professional is a member of both organisations, in matters of professional conduct. The employee wished to be accompanied by an MPS representative.
The High Court held that whilst there was no contractual right requiring the University to allow the MPS representative to attend, the University's refusal of this was a breach of the implied term of mutual trust and confidence. It would be wholly unfair to deny the employee the accompaniment of his choice of person and as such, the contractual terms were modified by the overriding obligation of trust and confidence. Employers beware! However, note that this case involved potentially career threatening action by the University, hence the extension of the right to be accompanied.
4. Scotland to abolish Employment Tribunal Fees
Despite the 2014 referendum vote decision, in which it was decided that Scotland would not become independent, it was held that some powers would be devolved to Scotland. One such power was the administration of the tribunal system and consequently on 1 September, the Scottish Government announced its intention to abolish employment tribunal fees.
Since the introduction of tribunal fees, there has been a marked decline in the number of tribunal applications. It is anticipated that there will be an increase in the number of claims being brought in Scotland once fees are abolished there, so called 'forum shopping.'
Because Scotland will be a more favourable place to bring employment proceedings, there is an increased possibility that claims will be presented in Scotland if:
- the act/s complained of took place in Scotland; or
- if the employer has a place of business in Scotland.
This will not only increase the scope of employees who will now want to bring a claim, but is also likely to further reduce the number of claims that will be heard in England. There will be inevitable cost implications for employers both sides of the border.
5. Travelling time counts as working time
The recent Court of Justice of the European Union decision of Federacion de Servicios Privados v Tyco Integrated Security has ruled that time spent travelling from and to home by mobile employees, who do not have a 'fixed or habitual place of work,' should count towards time worked under the Working Time Directive.
Employers with mobile workers will need to make sure that they are complying with the Regulations, such as ensuring workers have daily rest and do not work over 48 hours per week (averaged over a 17 week reference period) if they have not signed an opt-out agreement. The decision could also have implications for employers who pay their employees the National Minimum Wage. Such employers may need to increase their employees' pay because they will now be working more hours in a day so their average hourly rate will be reduced.
This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.