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Employment law issues to watch out for in 2016

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Last year the government announced a raft of employment law reforms set to come into force in 2016.

From childcare to counter extremism measures, Harrison Drury’s Employment team explains some of the wide ranging changes you need to be aware of.

1. New childcare benefits and consultation for carers

A consultation is expected this year regarding the government’s proposals for working grandparents to take shared parental leave to care for their grandchildren. The government is also proposing 30 hours of free childcare for parents of children aged between three and four. In addition to this, the European Commission is consulting on the challenges to work-life balance faced by carers with the consultation set to close on February 17 2016.

2. Reporting of gender pay

On March 26 2016, regulations are to be introduced making it compulsory for organisations with 250 or more employees to disclose information about the pay differences between men and women. Further details are still to be released regarding these changes such as the types of information to be disclosed and where it will be published.

3. Introduction of the National Living Wage

April 1 2016 will see the introduction of a National Living Wage for low paid workers aged 25 and over. The National Living Wage effectively raises the top level of the current national minimum wage to an initial rate of £7.20. The penalty for failing to pay staff the correct minimum wage is also set to be doubled. Currently a firm is fined 100 per cent of arrears for non-payment of the minimum wage but that will double to 200 per cent when the National Living Wage comes in to force, with a maximum fine of £20,000.

4. Public sector exit payments

When public sector employees leave their job, new rules are to be introduced regarding exit payments. First of all, exit payments will be capped at £95,000; however the implementation date for this change is yet to be announced. In addition to this, if a public sector employee earns £100,000 or more they will be required to repay any exit payments if they return to work in the same sector that they worked previously within a period of 12 months. This change is set to take place on April 1 2016.

5. Tax on termination payments?

The Office for Tax and Simplification (OTS) held a consultation in October wherein they suggested that some, or all, termination payments should be taxable, with some limited exemptions. Termination payments are severance payments to employees on termination of their employment. They can arise in a number of situations including where an employee is dismissed, made redundant or retires. Currently, non-contractual termination payments under £30,000 are tax free.

6. Counter-Extremism Bill

The Government recently announced that they propose to introduce a Counter-Extremism Bill. The bill will enable employers to lawfully monitor employees to assess whether they are an “extremist”. There are little details available from the government at present such as how “extremist” will be defined and how the legislation will co-exist with current data protection laws.

7. Trade Union Bill

The Trade Union Bill intends to reform the laws applying to trade unions. In particular, the legislation is looking to place more stringent requirements on unions before they are able to take strike action. The key features include the introduction of a new voting threshold to make strike action less likely and a higher vote proportion requirement for strikes involving those working in “important public sectors” including health and transport. The legislation is also looking to set a four month limit for strike action and will increase the amount of notice that is to be given to an employer before industrial action can take place.

8. Protection of ‘apprenticeships’

The government intends to ban organisations from using the term “apprenticeship” where the scheme is not a statutory apprenticeship. They are concerned that some employers may use the term “apprenticeship” in respect of lower quality courses that do not meet the same high standards as statutory apprenticeships in an effort to make them appear more attractive. This measure is expected to form part of the government’s Enterprise Bill.

9. Foreign workers

The Immigration Bill will introduce various changes to the laws surrounding foreign workers. For example, all public facing employees in the public sector will be required to speak fluent English, a skills charge will be introduced for employers that engage foreign workers and a new offence of illegal working will be created. This will mean that those who work illegally in England and Wales could face up to six months in prison and the police will be given the power to seize wages as “proceeds of crime”. Under the bill, it would also become an offence for businesses and recruitment agencies to hire abroad without first advertising in the UK.

For more information on how any of these employment law issues might affect your business, contact Harrison Drury’s Employment team on 01772 258321.

Find out more about HR Compass, Harrison Drury’s specialist employment law product. HR Compass comprises three core components designed to offer seamless financial and business continuity protection for businesses. These include an employment law health check, expert fixed-fee employment law advice and an insurance policy to protect against the cost of employment claims.


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