News & Views

Employment law: what to expect in 2016

BY Fiona McBeath
Employment law
BG Purple

Christmas is a distant memory and the biting cold of January has well settled in. It’s a time of tightening the belt and sticking to those New Year’s resolutions for as long as possible. But it's also the time when we reflect on the year gone by and look forward to what 2016 will bring. 

2015 saw the Government continue to press ahead with its review of employment legislation bringing a number of changes designed to reduce red tape on employers and create more modern, flexible workplaces. 2016 promises to bring fresh changes as the Government introduces further reforms. Here’s a brief overview of what to expect: 

Zero hours contracts: the Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015 came into force on 11 January 2016. The Regulations provide a remedy for zero hours workers against employers who include exclusivity clauses in their contracts of employment. The Regulations give zero hours employees the right not to be unfairly dismissed and zero hours employees and workers the right to not be subjected to a detriment for failing to comply with an exclusivity clause.  

National Living Wage: on 1st April 2016 the new National Living Wage will come into effect, increasing the minimum wage for over 25s to £7.20 per hour, rising to £9 per hour by 2020. The NLW is effectively a rebranding of the National Minimum Wage, so the existing NMW scheme rules will remain in place come April. The change to the rate of pay is set out in Regulation 4A of the NMW Regulations and is applicable to over 25s (the existing NMW rates remain in force for those under 25). In addition the NMW Act 1998 has been amended to double the financial penalty for employers who fail to pay the correct rate from 100% to 200% of the underpayment due to each worker.

Gender pay gap reporting: the Equality Act 2010 contains a power for the UK Government to make regulations requiring companies with more than 250 staff to publish details of their gender pay gap. Until now, these powers have not been used and a voluntary reporting approach has been favoured by the Government. However, the Government has confirmed it will introduce legislation in early 2016 setting out new rules on reporting. If you are concerned about how to carry out gender pay gap reporting in your organisation, speak to our Senior HR Projects Manager, Stephanie (stephanie.harper@lawatwork.co.uk), about how we can help.

Changes to strike laws:  The controversial Trade Union Bill is currently making its way through parliament and is expected to be passed in the first half of 2016. Under the Bill, trade unions would have to secure the support for a strike of more than 50% of those entitled to vote, as opposed to a straight majority of those who actually vote. There has been an unprecedented response to the Bill by Scottish Councils, all 32 of which have confirmed that they will refuse to implement all of the Bill’s provisions when it becomes law. 

Devolution of Scottish ETs: following the recommendations of the Smith Commission, the UK Government proposes to devolve control of the Employment Tribunal north of the border to the Scottish Government. At present, the Employment Tribunal and Employment Appeal Tribunal system is broadly the same in Scotland and the rest of the UK; however, that could change drastically in the future. The current draft wording of the legislation sets out that the Scottish ET will have jurisdiction to hear “Scottish” cases, ie. those where the Respondent carries out business in Scotland, the incident complained of happened in Scotland, and the Claimant’s contract requires him or her to work wholly in Scotland.

Tribunal fees: Fees were introduced to the Employment Tribunal system in 2013, with Claimants currently having to pay up to £1,200 to have their case heard. There are several potential challenges on the horizon. Unison, who has challenged the fee regime several times in the courts, has been given leave for a further appeal. In addition, two reviews are being carried out into the regime; one by the UK government through the Ministry of Justice and the other by an independent parliamentary inquiry. The results will be released later in the year. Quite separately, the Scottish Government has indicated that it would abolish or reduce fees if it had control of the tribunal system. ET devolution could result in “forum shopping” whereby claimants from the rest of the UK could choose to raise claims in Scotland in order to avoid fees (subject to rules on “Scottish cases”).

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