ABG Employment Newsletter – January 2017

What to expect in 2017 (and beyond)

2017 looks set to be a busy year for employment law practitioners.

 

Hot topics

Brexit, with all its resulting uncertainty, will continue to dominate the employment law landscape. In the New Year, we can expect the Supreme Court’s Judgment on whether an Act of Parliament is needed to trigger Article 50 and begin the Brexit process. The Prime Minister has announced that, if permitted, the Government would trigger Article 50 before the end of March 2017.

Gender pay gap reporting, one of the key developments of the year, is due in April. Although the first gender pay gap reports for large private and voluntary sector employers will not be due until 4 April 2018, qualifying employers (with over 250 employees) will need to capture their first set of gender pay gap data in April 2017. See section 2 below for more detail.

The gig economy will continue to be a hot topic. That is, briefly, a business environment based on sharing human physical and intellectual resources and, within that, independent workers contract with organisations for short term engagements or “gigs”. We await the results of three Government and independent reviews of the changing nature of the workplace.

 

Beyond 2017

There are a number of employment law developments in the longer-term view:

The EU General Data Protection Regulation (GDPR) is not due to be implemented until 25th May 2018. However, employers may need to make substantial changes to their existing processes and will need to consider what preparatory steps will be necessary in 2017. This is particularly relevant if a company has bases across Europe.

Grandparental leave is expected to be introduced in 2018. The consultation on how to extend Shared Parental Leave and Pay to working grandparents was initially planned for May 2016, but was delayed until after the EU referendum. The Government is yet to announce further dates.

The simplification of the tax and NICs treatment of termination payments is expected in 2018. The exemption from income tax and NICs for termination payments up to the current threshold of £30,000 remains and employer NICs will be payable on payments above £30,000.

 

Final draft of Gender Pay Gap Regulations published

The final draft of the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 has been published, together with an explanatory memorandum. They will come into force on 6th April 2017, subject to parliamentary approval. A number of important changes have been made following the consultation on the previous draft published in February 2016. In particular:

  • The introduction of the concept of a “full-pay relevant employee”, primarily to exclude those on sick leave or maternity leave from the hourly pay comparison.
  • The exclusion of partners or LLP members.
  • A change in the “snapshot date” to 5th April.
  • A clearer definition of bonus pay and a requirement to publish the difference in both the mean and median bonus figures for men and women.
  • Clarification of how the quartile pay bands are to be calculated.
  • Inclusion of ex-pat employees if their employer is based in UK.

There is still no express enforcement mechanism. However the Explanatory Memorandum suggests that the EHRC’s existing enforcement powers under section 34 of the Equality Act 2010 will apply.

The first gender pay gap reports (in respect of April 2017 pay data) will be due by 4th April 2018 and must be published for three years on the employer’s website and a central government website.

For a more detailed explanation please link from here to a detailed Guidance Note on our website http://abg-law.com/guidance-notes-precedents/

 

EAT provides guidance on when work stress may be a disability, and on costs awards against impecunious parties

The EAT has upheld a Tribunal’s decision that an employee was not disabled within the meaning of the Equality Act 2010 as the employee’s stress had been a reaction to difficulties at work rather than a mental impairment, and he had failed to establish that his condition had a substantial adverse effect on his day-to-day activities.

However, the EAT held that the Tribunal had been wrong to make a costs order against the employee on the basis that it expected his financial position to improve in the future, without giving proper consideration to what his future earning capacity would be. The Tribunal had failed to consider whether it was proportionate for the employee pay all the employer’s costs, which were over £100,000, given his limited future earning capacity as a teacher. The Tribunal had failed to explain why it had not considered capping the award, or ordering that the employee pay only a proportion of the costs.

The EAT also commented that, where a party applies for costs and relies wholly or in part on the paying party’s future earning capacity, they should inform the Tribunal if they intend in the near future to serve a statutory demand on the paying party with a view to bringing bankruptcy proceedings. The debtor’s bankruptcy is likely to be of little benefit to the creditor, whereas it would have serious repercussions for the debtor.

 

Company not liable for managing director’s post-Christmas party assault on employee

The High Court has held that a company was not vicariously liable for a violent assault by an employee (its managing director) on a colleague at an “impromptu” drinking session straight after the company’s Christmas party. The drinks were separate from the Christmas party itself and at a separate location, there were employees’ partners and other guests present as well as employees, and the conversation had been largely on non-work-related topics. Neither the fact that the company was expected to pay for some or all of the drinks, nor the fact that the attack was triggered by a work-related discussion, in which the managing director felt that his authority was being challenged, were sufficient to outweigh the other factors and bring the encounter within the course of his employment. The incident had arisen in the context of “entirely voluntary and personal choices” by those present to engage in a heavy drinking session.

 

Tax-free childcare scheme (removal of childcare vouchers)

The Government plans to remove the current system of childcare vouchers and introduce a new tax-free childcare scheme under which working families will be able to claim 20% of qualifying childcare costs for children under five (and children with disabilities under 17) up to a cap of £2,000 per child per year. The scheme will be available for families in which all parents in the household are earning £50 per week, although there are exceptions. If one family member is an additional rate taxpayer, the family will not be eligible. The scheme is expected to be implemented in early 2017.

 

The comments in this note are of a general nature only. Full advice should be sought on any specific problems or issues.

Christopher Gigg cgigg@abg-law.com +44 (0)115 934 3310

Kathryn Meir kmeir@abg-law.com +44 (0!)115 934 3308