What’s on the horizon for HR and employment law in 2018?

Gender pay gap reporting goes live! – April 2018

The Gender Pay Gap Regulations are now in force. The first gender pay gap reports for the private and voluntary sector employers must be published no later than 4 April 2018. For the public sector, this deadline is 30 March 2018. Public authorities must also publish information demonstrating compliance with the public sector equality duty by the same date.

The Regulations require employers that employ 250 employees or more to publish annual reports clearly setting out the organisations

(i) gender pay

(ii) gender bonus gap

(iii) the proportion of males and females receiving a bonus and

(iv) the proportion of males and females in each quartile band.

The results are accessible by staff and the public and can often lead to the misunderstanding that a gender pay gap is the same as an equal pay problem. Clear communication for the reasons behind a gap will, therefore, be key. 

Employers must upload reports to their website and the dedicated Government gender pay website, which you can find here.

For further information on Gender Pay reporting, see our previous briefing.

Termination payment and PILON reforms – April 2018

Until now, the tax treatment of a payment in lieu of notice (PILON) depends largely on whether there is a contractual right for the employer to make a PILON (or whether making a PILON has become a custom and practice for the employing organisation).  

From 6 April 2018, all PILONs will be treated as earnings (and therefore taxable) under the Government’s initiative to “tighten and clarify” the tax treatment of termination payments.

An employee’s termination payment will continue to be split into two types of payment: payments that can still benefit from the £30,000 tax-free threshold (such as statutory redundancy payments) and those that cannot. Where an employee has not or does not work their notice period, it requires the employer to identify the amount of basic pay that the employee would have received if they had worked their full notice period, i.e. even if the employee leaves employment part way through their notice period. The amount will be treated as earnings and will be subject to the usual tax and national insurance deductions.  

This could be significant for employers in consideration termination packages.

General Data Protection Regulations (GDPR) – May 2018

On 25 May 2018 the General Data Protection Regulations will come into force. GDPR will make changes to the way in which organisations control or process personal data. At the outset, employers will need to review their data protection policies to ensure that they are compliant with GDPR, particularly where personal data is being handled and processed. They will also need to ensure that employees are aware of GDPR and its implications.

For further information on GDPR, see our previous briefing here.

Gig Economy and zero-hour workers June 2018

On 7 February 2018, the Government published its response to the Taylor Review on Modern Working Practices, which covers a wide range of issues relating to a-typical working. The Review concluded that too many employers are still relying on zero-hours contracts and recommended:

• A higher rate of National Minimum Wage for hours not guaranteed by the individual’s contract; and
• Zero-hours workers should have the right to request a contract with guaranteed hours after 12 months.

The Government accepted the majority of the review’s recommendations in this area, and further legislation is expected to implement these changes.

Specifically, in relation to the gig economy, a consultation is taking place regarding employment status. The consultation closes on 1 June 2018. The area of the “gig economy” will be heavily influenced by the case of Uber BV v Aslam and others (UKEAT/0056/17) in which it was decided that Uber’s drivers are employed as ‘workers’ for the purposes of employment law.

However, it is notable that Uber is appealing this decision and is due to be heard by the Court of Appeal by 20 November 2018. The employment status of those working in the gig economy is likely to continue to be a hot topic throughout 2018 and beyond.

We also await the imminent judgment in the case of the Supreme Court in the case of Pimlico Plumbers Ltd v Smith, to decide whether the Court of Appeal was correct to regard the status of apparently “freelance” plumbers as “workers”.

Holiday Pay March and November 2018

There are two cases due to be heard this year regarding the calculation of holiday pay.

The European Court of Justice heard the case of King v The Sash Window Workshop Limited and another in November 2017. It held that a worker is entitled to be paid on termination for any periods of annual leave that have accrued during employment, where the worker has been discouraged from taking that leave because it would have been unpaid. It was not an effective remedy for the worker to have to take leave then sue for holiday pay. There was no limitation on the amount of leave that could be carried over in this type of case. (See our previous briefing on the ECJ decision here). This case is to be heard in the Court of Appeal in late November 2018 regarding whether the ECJ’s judgement can be interpreted consistently with the Working Time Regulations 1998.

Similarly, the case of Shannon v Rampersad t/a Clifton House Residential Home will be heard on 20 March 2018 in the Court of Appeal. It will decide whether or not the employee was entitled to holiday pay where it was not taken in the year before dismissal, but it was within the employee’s control to do so.

Increases in current pay and compensation limits

From 6 April 2018 the following increases will apply:

• increase in the limit of a week’s pay from £489 to £508,
• increase in the limit of compensation for an unfair dismissal claim from £80,541 to £83,682.

Increases to National Living Wage and National Minimum Wage

From 1 April 2018, the following increases to the National Minimum Wage will apply:

Change to payslips – one for your radar

From 6 April 2019, where an employee receives a different rate of pay for different types of work, their payslip will need to separate the total number of hours worked and paid for at different rates of pay (or for different types of work). Though this date seems some way off, employers may wish to consider how they begin to implement these changes with payroll ahead of 6 April 2019.

For more information

If you require assistance with your working arrangements, please get in touch with your usual contact in our Employment Team or speak to Kate Watkins. You can find out more about our employment and data protection work on our website.

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