Employment Law Update: September 2014
The new school term often brings a flurry of activity for the employment solicitors and the HR professionals amongst us; the now inevitable changes to the law that occur every October are on the horizon, and the legal world has had the opportunity to take stock of any developments over the hot summer months.
With that in mind, we have prepared a summary of the things you need to know for this October, and a run-down on the latest position on a couple of those key issues that have been racking up column inches over the summer months:
Equal pay
On 1 October 2014, the Equality Act (Equal Pay Audits) Regulations 2014 come into force. This means that, where an Employment Tribunal finds that an employer is in breach of equal pay law, they must order the employer to conduct a mandatory equal pay audit, the scope of which to be determined by the Employment Tribunal.
National Minimum Wage
On 1 October 2014, the National Minimum Wage hourly rates will increase:
- For those aged 21+, from £6.31 to £6.50 per hour; •For those aged 18-20(inclusive), from £5.03 to £5.13 per hour; •For individuals aged under 18, but above compulsory school leaving age, from £3.72 to £3.79; and •For apprentices aged under 19, or over 19 but in the first year of their apprenticeship, from £2.68 to £2.73 per hour.
Ante-natal Appointments
From 1 October 2014, fathers and partners will be entitled to take unpaid time off to accompany their partners to up to two ante-natal appointments, and will be protected from being subjected to any detriment or being dismissed for doing so.
This is the first in a suite of upcoming changes ahead of the right to Shared Parental Leave coming into force next year, which is the largest shake-up in the family leave arena for some time.
Zero Hours Contracts
It won’t have escaped many of you that zero hours contracts are a hot topic at the moment. Following formal government consultation (and a media storm surrounding these types of agreement), the government has now formulated its proposals for reform.
The Small Business, Enterprise and Employment Bill (published in June 2014) provides, for the first time, a statutory definition as to what a zero hours contract is. The lack of clarity had caused problems with employment status, so the definition is welcome.
The Bill will also seek to make exclusivity clauses in zero hours contracts unenforceable, meaning that employers will be unable to prevent in saccompany theidividuals engaged on zero hours contracts from working elsewhere. Government consultation has already begun on how to tackle avoidance measures dreamed up to work around the ban on exclusivity clauses.
The Bill is expected to come into force (along with a statutory code of practice) in early 2015.
Holiday pay
Another topic attracting attention is the issue of holiday pay. It all kicked off with the case of Williams v British Airways (remember that?) when pilots claimed they should receive flying supplements whilst on holiday. The European Court of Justice agreed and said that employees should receive payment “intrinsically linked to the performance of tasks” in their holiday pay.
Three UK claims then followed, querying whether overtime and incentive bonuses should be included in holiday pay. The Employment Tribunal initially said yes. The appeals on those decisions have recently been heard at the Employment Appeal Tribunal and a ruling is expected soon.
Most recently is the European Court of Justice case of Lock v British Gas Trading Limited. In that case it was held that, in some situations, commission payments must be included in holiday pay calculations too. That case is now likely to be sent back to the Employment Tribunal in England for its decision.
At the moment, the law in England remains unclear (except if you are a public authority, in which case you are in a slightly different position). The decision of the Employment Appeal Tribunal (and the remitted decision in the Lock case) of company thei is waited with baited breath, as a decision that could change the landscape of holiday pay in the UK – potentially overtime, commission, and bonuses may need to be considered when calculating holiday pay.
The Trade Unions are apparently drumming up potential claimants for holiday cases, so it is safe to assume that this is an issue that will be around for a while. Some employers are acting now to reduce any liabilities that might come following this latest round of cases, whilst some are simply doing nothing at the moment, waiting to see what the outcome is. What is clear is that, at some point, the law is likely to change, and will become more certain, on what exactly should be included when calculating holiday pay. That change in law could potentially be costly for employers, both looking backwards at holiday payments already made, and forward to future payments. Keep an eye out for updates on this point…
For more information on any of the topics in this article, please contact a member of the Employment team on 01603 281139.
Note: The content of this article is for general information only and does not constitute legal advice. Specific legal advice should be taken in any specific circumstance.