Despite the stated aim of the Government to cut red tape for business, one cannot help but look back over 2014 and wonder whether this was no more than aspirational given some of the changes introduced this year.
In 2014, we saw the introduction of new rules in the Employment Tribunals that Claimants have to comply with before their claim may proceed, complex Shared Parental Leave Regulations that came into force on 1 December, and the power for Employment Tribunals to order equal pay audits (see More changes – new law).
Even the courts have not been quiet. The recent judgments on the calculation of holiday pay have created considerable uncertainty as to what should be included in the calculation of holiday and the period over which holiday pay should be calculated.
Some may ask whether 2015 will be any different. The short answer is no. New legislation will start to bed in and we can also expect to see rulings in Europe on the long running collective redundancy consultation cases, as well as decisions on the new fees regime in the Employment Tribunals and the unfair dismissal compensation cap. And, of course, we have the General Election in May 2015!
So, as you head off for the festivities and eating fest that Christmas means for many of us, you might want to use up a few calories thinking about what some of these significant employment law changes may mean to your business in 2015 and where to place them on your New Year’s Resolution list.
Bonus caps and claw backs for financial institutions
Following the publication of the Advocate General’s opinion that the UK’s challenge to the bonus cap provisions of the Capital Requirements Directive should be rejected, the Government has announced that it is dropping its challenge. The first bonuses to be affected by the new regime will be those paid on or after 1 January 2015 in respect of performance in the 2014 calendar year.
If employers have not already planned for this, they could well be up against time in ensuring that they comply with the revised rules set out in Chapter 19A of the Senior Management Arrangements Systems and Controls sourcebook (SYSC).
Revised rules on clawback will also apply to awards made from 1 January 2015, and further changes are proposed in relation to malus provisions, buy-outs and the deferral and vesting periods for variable pay.
Collective redundancy consultation
USDAW has also announced that the Advocate General will publish an opinion on 5 February 2014 in the case of USDAW v Ethel Austin Ltd (in administration) and another – more commonly known as the Woolworths case.
Readers of this blog will recollect that the Employment Appeal Tribunal (EAT) ruled that the words “at one establishment” in the statute governing collective redundancies are to be disregarded (see Retail administrations, collective redundancies and protective awards). The effect of this was that employees working in Woolworths stores where fewer than 20 employees were employed had the right to be collectively consulted when the decision was made by the administrators to close stores and make employees redundant.
A Northern Ireland case and a Spanish case on the same issue were also referred to the ECJ which will be looking at the construction of the EU Collective Redundancies Directive, including the meaning of “establishment” and whether the Directive has direct effect.
While opinions of the Advocate General (AG) are not binding on the ECJ, rarely has the court ignored the opinion of the AG. It will take many months for the ECJ’s judgment to come through but the opinion will give a flavour of what employers should expect.
Family friendly legislation
The new Shared Parental Leave regulations came into force on 1 December 2014. If you have not already introduced a shared parental leave policy then this should be number 1 on your New Year Resolution list.
It may not be obvious to many employers that they already have parents who qualify for the new rights (such as fathers, same sex partners or adoptive parents) who may not yet have disclosed their intentions.
Unite has now stated that it will not be appealing the judgment of the EAT in the co-joined appeals in Bear Scotland. That means that the determination of the EAT on the question of limiting the period over which claims may be backdated where there has been a 3 month gap in under-payments will, for the time being, be the clearest statement of the law.
There is, however, still litigation pending, and there are other cases concerning holiday pay, which may eventually provide further guidance and clarity on some of the other issues, such as the reference period for calculating holiday pay, and whether or not payments other than overtime or commission should be payable during holidays.
We will keep readers updated on any developments in this area, but employers should make sure that they understand the potential liability they have for arrears and put in place changes that will reduce the risk of any future claims for arrears of pay (see Overtime to be included in holiday pay calculations).
National Minimum Wage (NMW)
As part of the ‘Red Tape Challenge’ Vince Cable in November 2011 announced that the NMW regulations should be simplified by “merging the current body of 17 different regulations into a single consolidated set, and complementing the work the Low Pay Commission is already doing to streamline the regime”. In July 2014 a draft set of Regulations were published and went out to consultation and this closed on 15 September 2014. The new Regulations also contain an increased maximum financial penalty from £5,000 to £20,000 for employers who fail to pay the NMW.
The regulations are dependent upon the Small Business Enterprise and Employment Bill 2014-15 being enacted. The second reading of this bill took place on 2 December 2014 and the committee stages of the Bill will take place in February 2014. It is not expected that the new Regulations will be in force before the General Election in May. The anticipated commencement date is October 2015.
Zero hours contracts
While zero hours contracts continue to attract media attention, and there was much talk of comprehensive reform, the only change that is proposed for such contracts is that in 2015 there will be a ban on exclusivity in zero hours contracts. This is again something that is dependent on the Small Business, Enterprise and Employment Bill 2014-2015 being enacted.