Handy reminder: 8 key employment law changes to be aware of for spring 2018

Spring is always a key time of year for changes in employment law, and 2018 is no exception. Here’s my summary of the important updates you need to be aware of:

1. Increases to statutory redundancy payments

It can be easy to miss this one – the limit on a week’s pay increases on 6 April each year, and this year has risen from £489 to £508. For any redundancies that take effect on or after 6 April you will need to use the new figures.

The Government’s easy-to-use statutory redundancy calculator can be found at https://www.gov.uk/calculate-your-redundancy-pay.

2. Increases to SSP, SMP and other family-related leave payments

As with statutory redundancy, April is the month when these payments change. Since 6 April the SSP rate is now £92.05 per week, and for statutory maternity, paternity, adoption and shared parental pay, the rate has increased to £145.18 for pay weeks commencing on or after 1 April 2018.

3. Gender pay reporting

As you will be aware from our previous articles, any organisations caught by the gender pay reporting regulations were required to publish their reports by 4 April 2018. At the time of writing there are still many employers who haven’t submitted a report via the Government’s website as required. In addition, some of those who have published reports have included mathematically impossible information! If you haven’t done yours yet, or if yours is inaccurate, you are not alone – but in terms of getting it submitted and correct it is definitely better late than never!

4. Changes to taxation of termination payments

Again, hopefully this will not be a surprise to regular readers of our ebulletins, as we have covered this in our previous articles. In summary, an important change to the law on the taxation of termination payments took effect on 6 April 2018, meaning that all payments in lieu of notice must be taxed, regardless of whether there is a payment in lieu of notice clause in the employee’s contract.

However, there was a previous proposal to introduce of employer national insurance contributions on termination payments in excess of £30,000 which is now not taking effect until 6 April 2019.

5. Increases to National Minimum Wage rates

The National Minimum Wage and National Living Wage rates all increased from 1 April as follows:

Apprentices £3.70
Workers under 18 (but above compulsory school age) £4.20
Workers aged 18 to 20 £5.90
Workers aged 21 to 24 £7.38
Workers aged 25 and over £7.83

6. Increase to Tribunal awards

The basic award in unfair dismissal cases is calculated in the same way as the statutory redundancy payment, and therefore as stated above, the week’s pay limit is increased to £508 in the same way for dismissals where the effective date of termination is on or after 6 April.

The compensatory award limit also increases from 6 April and is now £83,682 (or 52 weeks’ gross pay, whichever is the lower).

The limit does not apply if the unfair dismissal was related to whistleblowing or carrying out health and safety activities.

7. Increase to auto-enrolment contributions

For most employers, an increase applies this month so that you will need to contribute more to your employees’ pension. The rates are as follows:

Date  Employer contribution Employee contribution Total contribution
Until 5 April 2018 1% 1% 2%
6 April 2018 to 5 April 2019 2% 3% 5%
6 April 2019 onwards 3% 5% 8%

The staff contribution rate may vary depending on the type of tax relief applied by the scheme. If in doubt please speak to your pension adviser.

8. Preparation for GDPR

And last but by no means least, employers need to be getting ready for the General Data Protection Regulation (GDPR) which takes effect on 25 May 2018. The new law is attracting a lot of attention, so I’m sure you won’t have managed to miss this one! You’ll be pleased to know you won’t find any scaremongering from us, but it is definitely something you need to be aware of – our previous article on the subject can be found here. If you need any sensible, pragmatic assistance with the employment aspects of GDPR, please do get in touch.

 

f you would like to talk through a situation you are dealing with, or if you need advice on any aspect of employment law, please contact any member of the Pure Employment Law team (01243 836840 or [email protected]).

Please note that this update is not intended to be exhaustive or be a substitute for legal advice. The application of the law in this area will often depend upon the specific facts and you are advised to seek specific advice on any given scenario.

 

Share and share alike – should fathers taking shared parental leave be paid the same as mothers on maternity leave?

We previously reported on two cases in which the Employment Tribunal reached different conclusions as to whether paying enhanced pay to women on maternity leave, but only paying statutory pay to men taking shared parental leave, was discriminatory on the grounds of sex. (For a recap on shared parental leave, click here).

Both cases were appealed to the Employment Appeal Tribunal (EAT), and the outcome of one of them has now been released (the other case was heard in January, and we are still awaiting the outcome).

In Capita Customer Management Ltd v 1) Mr M Ali and 2) Working Families (2017), the EAT has ruled that it is not direct sex discrimination to pay enhanced maternity pay whilst only offering statutory shared parental leave pay. This is because, the EAT said, the situation of a father taking shared parental leave was not comparable to that of a mother taking maternity leave. Maternity leave and shared parental leave serve different purposes – maternity leave is given to enable the mother to take leave for her own health and wellbeing, whereas shared parental leave is for parents of either sex to take leave to care for their child.

The correct comparator for Mr Ali was a woman taking shared parental leave. As he would have been offered shared parental leave and pay on the same terms as a woman taking shared parental leave, there was no discrimination.

It is possible that this case could be appealed further, and we will keep you up to date on any developments.

In the meantime, this case means that employers can offer enhanced maternity pay to mothers, without being seen to be discriminating against fathers (provided that shared parental leave is offered to men or women on equal terms).

It is worth noting, however, that the decision in the Ali case is relevant only to the first 14 weeks after birth (being the minimum period of maternity leave required under EU law, to ensure for the health and safety of the mother). The EAT did allude to the fact that a case brought on different facts i.e. after the period of 26 weeks’ ordinary maternity leave (as provided under the UK’s Maternity and Parental Leave Regulations) could be decided differently, if it were found that the purpose of maternity leave after the 26 week period may no longer be the mother’s recovery from childbirth/special bonding period between mother and child.

If you would like to talk through a situation you are dealing with, or if you need advice on any aspect of employment law, please contact any member of the Pure Employment Law team (01243 836840 or [email protected]).

Please note that this update is not intended to be exhaustive or be a substitute for legal advice. The application of the law in this area will often depend upon the specific facts and you are advised to seek specific advice on any given scenario.

When does notice take effect?

The Supreme Court recently considered the question of when notice of termination given to an employee takes effect. Is it when the notice was sent, when it was delivered to the employee’s address, or when the employee had a reasonable opportunity to read it? This was the question before them in Newcastle upon Tyne NHS Foundation Trust v Haywood (2018).

Mrs Haywood was told in April 2011 that she was at risk of redundancy, and on 20 April 2011 she was sent notice of termination by recorded delivery to her home address. However, Mrs Haywood had gone on holiday on 19 April 2011, and therefore did not read the notice of termination until her return on 27 April 2011. She was entitled to 12 weeks’ notice, so the question was when did her employment actually terminate?

On the face of it, the difference could only be about a week – and usually it is hardly worth either party taking the matter to the Supreme Court for the sake of a week’s pay! However, Mrs Haywood turned 50 on 20 July 2011, and if she was aged over 50 on the date her employment terminated she would be entitled to a much more generous pension.

The Supreme Court held that the notice of termination was effective only when the notice had been delivered, and the employee had a reasonable opportunity to read it, so in this case on Mrs Haywood’s return from holiday on 27 April 2011. This is consistent with earlier decisions on the same point.

This situation does, however, leave employers with a problem in situations when they cannot contact the employee. Over the years we have advised on a number of occasions when employees have simply disappeared – quite often they have gone on holiday to their home country, and simply not returned or left a forwarding address. The employee often considers that they have left that employment, but that is not strictly right. Employers sometimes try to argue that the employee has “constructively resigned” by not attending work or keeping in touch, but the courts have rejected this approach. In law, they remain employees until such time as their employment is terminated, either by their resignation, or by the employer dismissing. In practical terms this will normally not be an issue as the employee never returns, but in theory they would still be employed and entitled to accrue holiday etc. and employers understandably want to avoid being left in limbo.

The rule that notice is only served when it is delivered and the employee has a reasonable opportunity to read it can also be used to advantage. Some years ago, I was advising a senior employee who was entitled to a bonus of about $250,000 after he had completed 1 year’s employment. He was concerned that his American employers would try to avoid paying this by dismissing him just before the year was up. The anniversary of his employment fell on a Sunday, and he was convinced that his employer would email him to dismiss him over the weekend. This was in the halcyon days when mobile phones were simply phones and did not receive emails, and I advised him not to log on to his emails over the weekend as he was not working. He took my advice. He the logged in on the Monday, and sure enough there was an email which had been sent late on Friday (our time) purporting to terminate his employment with immediate effect. We successfully argued that the notice was only valid from the Monday and eventually his employer conceded and paid him his bonus.

The question of when notice was served may seem a bit of an academic point, but it can be very significant in its effect. If employers want more certainty, then they can put a provision in their contracts of employment which state when notice is deemed to be served, but there is no certainty that these would stand up to challenge if the employee did not actually receive and read the notice.

If you would like to talk through a situation you are dealing with, or if you need advice on any aspect of employment law, please contact any member of the Pure Employment Law team (01243 836840 or [email protected]).

Please note that this update is not intended to be exhaustive or be a substitute for legal advice. The application of the law in this area will often depend upon the specific facts and you are advised to seek specific advice on any given scenario.

 

LEGAL INFORMATION

Pure Employment Law | 1 Little London, Chichester, West Sussex, PO19 1PH
[email protected] | Tel: 01243 836840

Pure Employment Law is the trading name of Pure Employment Law Limited, registered in England and Wales with company number 07134294 and whose registered office is 1 Little London, Chichester, West Sussex, PO19 1PH. Pure Employment Law Limited is authorised and regulated by the Solicitors Regulation Authority with registration number 533794. A list of the company’s directors is available for inspection at the registered office

DISCLAIMER

The information contained in this website is for general information purposes only. The information is provided by Pure Employment Law and while we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.