In this extended article, we are looking ahead to some of the expected developments in Employment law in 2019. There is likely to be greater scrutiny of working arrangements for temporary or zero hour workers and of the treatment of sexual harassment in the workplace. Discussions about a new Employment Tribunal fee system are also likely to continue and important Supreme Court decisions on pay for sleep in shifts, term time holiday pay calculations, the gig economy and the supermarket equal pay claims are all expected. And, who could forget, we may be leaving the EU. Brexit As the government is transposing all applicable European law into the domestic law within the UK, it is unlikely that we will see any practical legislative change to employment law arising out of the Brexit process in 2019. Longer term, it seems likely that new EU case law will remain influential in the British Courts although the interpretation of particular laws may diverge over time. Brexit is having a far greater impact on immigration law and we have providing an update on the current arrangements. Pay Gap Reporting
- Gender Pay Gap The second gender pay snapshot will take place on 5 April (31 March for public/charitable sector), with the deadline on either 30 March or 4 April 2020. Organisations should prepare for greater scrutiny of the data by staff and press to see whether improvements have been made in the last 12 months. They will also need to think very carefully about explaining any discrepancies in their narratives and how to realise improvement in their gender pay.
- Executive Pay Gap UK quoted companies with more than 250 employees will have to report on ratios between the CEO and employees’ pay and benefits during 2019. It will apply to new financial years starting on or after 1 January 2019 with the first reporting starting in 2020. Companies should begin looking at their figures and remuneration levels now with an eye to the likely press interest and social pressures that will arise from their first pay gap report.
- Ethnicity Pay Reporting The government is consulting on introducing a further pay reporting scheme for ethnicity. Although unlikely to come into force in 2019, it is likely to generate discussion this year and shine a spotlight on ethnicity pay issues. Lessons can be learned from gender pay reporting and employers should begin to consider the impact of ethnicity reporting on their organisation now and considering whether any new diversity measures should already be underway before any proposed snapshot date.
The Good Work Plan We reported in full on the proposed legislative changes before Christmas. The government's Good Work Plan proposes eight key changes to Employment law:
- A new employment status test for self-employed workers.
- A right for workers to request a fixed working pattern.
- Employers will be required to provide employees and workers with a written statement of terms and conditions on the first day of work (rather than within two months).
- The break in continuity of employment will be increased from one week currently to four weeks. This will make it easier for temporary workers to accrue the two-year qualifying service to engage unfair dismissal rights.
- For calculating a week's pay, the reference period for variable pay will increase from 12 weeks to 52 weeks. This means that holiday pay calculations should be less affected by short term variations in pay.
- Agency workers will have a simplified right to equal pay as their permanent counterpart.
- The threshold for employees to set up information and consultation arrangements will be lowered to 2% of employees, subject to the existing minimum of 15 employees.
- A ban on employers making deductions from staff tips.
#MeToo We are continuing to see the impact of the #MeToo movement in the workplace. Many companies are also now revealing how many senior employees have been dismissed for inappropriate conduct, most recently the big accountancy firms. With employees feeling more supported by society to raise concerns, the spotlight on sexual harassment in the workplace is unlikely to die down anytime soon and we are seeing a real impact on the kind of issues being dealt with by our clients. Into this mix, the government has expedited a review into the use of non-disclosure agreements in the workplace due to the concern that harassment and bullying has been covered up by so-called 'gagging clauses'. We wait to see whether the government will propose any legislative changes. The government will also be consulting this year on a mandatory duty to protect workers from sexual harassment; how best to tackle third-party harassment and the protection of interns and volunteers. We anticipate that the Equality and Human Rights Commission may publish a code of practice on sexual harassment in workplace this year. Employment Tribunal and Fees In November 2018, the Ministry of Justice stated that it was considering the reintroduction of Employment Tribunal fees, insisting that a scheme could be found which is both progressive and proportionate. There are no firm plans at the moment, however, it remains to be seen how any new fee system would be structured to overcome the stinging criticisms of the old scheme in 2017 by the Supreme Court when fees were determined to be unlawful. Key Upcoming Cases
- Calculation of Term Time Holiday Pay In May 2019, the Court of Appeal is due to consider how holiday pay should be calculated for term time employees in the case of Brazel v Harpur Trust. This case may also have implications for casual and zero hour staff across many sectors. Please see our detailed report on the EAT decision.
- NMW Sleep-ins A series of cases regarding whether the National Minimum Wage applies to all hours of sleep-in shifts, most notably brought against Mencap in Mrs Tomlinson-Blake v Royal Mencap Society, have sent shockwaves through the social care industry due to the unaffordable level of potential backpay. The most recent Court of Appeal decision decided in Mencap's favour - please see our detailed report. Unison has sought permission to appeal to the Supreme Court. If successful, the case is likely to be heard in 2019.
- Supermarket Equal Pay Claims We imminently expect a Court of Appeal decision regarding the ongoing equal pay battles brought on by predominately female supermarket workers against major supermarkets who feel they are unfairly paid less than predominately male warehouse staff, despite carrying out what they see as a similar role. The cases could have a large impact on pay in the retail sector and is likely to give useful guidance on how to compare the pay of two different groups of workers. Please see our report on the EAT decision against Asda.
- Gig Economy Worker Status Gig economy cases continued to make headlines in 2018, the most recent of which was Uber's defeat in the Court of Appeal just before Christmas. The issue in this type of case is whether individuals who work for the companies are self-employed or whether they have worker status. This determination potentially impacts tax as well as confirming that the workers are entitled to holiday pay and the National Minimum Wage. Uber has been given permission to appeal to the Supreme Court, so we are likely to receive a determinative judgment in this tricky area of law in 2019.
It's looking like 2019 is going to be very interesting for Employment law, with the largest legislative changes we have likely seen since the introduction of the Equality Act 2010, and a number of upcoming pay cases which have the potential to cost employers millions. For more information to discuss how these changes will affect you, please contact Gareth Edwards in our Employment Law team on 0117 314 5220.