UK Labor Update: What’s Coming Up in Employment Law in 2018?

A new year means new legal and policy developments. In this article, we set out a summary of some key employment law changes and dates for your diaries in 2018.  

30 March 2018 – Gender pay gap reporting for public sector employers

Public sector employers will also need to publish their GPG reports (containing results from calculations done as at snapshot date of 31 March 2017) but by a slightly earlier date.  Public sector organizations will also need to undertake the six specific calculations. 

4 April 2018 – Gender pay gap reporting for private sector employers

Private sector employers must publish their first reports by this date (containing results from calculations done as at the “snapshot date” of 5 April 2017). This new compulsory requirement is set out in the Equality Act 2010 (Gender Pay Gap Regulations) Regulations 2017 (“the Regulations”).

The Regulations require affected employers to publish six calculations, including the overall gender pay gap that is the difference between male and female average hourly pay. The prescribed information must then be uploaded to the employer’s website and retained there for at least three years. It must also be uploaded to the government’s designated website. Careful PR management will be required if a gender pay gap is revealed, but also it is worth noting that obtaining this pay information is an opportunity for employers to make positive changes to both workforce and pay structures. 

Potential consequences of non-compliance include action being taken by the EHRC and/or reputational damage, so we recommend that affected employers do take their reporting obligations seriously. 

April 2018 – New statutory rates  

New statutory rates will also apply from April 2018. The National Living Wage for workers aged 25 and over will increase to £7.83 per hour. Statutory Sick Pay will increase to £92.05 per week and Statutory Maternity Pay, Shared Parental Leave and Shared Adoption Pay will increase to £145.18 per week. 

06 April 2018 – Taxation on termination payments 

The taxation of termination payments will change for payments made on or after 6 April 2018. The changes will amend the UK tax treatment of non-contractual payments in lieu of notice (“PILONs”). Currently, these can be paid as a damages payment and therefore exempt from tax and NICs. HMRC are looking to clamp down on this. Broadly speaking, the changes mean that the amount of salary that the terminated employee would have received had they worked their notice period will be subject to Income Tax and NICs in full as if such payments were general earnings. This will bring the treatment of non-contractual PILON payments in line with the current treatment for contractual PILONs. 

25 May 2018 – General Data Protection Regulation

Arguably this is the biggest change for this year or, at least the change requiring the most preparatory work! The existing data protection laws in the UK are being overhauled and replaced with stricter rules deriving from the EU’s General Data Protection Regulation,  (“GDPR”) in force from 25 May 2018. This EU Regulation will be directly applicable to the UK and even after the UK leaves the EU, compatible rules will be incorporated into new UK legislation to enable a harmonized approach with EU states (intended to promote business efficacy and a coordinated approach to the treatment of personal data for individuals living in Europe). 

Employers that either control or process data (or both) will need to ensure that they have laid the groundwork for an effective GDPR regime well before the 25 May 2018. In our view, this will entail taking numerous steps including training for senior decision makers about the new approach to processing under the GDPR; raising awareness about the  potential effects of non-compliance (including increased fines); audits of current data processing activities and implementing GDPR-compatible systems or processes where required and reviewing the lawful bases on which data is processed.

It is worth noting that where consent is currently relied on as a lawful basis for data processing, this may need to be renewed, to meet the stricter consent requirements. Consent will be harder to obtain and revocable at any time under the new regime and therefore our advice is to consider other justifications for processing data. This may entail variation of employment contracts, amongst other things. 

If your organization has not started preparations in readiness for May, the clock really is now ticking and this issue should be at the top of your agenda!

Gig Economy

It looks as though this highly publicised issue will continue into 2018. At the tail-end of last year, on 20 November 2017, the House of Commons Work and Pensions and BEIS Select Committees published a Report accompanied by draft legislation encouraging the government to build on and enact many of the earlier recommendations in the Taylor Review. In particular, the Committees’ Report includes a recommendation for a rebuttable presumption of “worker” status. A determination of worker status is significant as it will entitle an individual to an array of rights such as holiday pay, pensions, the NMW/NLW, numerous working time protections (rest breaks, maximum working weekly hours etc.), the right not be discriminated against, protection from unlawful deductions from wages and the right to bring a claim for unfair dismissal (where the criteria are met).  

There is skepticism that the proposed legislation will come to fruition in the near future, although the Report does suggest that this issue is firmly on the parliamentary agenda. We can also expect more high profile litigation in the courts this year, including the continued Pimlico Plumbers litigation which is listed for an appeal hearing in the Supreme Court on 20 February 2018. Employers should, therefore, watch this space carefully for developments as the year progresses.  

New Acas guidance – Pregnancy and maternity discrimination 

You may be aware of the new guidance published by Acas in November last year. This was published as following its receipt of 14,000 calls about pregnancy and maternity discrimination in the last year alone (a 10% increase from 2016). Whilst the guidance doesn’t amend the current legal position, it aims to bolster the existing protections for expectant and new mothers. In particular, Acas recommends several measures, including employer policy assurances that women who are pregnant or on maternity leave, will not be dismissed as a result and steps to ensure that employees on maternity leave are aware of all promotion and training opportunities. 

This development is in keeping with the current trend of promoting family-friendly workplaces, offering equal opportunity for all. It also ties in with the above-mentioned new Gender Pay Gap Reporting obligations for this year. For example, the recommended measure of keeping maternity leavers informed of promotional opportunities feeds in directly to reducing gender pay gaps, which often increase following events such as maternity leave. Promoting family-friendly ways of working should, therefore, be firmly on your HR agenda for 2018. 

There are also a few changes that are thought to be further away in the pipeline, but nonetheless worth keeping tabs on for developments throughout this year. We have set these out in summary, below. 

Bereavement leave for parents 

The Parental Bereavement (Pay and Leave) Bill was introduced in the House of Commons last year and is currently still progressing through Parliament. This Bill has government support so is likely to become law but is not expected to until 2020. The proposed legislation in its current form would give the Secretary of State the power to make regulations to give employees that lose a child below the age of 18, two weeks’ leave (regardless of length of service) and at least two weeks’ statutory bereavement pay or 90% of average earnings (whichever is lower) for employees with at least 26 weeks’ service. 

Employers would need to take a cautious approach when dealing with this issue. In particular, employees making these would be protected against suffering detriment, redundancy, and unfair dismissal as a result of them taking bereavement leave. Provided this Bill becomes law, employers will need to have clear and objective policies and processes in place.  

Grandparental leave 

In 2016 the government announced plans to extend Shared Parental Leave and pay to working grandparents by 2018. The government has stalled on its consultation plans due to other priorities, namely Brexit! It is not currently known if or when this issue will be taken forward. Nonetheless, it is worth keeping your eyes peeled for developments, as this would be another legislative change in the family-friendly sphere. 

By Boyes Turner, UK, a Transatlantic Law International affiliated firm.  

For further information or for any assistance regarding UK employment law, please contact  Barry Stanton at uklabor@transatlanticlaw.com. 

Disclaimer: Transatlantic Law International Limited is a UK registered limited liability company providing international business and legal solutions through its own resources and the expertise of over 105 affiliated independent law firms in over 95 countries worldwide. This article is for background information only and provided in the context of the applicable law when published and does not constitute legal advice and cannot be relied on as such for any matter. Legal advice may be provided subject to the retention of Transatlantic Law International Limited’s services and its governing terms and conditions of service. Transatlantic Law International Limited, based at 42 Brook Street, London W1K 5DB, United Kingdom, is registered with Companies House, Reg Nr. 361484, with its registered address at 83 Cambridge Street, London SW1V 4PS, United Kingdom.