Employment law updates 2017: important changes for employers

The latest UK employment law changes for employers, HR professionals and in-house lawyers.

19 June 2017

Employment law is constantly on the move. We keep track of the latest employment law changes so you don't have to. Below you'll find our regular round-up of legislation, case updates and helpful guides. For a list of key dates for 2017, see our employment law timeline.

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Employment law updates

Update posted 16 June 2017

Redundancy following sickness absence

Charlesworth v Dransfields Engineering Services Ltd

Case: The redundancy of a disabled employee following a period of sickness absence has been held not to constitute discrimination arising from disability, even though the absence led to the company’s realisation that it could manage without the employee.

The EAT held that the employee’s absence was not the effective cause of the redundancy situation – it was simply discovered as a result of the absence caused by the disability. As the employer had already been looking to make cost savings, the redundancy situation could have been identified in other ways.

However, this decision was fact-sensitive and an employer is still required to follow a fair redundancy selection process if it is discovered that a team is overstaffed and it does not necessarily follow that the absent member of staff should be the one to made redundant.

To enhance shared parental pay or not?

Ali v Capita Customer Management Limited

Case: An employment tribunal has held that it was direct sex discrimination for an employer not to enhance shared parental pay (beyond the two weeks’ leave the employer offered on full pay) when female employees were entitled to 14 weeks’ enhanced maternity pay.

This case will be of interest to any employer who is considering whether or not to enhance shared parental pay. However, it is a first instance decision based on its own facts, is not binding and also conflicts with a previous case, so we will have to wait for a decision of an appellate court for the question to be resolved.

Article in HRnews: Annelise Tracy Phillips discusses why British fathers aren’t taking up shared parental leave, and why increasing paid paternity leave is likely to have more uptake.

Carrying forward holiday pay

King v The Sash Window Workshop

Case: The Advocate General has given an opinion that where a worker is deterred from taking his holiday entitlement because he would not be paid for it, the entitlement to paid holiday carries over into subsequent years until he has the opportunity to take it or until termination of employment (and he does not have make a request to take the holiday first).

In the Advocate General’s opinion, there is no limit on the carry over period and a worker who was never given an entitlement to paid holiday is entitled to payment in lieu for untaken holiday for the full period of employment until termination.

It remains to be seen whether the European Court of Justice (ECJ) will follow this opinion and it is interesting to note that the three month gap issue in Fulton v Bear Scotland was not considered in this case.

Pensions auto-enrolment spot checks

Since March, the Pensions Regulator has been making spot checks on employers across the UK and is looking to enforce employers' auto-enrolment duties by using its statutory powers to obtain information and enter premises.

Failure to comply with a demand for information can lead to a civil fine or criminal prosecution.

Legal updateAutomatic enrolment: The Pensions Regulator will not tolerate non-compliance

Update posted 19 May 2017

Three month gap breaks series of deductions for holiday pay

Fulton and anor v Bear Scotland Ltd

Case: The Employment Appeal Tribunal (EAT) has confirmed that a gap of more than three months in a series of deductions is sufficient to break the series for the purpose of bringing an unlawful deduction from wages claim.

The claimants had previously been successful in establishing that non-guaranteed overtime should be included in the calculation of holiday pay. However, some of their claims have been found to be out of time because a period of more than three months had elapsed between successive non-payment or underpayments of holiday pay.

This is good news for employers as it severely restricts the ability for workers to bring backdated claims; a claim will be out of time if there has been a gap of more than three months between successive underpayments.

Reasonable adjustments

The Government Legal Service v Brookes

Case: The EAT has upheld a tribunal decision that a job applicant with Asperger's syndrome was placed at a particular disadvantage and suffered indirect disability discrimination when she was required to undergo a multiple choice test as part of the first stage of a recruitment process.

The EAT was of the view that a reasonable adjustment would have been to allow her to provide short written answers and, as the employer had refused her request to do this, her claim for failure to make reasonable adjustments succeeded.

Employers who use psychometric or multiple choice tests for job applicants should therefore consider whether their recruitment procedures should allow some flexibility to make any necessary reasonable adjustments for disabled applicants.

Jurisdiction – where does an employee habitually work?

Nogueira and others v Crewlink Ltd C-168/16; Moreno Osacar v Ryanair, formerly Ryanair Ltd

Case: The Advocate General has given an opinion in an important case concerning the factors that determine the jurisdiction of an employment contract where an employee works in more than one EU member state.

In his opinion the employment contracts of cabin crew fall within the jurisdiction of the country where, or from which, the employee principally carries out his/her obligations vis-à-vis his employer.

It remains to be seen whether the ECJ will follow this opinion but it serves as a reminder that express jurisdiction clauses can be overridden by the facts.

Legal update: Employment contract jurisdiction: where does an employee habitually work?

Update posted 4 May 2017

Taxation of termination payments

Legislation: The changes to the taxation of termination payments, which were due to come into force in April 2018, have been dropped from the Finance Bill. The Bill was significantly amended in order for it to be fast-tracked through Parliament before Parliament was dissolved ahead of the forth-coming General Election on 8 June 2017.

The Bill has now received Royal Assent and become the Finance Act 2017. However, we expect that many of the provisions which were dropped, will be included in a second, post-Election, Finance Bill.

Sleeping at work

In a decision of particular significance to employers who have workers who are required to sleep on the employer’s premises, the EAT has considered the question of whether “sleep-in” time counts as “time work” for the purpose of the National Minimum Wage Regulations. 

The EAT disapproved of the cases which decided that a worker was working just by being present or “on call”. It held that each case would turn on its own facts and a number of factors needed to be considered in order to decide if the worker was working whilst present at the premises. 

These factors include the employer’s purpose for having the worker on the premises, the extent to which the worker’s activities are restricted, the degree of responsibility and the immediacy of the requirement to provide services if an emergency occurs.

Dress codes

In its response to the report, 'High heels and workplace dress codes', the government has rejected the need for a change to legislation, as it believes that the existing law is sufficient to protect women who are subjected to discriminatory dress codes. 

However, it has accepted the recommendation that there should be an awareness raising campaign and new guidance for employers to help them understand how discrimination law and health and safety law apply to workplace dress codes. This is expected in July 2017.

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