Updated: 21 April 2017
Legislation: The apprenticeship levy came into force on 6 April 2017 and the first payments are due in May 2017. All employers with a paybill in excess of £3 million must pay the levy, regardless of whether or not they employ any apprentices. The levy is set at a rate of 0.5% of the employer's gross paybill and is paid in monthly instalments via PAYE. It is an employer’s responsibility to notify HMRC each month whether they are required to pay the levy.
All employers, whether they are required to pay the levy or not, are able to access funding to cover the costs of apprentices' training (up to certain limits) and this has led to more businesses considering apprenticeship arrangements where they have not previously.
Gender pay guidance
Guide: Acas and the Government Equalities Office (GEO) have published revised final guidance on gender pay gap reporting. The guidance has been expanded to cover the obligations for both private and public sector employers and has been renamed Managing gender pay reporting (PDF).
A number of changes have been made to the guidance to help employers deal with some of the practical difficulties in determining what pay and bonuses to include in the calculations and to clarify how different workers should be treated, including partners and workers who receive no pay during the relevant pay period.
The Business, Energy and Industrial Strategy (BEIS) Select Committee inquiry into corporate governance has now published its report. The inquiry focused on three key areas: directors' duties, executive pay, and board composition.
The Committee makes a number of recommendations to make board diversity a key priority and to increase the number of women appointed to senior and executive management level positions within the FTSE 350 and listed companies. Other recommendations include the introduction of controversial pay ratio reporting and the development of a voluntary corporate governance code for the largest privately-held businesses.
The government has yet to publish the outcome of its consultation, which focuses on executive pay, employee and stakeholder voice, and large privately-held businesses. We will have to wait and see if they decide to take any of the Committee's recommendations forward.
Legal update: Corporate governance: BEIS Select Committee makes its recommendations
Updated: 10 April 2017
Key changes in April
Legislation: A number of important employment law changes come into effect in April. We have set out a summary of the key changes in our employment law timeline.
Termination of employment
Newcastle upon Tyne NHS Foundation Trust v Haywood
Case: The Court of Appeal held that, where there is no contractual provision governing when a notice of termination served by an employer takes effect, the notice only takes effect when the employee has personally taken delivery of the letter containing the notice and not when it is sent.
When terminating employment, employers should carefully consider how to deliver notice of termination and check the employment contract for any provisions about when notice will take effect. This is particularly important where, as in the Haywood case, the date of termination makes a significant difference to the employee’s entitlements upon termination.
Boxer v Excel Group Services Limited
Case:An employment tribunal has held that an Excel cycle courier was a worker, not a self-employed contractor. This particular decision is of limited significance because the relevant Excel company had gone into liquidation and therefore did not put forward any evidence.
However, it is another in a growing line of cases in which individuals purportedly engaged as self-employed contractors have been found to be workers, and it applied the recent Court of Appeal decision in Pimlico Plumbers Ltd v Smith.
Legal update: Employment status: Court of Appeal finds that "self-employed" plumber is a worker
TUPE: Employee liability information
Regulation 11 of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) requires an outgoing employer to provide certain information to an incoming employer about the employees who are expected to transfer to it under TUPE.
Born London Ltd v Spire Production Services Ltd
Case: The Employment Appeal Tribunal (EAT) has held that Regulation 11 does not require the outgoing employer to state whether particular forms of remuneration are contractual or not. Where the outgoing employer does so it is providing additional information not required by Regulation 11 and, therefore, if it incorrectly states that certain remuneration is non-contractual it is not in breach of Regulation 11
Updated: 23 March 2017
Legislation: The Finance Bill has now been published and is making its way through Parliament. It includes the proposed new rules relating to:
- the taxation of termination payments due to come into effect in April 2018. Subject to the finalised Bill, from this date all notice pay will be taxable and employers will be liable to pay employer’s national insurance contributions on termination payments above £30,000
- off-payroll working in the public sector due to come into force on 6 April 2017 and will require public authorities who engage individuals through intermediaries (such as personal services companies) to become responsible for determining whether IR35 applies and whether tax and national insurance deductions should be made.
Legal update: Off-payroll working in the public sector
Achbita v G4S Secure Solutions
Case: The European Court of Justice (ECJ) has held that a company rule prohibiting the wearing of all visible signs of political, philosophical or religious belief was not directly discriminatory on the ground of religion or belief.
Although such a rule may give rise to indirect discrimination, the ECJ was of the view that it might be objectively justified by an employer's pursuit of a policy of political, philosophical and religious neutrality in its relations with customers. In view of this case, employers may want to consider the ethos of their own business and whether their dress code policy needs reviewing generally.
Legislation: The government has announced that its tax-free childcare scheme will begin on 28 April 2017, for eligible working parents of children under two. The scheme will be gradually rolled out over 2017, with the intention that by the end of the year it will be open to working parents, including the self-employed, with children under 12 (or under 17 for disabled children).
Eligible working parents will be able to apply to open an online account to pay for registered childcare, and for every £8 paid in, the government will add an additional £2, up to a maximum of £2,000 per child per year (or £4,000 for disabled children).