Employment law updates 2017: important changes for employers

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

13 October 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 and 2018, see our employment law timeline.

Mind the gap

Employment law updates

Update posted 13 October 2017

Disciplinary proceedings

NHS 24 v Pillar

Case: The Employment Appeal Tribunal (EAT) has held that an investigation into an employee’s misconduct could not be regarded as unfair because the investigation report included details of the employee’s previous acts of misconduct for which no disciplinary action had been taken.

While an overzealous or otherwise unfair investigatory process could render a dismissal unfair, the role of the investigator is to put together all the relevant information and the decision-maker should then decide what to do with it. In this case, the fact that the employee had committed two previous patient safety incidents was relevant information which the decision maker could take into account when deciding to dismiss for a further patient safety incident.

IR35

Big Bad Wolff Ltd v HMRC

Case: The first-tier tax tribunal has found that the IR35 rules applied to a self-employed actor who provided his services to clients through a personal service company (PSC). The tribunal determined that, if the PSC were disregarded, social security regulations would deem the actor to be employed and so the PSC was required to account for NICs under PAYE on the actor’s earnings under the arrangement.

Gender pay gap reporting

In recent weeks the Government Equalities Office has been writing to employers who it believes will be caught by the new gender pay reporting obligations but who have not yet uploaded their data to the government’s website. The letters are designed to prompt action.

While the deadline for reporting is still nearly 6 months away, many employers are finding the process of collecting the necessary data far from straight forward and actually quite time-consuming. We, therefore, recommend that employers have a strategy in place and leave enough preparation time before the deadline to ensure the data is correct, to prepare any accompanying narrative and to put into place employee communication plans.

For more information about the gender reporting obligations and how Burges Salmon can help please see our briefing.

New Acas guidance

Acas have published new guidance for employers on Promoting positive mental health in the workplace (PDF). There is also further guidance on the Acas website on:

  • dealing with stress in the workplace
  • managing staff experiencing mental ill health
  • managing anxiety in the workplace.

Update posted 29 September 2017

Worker status

Case: The EAT is currently hearing an appeal by Uber against an employment tribunal decision that Uber drivers are workers. The outcome of this appeal may take some time and could have implications for a number of businesses with business models which rely on self-employed contractors (even where that is in addition to workers and employees), although these cases are all fact specific.

Jurisdiction clauses

Nogueira and Others v Crewlink Ltd and Osacar v Ryanair

Case: The ECJ has ruled that the employment contracts of cabin crew fall within the jurisdiction of the country where the employee habitually carries out his or her work and that this cannot be equated with the concept of "home base" or the nationality of the aircraft.

This may mean that a number of jurisdiction clauses in employment contracts are unenforceable if they prevent an employee bringing a claim before the courts of the country where they habitually carry out their work.

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

Data Protection Bill

Legislation: The Data Protection Bill, which is due to replace the Data Protection Act 1998, had its first reading in the House of Lords on 13 September 2017 and is due to have its second reading on 10 October 2017.

The Bill is intended to ensure that the data protection regime in the UK is in line with the EU after Brexit. It will set new standards for protecting data in accordance with the GDPR, give people more control over the use of their data, and provide new rights to move or delete personal data. There will also be new criminal penalties and stronger sanctions for non-compliance.

Read legal update: UK government issues new data protection bill – what are the key changes?

Pregnant workers

Porras Guisado v Bankia SA

Case: The Advocate General of the ECJ has given an opinion that a collective redundancy exercise is not in itself an exceptional case that can be used to justify the dismissal of a pregnant Spanish worker. The Advocate General’s view was that in order for it to be lawful, there must be no plausible possibility of reassigning the pregnant worker to another suitable post.

According to the Advocate General’s opinion, a pregnant worker has special protection from the beginning of the pregnancy even if she has not yet notified her employer of the pregnancy. It remains to be seen whether the ECJ will follow this opinion and the ECJ has been urged to clarify in its decision when the protected period for pregnant workers begins under the Pregnant Workers Directive.


Update posted 15 September 2017

Monitoring employee emails

Barbelescu v Romania

Case: The European Court of Human Rights has overturned a previous decision in the case of Barbelescu v Romania concerning an employer’s right to monitor its employees’ messages and emails.

It held that the employer had breached Barbelescu’s right to a private life by monitoring his Yahoo messenger account without his knowledge and the Romanian courts had failed to strike a fair balance between an employee’s right to a private life and his employer’s right to ensure he was following workplace rules.

This does not mean that employers cannot monitor employees’ emails or other communications but, in the light of the decision, employers should review their policies and ensure that explicit warnings are given to employees about monitoring of workplace emails and internet use.

Corporate governance – executive pay and worker representation

The government has published its plans for corporate governance reform. The reforms are in each of the three key areas covered by its 2016 green paper on corporate governance reform:

  1. Executive pay (including proposals to report the ratio of CEO pay to average pay).
  2. Worker representation at board level.
  3. Large privately-held businesses.

Many of the reforms involve suggested amendments to the UK Corporate Governance Code (the Code) and the Financial Reporting Council (FRC) has announced it will carry out a fundamental review of the Code later this year.

Read legal updateCorporate governance reforms: world leading or watered down?

Injury to feelings awards

New Presidential Guidance has been issued on the Vento Bands, which are used to determine the level of award for injury to feelings in discrimination cases. The new increased bands, which will be used by employment tribunals for claims issued on or after 11 September 2017, are now:

  • lower band for less serious cases: £800 to £8,400
  • middle band: £8,400 to £25,200
  • upper band for the most serious cases: £25,200 to £42,000
  • exceptional cases: over £42,000.

For claims issued before that date, it will be open to the tribunal to adjust the bands to reflect inflation.

Termination payments

Changes to the taxation of termination payments have now been included in the new Finance Bill which was published on 8 September 2017. These proposed changes for the tax year 2018 – 2019 were complex and were dropped in April 2017 in order to push through the Finance Act before the General Election.

The draft legislation has been simplified and, subject to the finalised Bill, from 6 April 2018 all notice pay will be taxable and employers will be liable to pay employer’s national insurance contributions on termination payments above £30,000.

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