Employment law updates 2017: important changes for employers

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

08 December 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.

Data transfers

Employment law updates

Update posted 8 December 2017

Holiday pay

King v Sash Window Workshop Ltd

Case: The ECJ has held that a salesman, who was ostensibly engaged on a self-employed basis and who had not received any holiday pay during his 13 year engagement with the company, was entitled to carry over annual leave indefinitely where it had not been paid in accordance with the Working Time Directive and to receive payment for such accrued leave upon termination. 

Although the decision only applies to the four weeks’ leave provided for under the Working Time Directive,  it may bring in to doubt:

  1. the two year cap on unlawful deductions claims (and the legislation implementing this) 
  2. the three month break rule established in the decision of the EAT in Bear Scotland v Fulton case in 2014.

Given the potentially serious implications of this decision (for example, the possibility that claims for back pay could now possibly go back until 1996, when the Working Time Directive came into force) we will continue to closely monitor developments in this area.

Data protection

Various claimants v WM Morrisons Supermarket PLC

Case: The supermarket chain, Morrisons, has been found to be vicariously liable for the actions of a senior IT auditor who posted on a file sharing website the payroll data of around 100,000 employees, including their names, dates of birth, addresses, national insurance numbers, bank sort codes and account numbers.

In a class action brought by 5,518 of the employees affected by the data leak, the High Court found Morrisons to be vicariously liable for the employee’s actions as they were ‘sufficiently closely connected’ to his role at Morrisons. This was even though the uploading of the data took place outside of work hours on a personal computer, and the employee’s aim was to damage Morrisons. Leave to appeal has however been granted.

New statutory rates

The government has announced the following proposed new rates for statutory payments from April 2018:

  • £145.18 per week for statutory maternity pay (SMP), statutory paternity pay (SPP), statutory shared parental pay (ShPP) and statutory adoption pay (SAP), an increase from £140.98.
  • £92.05 per week for statutory sick pay (SSP), an increase from £89.35.

New Acas guidance

Acas have published new guidance for employers on:


Update posted 24 November 2017

Autumn Budget 2017

The key employment law announcements in the Autumn Budget include:

Consultation about possible changes to IR35 in the private sector – Following a reform of the off-payroll working rules (known as IR35) for engagements in the public sector in April 2017, the government is considering whether to extend the reforms to the private sector.

The government has said it will consult on how to tackle non-compliance with IR35 in the private sector, drawing on the experience of the public sector reforms and external research already commissioned by the government and due to be published in 2018.

Read more about reforms in the public sector.

Employment status discussion paper – The government has said it will publish a discussion paper as part of the response to Matthew Taylor’s review of employment practices in the modern economy, exploring the case and options for longer-term reform to make the employment status tests for both employment rights and tax clearer (see also below).

National living wage – The government has accepted the recommendations of the Low Pay Commission for increases to the national living wage (NLW) and the national minimum wage (NMW).

The NLW for workers aged 25 and over will increase by 4.4% from £7.50 to £7.83 from April 2018. The NMW rates will increase:

  • from £7.05 to £7.38 for 21 to 24 year olds
  • from £5.60 to £5.90 for 18 to 20 year olds
  • from £4.05 to £4.20 for 16 and 17 year olds
  • from £3.50 to £3.70 for apprentices.

Worker status

A joint report – A framework for modern employment (PDF) has been published by the House of Commons Work and Pensions Committee and the Business, Energy and Industrial Strategy Committee, aiming to take forward some of the findings of the Taylor Review. The government’s formal response to the Taylor Review is expected shortly.

It remains to be seen to what extent the joint report influences the government but its key recommendations include:

  • New legislation with clearer definitions of employment status emphasising the importance of control and supervision of workers by a business, rather than focusing on whether the individual can appoint a substitute, to distinguish between workers and the genuine self-employed.
  • Individuals should be assumed to have "worker status" by default in businesses with a workforce over a certain size.
  • A requirement for a clear written statement of a worker’s rights and entitlements to be provided within seven days of the start of their engagement.
  • Businesses that benefit from a flexible workforce should either guarantee a number of hours per week or pay a premium national minimum wage level to compensate for uncertainty.
  • Higher punitive fines and costs orders for businesses that falsely classify workers as self-employed and have already lost a similar case.

Update posted 9 November 2017

Whistleblowing

Royal Mail Ltd v Jhuti

Case: The Court of Appeal has held that the fairness of the dismissal in a whistleblowing case has to be determined by what the employer reasonably believed when dismissing the employee - by reference to what the decision-maker actually knew, not what they ought to have known.

In this case, the appeal was allowed and the dismissal was found to be fair because the person who took the decision to dismiss the employee was not aware of the protected disclosures, even though they had been misled by the employee’s line manager, who knew of the disclosures and had engineered a dismissal for poor performance. We understand an appeal against the decision has now been lodged.

Employment tribunal fee reimbursement

The initial stage of the employment tribunal fee refund scheme has been completed and it is now open to anyone to apply for a refund if they paid a fee to an employment tribunal or Employment Appeals Tribunal (EAT) between 29 July 2013 and 26 July 2017.

For employers, this will mainly be relevant if you paid a fee for judicial mediation, a breach of contract counterclaim or an appeal to the EAT or if you were ordered to pay the fees of a claimant who brought a claim against you.

Applications for a refund can be made using one of the following forms:

It may be necessary to include a copy of any relevant order from the employment tribunal and evidence of payment of the fees. Those who make a successful application will have the refund transferred to their bank account (plus 0.5% interest) and will receive a letter confirming the amount.

Any employer who has paid a fee to the tribunal or EAT or has been ordered by the employment tribunal to pay a claimant’s fees should consider putting in their application for a refund now.

Sex discrimination

Ramos v Servicio Galego de Saude

Case: The ECJ has held that an employer's failure to carry out a workplace risk assessment to assess the risk posed to a particular breastfeeding worker was less favourable treatment of a woman related to pregnancy or maternity leave and constituted direct sex discrimination.

In this case, the employer had conducted a risk assessment for the role of an A&E nurse but they had not carried out an individual assessment of Ms Ramos's circumstances and the effect of the complex shift system, potential exposure to ionising radiation, healthcare associated infections and stress on her as a breastfeeding worker.

The case is a reminder to employers to assess the risks to particular individuals who are pregnant or breastfeeding and that carrying out a general risk assessment for the role may not be sufficient.

ICO guidance

The ICO has launched a new telephone advice service to help small organisations prepare for the introduction of the GDPR and to assist with queries about data protection, freedom of information requests and electronic marketing queries.

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