DALLIMORE HelenThere are a number of expected changes in employment law in 2016 and beyond and we have prepared a quick reference table so you can check you are up to date and ensure that your business is prepared for what is around the corner. 

The table below, prepared by Helen Dallimore, senior associate, is up to date as of 8 December 2016 and looks ahead to future proposed changes for 2016. The expected dates are based on the government's announcements to date. However it remains to be seen whether the government will be able to achieve its intended timetable for future proposals. To view the changes from 2015, please click here.
 
If you would like to discuss any of the points raised, please get in touch with your usual contact in the Foot Anstey Employment Team.
 

When Expected?

Change

Key points to note

1 January   2016

Regulatory   – FCA Clawback provisions

Certain FCA and dual-authorised firms   to whom the Remuneration Codes apply will now be subject to a requirement for employers to have the power to clawback variable remuneration for a period of 7 years after vesting in cases such as misbehaviour, material failure or a material failure of risk management. Firms are required to set up specific   criteria for the application of malus and clawback which must include certain   situations. In addition certain PRA and FCA firms are required to extend the clawback period from 7 to 10 years for senior managers where at the end of 7 years there are outstanding internal or regulatory investigations which may lead to the application of clawback. See FCA note for more information as to the firms this impacts. For more information on this please view our   previous article on performance management or contact Alan Hughes, partner or Claire Holland, senior associate.

1 January   2016

Whistleblowing reporting and public sector exit payment provisions

The Small Business, Enterprise and   Employment Act 2015 (SBEEA 2015) (Commencement No 3) Regulations 2015 have   brought into force the following provisions:

  • The power for the Secretary of State to make regulations requiring "prescribed   persons" to produce annual reports of the whistleblowing disclosures   made to them by workers (Section 148 of the SBEEA, which inserts a new   section 43FA into the Employment Rights Act 1996); and
  • A provision allowing the government to make regulations requiring employees   leaving the public sector to repay some or all of their exit payments if they   return to public sector employment within a prescribed period. (Sections 154-157 SBEEA). For more information please see our previous article.

11 January   2016

Exclusivity in zero hours contracts

Exclusivity clauses in zero hours contracts have been banned and rendered unenforceable since 26 May 2015. Regulations came into force on 11 January 2016 creating a right for zero hours workers not to be unfairly dismissed or subject to a detriment as a result of breaching an exclusivity clause.

7 March 2016

Senior Managers Certification Regime

The PRA and FCA are implementing a new Senior Managers and Certification Regime to increase individual accountability for senior persons at firms. It applied to a limited number of firms including banks, building societies, credit unions and large investment firms from March 2016 but is being extended out to all financial services firms and this is expected to be by 2018 (see below).

Relevant for financial
years ending on or after 31 March 2016
Modern Slavery Statements

Since 29 October 2015 the Modern Slavery Act 2015 has introduced a new requirement for large commercial organisations undertaking business in the UK to publicly report steps they have taken to ensure their business and supply chains are trafficking and slavery free.  Large businesses are now required to complete an annual modern slavery statement for each financial year ending on, or after, 31 March 2016 in which their total turnover is above £36 million.

There is no prescribed time limit in which to make the statement. The guidance provides that a commercial organisation is expected to publish its slavery and human trafficking statement as soon as reasonably practicable after the end of  the financial year and is encouraged to report within six months of the financial year end to which the statement relates. The guidance suggests that organisations may decide to publish the statement alongside its annual or non-financial reports. For more information click here.

1 April 2016

Living Wage

Regulations came into force on 1 April 2016 to add the National Living Wage (NLW) rate of £7.20 an hour for workers aged 25 and over whilst retaining the current National Minimum Wage (NMW) rates for those under 25 until 1 October 2016. The regulations also increase the financial penalty payable by employers who underpay the NMW from 100% to 200% of the underpayment due to each worker. For more information on the living wage, please see our articles: 'In Brief' - monthly round up and The impact of the Living Wage. Please contact us if you would like to discuss how you can manage this within your business.

6 April 2016 Compensatory award increase The maximum compensatory award for unfair dismissal rose to £78,962 from 6 April 2016 and the maximum amount of a week's pay rose to £479.

6 April 2016

Financial penalties for unpaid tribunal awards and settlements

A new scheme has been introduce to penalise employers who fail to pay tribunal awards or sums due under a COT3 settlement. For more information please see our March in brief bulletin.

6 April 2016

Employment tribunal postponement procedures

Changes have been made to the Employment Tribunal Rules of Procedure to provide that:

  • Once a party has been granted two postponement requests for hearings in the same case, further postponement applications by the same party will only be granted in limited circumstances (this includes preliminary hearings); and
  • Any postponement application submitted less than seven days before a hearing (or made at the hearing itself) will only be granted in limited circumstances.   If granted, tribunals will be obliged to consider imposing a costs order or preparation time order against the party granted the late postponement.

For more information on further anticipated exemptions click here.

6 April 2016 A new state pension scheme is introduced, ending contracting-out A single-tier state pension was introduced from 6 April 2016, replacing the previous basic state pension and additional state pension. Employer-provided pension schemes will no longer be able to contract out of the state pension and receive a national insurance rebate. This means that, where an employer provides a previously contracted-out scheme, its employer and employee national insurance contribution liability will increase. Employers should ensure that employees have been made aware that there may be an impact on their pay packet and that they understand the reasons for this. For more information, please contact Helen Trethewey.
6 April 2016 Register of people with
significant control

From 6 April 2016 all UK private companies, including companies limited by guarantee, and UK LLPs must keep a PSC register recording details of 'people with significant control' (PSCs). From 30 June 2016 such PSC information must be sent annually to Companies House and failure to comply can result in the company and its directors committing a criminal offence. Only certain publicly listed companies are exempt from keeping the PSC register. PSCs themselves also have an obligation to notify the company within one month of becoming a PSC. Both directors and company secretaries of companies and potential PSCs should be taking steps now to identify status and create the PSC register.  The full Government non-statutory guidance is available here and there is lots of information freely available online. However, if you require more information, please contact your usual Foot Anstey contact.

This new requirement will also affect employers with pension schemes that have a UK corporate trustee in place. The trustee directors will also need to have taken steps to ensure that the necessary register is in place and contains the required information by 6 April 2016. This includes prescribed requirements even if there is no PSC.  The information on the register must be provided to Companies House from 30 June 2016 as part of the filing of the Confirmation Statement.  For more information on how this requirement affects Pension schemes, please contact senior associate, Helen Trethewey.

April 2016

No increase to SMP and other statutory payments for 2016-2017

Because of a 0.1% fall in CPI in the year to September 2015, there has been no increase to Statutory Maternity, Paternity, Adoption and Shared Parental Pay, Maternity Allowance, and Statutory Sick Pay(or the qualifying earnings thresholds) for 2016-17 and so the figures will remain the same as the previous tax year.

6 April 2016 Restrictions on travel and subsistence relief for workers engaged through employment
intermediaries

Legislation has been introduced to provide that where a worker personally provides services to
another person under an arrangement involving an employment intermediary each assignment will be required to be treated as separate employment. This will only apply where the worker is under the supervision, direction or control of any person. Anti-avoidance arrangements will be disregarded. There is a similar restriction for workers providing their services through a personal services company where they fall in the IR35 rules.


These changes have been brought in to address concerns that such workers were getting travel expenses free of income tax and NICs on the basis that a series of permanent workplaces were effectively being regarded as temporary workplaces.

Expected by April 2016 (but not yet in place)

Public Sector Exit Payments, repayment provisions

The government has the power to bring in regulations to require exit payments to be repaid where high earning public sector employees or office holders (i.e. those earning more than £80,000) are subsequently re-employed in the public sector within 12 months, on a pro rata basis. For more information, please see our May 'In-brief' article.

8 May 2016 Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2016 The main changes to the current regime arising from these regulations are that there is no longer a requirement for employment agencies/businesses to agree terms, and enter into a written contract, with hirers before providing any services. Employment agencies and businesses have also been banned from recruiting solely from other EEA countries without advertising in Great Britain. The regulations will need to be reviewed by the Secretary of State every five years. The regulations came into effect on 8 May 2016.
12 May 2016 Immigration Act receives Royal Assent The Immigration Act aims to curb illegal working and prevent the exploitation of migrant workers. Many of the provisions will be brought into force by future regulations. For more information see our May 'In-brief' article.

23 June 2016

EU Referendum

UK voted to leave the EU by a majority of 52% to 48%.

12 July 2016 Provisions of Immigration Act come into force Provisions have been introduced which create a new post of Director of Labour Market Enforcement, create a new offence of illegal working (allowing earnings of illegal workers to be seized), and extend the existing offence of knowingly employing an illegal migrant to include the situation where an employer has a reasonable cause to believe a person is an illegal worker. For more information see our July bulletin.
Summer 2016 Replacement of Human Rights Act 1998 by British Bill of Rights A 12 week consultation was expected to start in November/December 2015 on the proposals
to replace the Human Rights Act 1998 with a British Bill of Rights, with a view to the new law receiving Royal Assent by Summer 2016. However, the consultation is still awaited.

7 September 2016

PRA and FCA rules on whistleblowing in financial institutions comes into force

The PRA issued a policy statement on 6 October 2015 on whistleblowing in deposit-takers, PRA-designated investment firms and insurers (PS24/15). Alongside this, the FCA has published its   policy statement on whistleblowing in deposit-takers, PRA-designated   investment firms and insurers (PS15/24). Both the PRA and FCA have introduced on 7 September 2016 a "package" of new whistleblowing rules designed to build on and formalise good practice. Whilst the new rules apply to a limited number of firms, they have the status of non-binding guidance for firms currently not in scope, who may wish to comply voluntarily. For more information, please contact Claire Holland, senior associate on +44 (0)1392 685254 or email claire.holland@footanstey.com

1 October 2016 New National Minimum Wage
Rates for the period to 31 March 2017

The Prime Minister has announced new NMW rates which took effect from 1 October 2016:

  • The National Living Wage rate remains at £7.20
  • The rate for workers aged 21 to 24 is £6.95
  • The rate for workers aged 18 to 20 (the developmental rate) is £5.55
  • The rate for young workers aged under 18 but above compulsory school age) is £4.00
  • The apprenticeship rate is £3.40
  • The accommodation offset limit has increased to £6.
It is anticipated that all NMW rates (including the NLW) will be uprated from April 2017.
October 2016 Directors must be natural
persons
A requirement for corporate directors to be individuals (as opposed to corporates) is expected to be brought into force in October 2016 although there will be a grace period of 12 months from the date a new section 156A of the Companies Act 2006 comes into force. After this time any corporate directors will cease to be directors by operation of law. There has been a consultation on whether there should be exceptions to this requirement and there may be regulations to address this although these have not currently been published.

Autumn 2016 (not before 1 October 2016)

Public sector exit payments The government has published the draft Public Sector Exit Payment Regulations 2016 which will impose a cap of £95,000 on the pre-tax value of exit payments made to most public sector workers. For more information see our November update.
1 December 2016 Illegal Working Compliance Orders Where an employer has previously committed criminal or civil immigration offences or has failed to pay an immigration penalty, and they are again found to be employing a person without the right to work in the UK, the employer faces closure of its premises for up to 48 hours, pending the outcome of an application for an illegal working compliance order.
December 2016 with further measures in 2017 (Announced November 2016) Employee Shareholder Status The Government intends to abolish the tax reliefs for Employee Shareholder Status ("ESS") shares acquired in consideration of an ESS agreement made on or after 1 December 2016 (the advantages will continue to apply for those entered into before that). The Government intends to close ESS to new users altogether "at the earliest opportunity". The removal of tax advantages linked to ESS is in response to evidence that it is primarily being used for tax planning purposes by high-earing individuals.
7 March 2017 FCA and PRA regulatory reference scheme comes into force. On 6 October 2015, the FCA and PRA issued a joint consultation paper on regulatory references. This was part of a wider package of reforms under the Senior Managers Certification Regime aiming to improve accountability in banks and insurers. The regulators are proposing changes to the way affected firms and insurers seek and provide references for candidates of certain roles.

The new rules on references were originally due to be implemented in March 2016. The PRA issued a first tranche of rules on 7 March 2016 but the FCA continued to apply the current referencing requirements under the approved person regime pending further consultation. On 28 September 2016, the FCA and the PRA published separate policy statements setting out the final rules. These rules are similar to the draft rules although the scope of mandatory disclosures has been limited so they are aligned with the FSMA notification regime.

For more information on this and the aspects of the regime that will apply to all FCA regulated entities please click here.

April 2017

Apprenticeship Levy

The Apprenticeship Levy is expected to come into force in April 2017. For more information click here and here.

6 April 2017 Gender Pay Gap reporting requirements The government had intended that the legislation requiring mandatory reporting on the gender pay gap for businesses with more than 250 employees would be in force from 1 October 2016 however it has been pushed back to come into force on 6 April 2017. For more information click here to read our article or speak to equal pay expert Karen Bates, partner on +44 (0)1392 685221 or email karen.bates@footanstey.com
April 2017 Salary Sacrifice Tax savings on salary sacrifice and benefits in kind are to be stopped from April 2017, with exceptions for ultra-low emission cars, pensions, childcare and cycling. Arrangements set in place before April 2017 will be protected until April 2018. The more expensive agreements for cars, accommodation and school fees will be protected for longer - until April 2021.

For more information see our Autumn Statement article.

April 2017 Public Sector Off-payroll Working Rules  Off-payroll working rules in the public sector will be reformed from April 2017, moving responsibility for paying the correct tax, to the body paying the worker’s company. The 5% tax-free allowance for those working in the public sector will also be removed, to reflect the fact they no longer bear the administrative burden of deciding whether the rules apply.
April 2017 New National Living Wage and National Minimum Wage rates for the period to 6 April 2018

The Chancellor announced new NMW and NLW rates  which will take effect from 6 April 2017:

  • The National Living Wage rate increases to £7.50
  • The rate for workers aged 21 to 24  increases to £7.05
  • The rate for workers aged 18 to 20 (the developmental rate) increases to £5.60
  • The rate for young workers aged under 18 but above compulsory school age)  increases to £4.05
  • The apprenticeship rate increases to £3.50
  • The accommodation offset limit has increased to £6.
10 April 2017 Increases to statutory maternity, paternity, adoption and sick pay The government has announced the following proposed increases to weekly statutory benefit payments:
  • Statutory Sick Pay (SSP) will increase from £88.45 to £89.35.
  • Statutory Maternity Pay (SMP) and (maternity allowance) will increase from £139.58 to £140.98.
  • Statutory Paternity Pay (SPP) will increase from £139.58 to £140.98.
  • Statutory Shared Parental Pay (ShPP) will increase from £139.58 to £140.98.
  • Statutory Adoption Pay (SAP) will increase from £139.58 to £140.98.

2017   (previously scheduled for Autumn 2015)

Childcare Scheme

A new tax free childcare scheme is to be introduced to support eligible parents with childcare costs under the Childcare Payments Bill 2014-2015. It is envisaged that the government will provide 20% support towards their childcare costs up to a maximum of £2000 of government support per child per year, effectively providing basic-rate tax relief on childcare costs of £10,000. Parents will qualify if all parents in a household are working, with income less than £150,000 a year, and are not already receiving tax credits or Universal credit. In the Autumn Statement it was announced that there will be an upper limit of £100,000 per parent and a minimum weekly income equivalent to 16 hours per parent to be eligible for participation. This scheme was originally scheduled for Autumn 2015 but following a legal challenge by childcare voucher providers (the result of which has confirmed that the scheme is lawful) it has now been pushed back to   2017.

Unknown   (announced September 2015)

Measures to improve compliance with the National Minimum Wage and the National Living Wage

On 1 September 2015, BIS announced measures to improve compliance with the National Minimum Wage (NMW) and, the National Living Wage (NLW) (when it is introduced). The measures include:

  • Increasing the budget for enforcement of the NMW and NLW in 2016
  • A new HMRC team dedicated to pursuing the most serious cases of deliberate non-payment of the NMW and NLW by employers
  • Disqualification from being a company director for up to 15 years for the non-payment of the NMW and the NLW

Following a consultation the government has also confirmed it will create a new position called the Director of Labour Market Enforcement and   Exploitation, which will oversee enforcement of the NMW and NLW, the Employment Agency Standards Inspectorate and the Gangmasters Licensing Authority. It will also introduce a new offence of aggrevated breach of labour market legislation. 

April 2018 Termination Payments Termination payments over £30,000 to be subject to employer NICs as well as income tax from April 2018. The full response to the consultation on the simplification of termination payments is expected shortly and further changes are anticipated.
2018 Grandparents leave The Government is anticipated to have a consultation on the proposals to extend shared parental leave to grandparents during 2016 with the aim of it coming into force in 2018.

2018

Senior Managers and Certification Regimes

The government has decided to extend the Senior Managers and Certification Regime to all financial services   firms and replace the current Approved Persons Regime from 2018 with the aim   of enhancing personal responsibility for senior managers across the sector. For more information please click here, or contact Alan Hughes, partner.

  

For more information, please contact your usual contact in the Foot Anstey Employment Team or Helen Dallimore, senior associate on +44 (0)1392 685289 or email helen.dallimore@footanstey.com
Tags: Employment and Pensions2016