Trade Union Bill receives Royal Assent and becomes Trade Union Act

The Trade Union Bill received Royal Assent today [4 may 2016] and becomes the Trade Union Act.

Key provisions are:-

  • requirement for at least 50% turnout in votes for industrial action
  • in certain public services, including in the health, education, transport, border security and fire sectors, an additional threshold of 40% of support to take industrial action from all eligible members must be met for action to be legal
  • setting a 6 month time limit (which can be increased to 9 months if the union and employer agree) for industrial action so that mandates are always recent
  • requiring a clearer description of the trade dispute and the planned industrial action on the ballot paper, so that all union members are clear what they are voting for
  • creating a transparent process for trade union subscriptions that allows new members to make an active choice of paying into political funds
  • ensuring that payroll deductions for trade union subscriptions are only administered where the cost is not funded by the public

The commencement date is not known; it will be brought into force by a statutory instrument in due course.

Source Daniel Barnett 4 May 2016

Forthcoming Legislation: Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2016

These regulations amend the Conduct of Employment Agencies and Employment Businesses Regulations 2003 to prohibit employment agencies from generic recruitment advertising in another European Economic Area (EEA) country without also advertising the vacancy in Great Britain and in English.

Employment agencies and employment businesses were already prohibited from advertising specific job vacancies in other EEA countries by the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2014. The new regulations extend the ban to generic recruitment campaigns in the EEA.

Employers who wish to recruit from outside of the EEA need to comply with the Resident Labour Market Test.
The new regulations also amend the 2003 regulations to remove burdensome legislation where possible and to give employment agencies and businesses greater freedom in the way they work.

Source: Croner Solutions, 4 April 2016

Budget – March 2016

Chancellor George Osborne revealed few surprises in today’s Budget (16th March) – on the one hand bullish about jobs growth and on the other cautiously revising down the UK’s growth prospects for this year.

The key announcements for employers were the introduction of compulsory national insurance contributions (NICs) on termination payments over £30,000, and an increase in the threshold for personal tax contributions.

Personnel Today, 16 March 2016

Review of Employment Law in 2015

Introduction
This article aims to provide an overview of the most important legislative changes that have taken place during 2015, covering amendments to legislation and some cases that have had a significant impact on its interpretation.

Shared parental leave
Undoubtedly, the most significant legal development in 2015 has been the introduction of shared parental leave (SPL) (through the Children and Families Act 2014), in force in respect of employees whose child was due to be born or adopted on or after 5 April 2015. Employees with a minimum of 26 weeks’ continuous service as at the “relevant date” have the choice to end their maternity or adoption leave on a date they specify and share the untaken balance of that leave (as SPL) with their husband, partner, civil partner or the father of the child.

There is much more flexibility under the SPL scheme for employees to choose which parent takes leave, when they take leave and for how long, for example, each parent may take up to three separate periods of SPL at the same time as each other or at separate times. Any outstanding statutory maternity or adoption pay can also be shared between the employee and his or her partner, subject to certain eligibility conditions.

In line with the introduction of SPL, additional paternity leave is being phased out and is no longer available except where the child was due to be born or adopted before 5 April 2015.

Note:
However, the right for eligible fathers to take two weeks’ ordinary paternity leave within eight weeks of the birth of the child remains unchanged.

Adoption leave and pay
As from April 2015, the rules on adoption leave and pay have been further aligned with those of statutory maternity leave/pay. The previous 26 weeks’ service requirement for eligibility for statutory adoption leave was removed (but remains in place in respect of statutory adoption pay) and the first six weeks of statutory adoption pay is now payable at the rate of 90% of the employee’s average weekly earnings instead of at the statutory flat weekly rate as was the case previously.

Additionally, prospective parents taking part in the “fostering for adoption” scheme, and intended parents in a surrogacy arrangement, are now entitled to statutory adoption leave and pay, provided they meet the relevant eligibility conditions.

As from 5 April 2015, there is a right for adopters to take time off work to attend adoption appointments in advance of a child being placed with them for adoption. For primary adopters, this is paid time off for up to five pre-adoption appointments while for the secondary adopter, the right is to unpaid time off to attend up to two appointments. There is no length of service qualification.

Parental leave
The upper age limit of children in respect of whom eligible employees may take parental leave increased from age 5 to 18 in April 2015. This refers to the entitlement of employees with a minimum of one year’s continuous service to take up to a total of 18 weeks’ unpaid leave in respect of each child (not to be confused with the new “shared parental leave” scheme referred to above).

Equality

Eligibility to claim
Under s.83 of the Equality Act 2010, an individual is eligible to bring a complaint of discrimination to an employment tribunal if he or she is in “employment under a contract of employment, a contract of apprenticeship or a contract personally to do work”. In Kemeh v Ministry of Defence [2014] EWCA Civ 91, the Court of Appeal drew a limit to this provision by holding that a black employee who worked for the British Army as a cook could not bring a claim of race discrimination against the Ministry of Defence on account of offensive comments made to him at work by an employee of a subcontractor that provided services to the Ministry of Defence. The Ministry of Defence could not be held liable for the behaviour of someone who was employed by one of their subcontractors.

Discrimination by association
As a result of wording in the Equality Act 2010, a claim for discrimination by association is only technically possible where it is one for direct discrimination or harassment. A recent judgment of the Court of Justice of the European Union (CJEU), however, introduces the prospect of claims for indirect discrimination by association. In CHEZ Razpredelenie Bulgaria AD v Komisia za Zashtita ot Diskriminatsia ECJ Case C-83/14, the CJEU ruled that the claimant, who ran a shop in a district in Bulgaria that was inhabited predominantly by Roma people, could bring a claim of race discrimination even though she herself was not Roma. The claim was that the respondent’s policy of placing electricity meters higher than the usual standard in Roma districts (in order to deter tampering) had a disproportionate adverse impact on Roma people, and that even though she herself was not Roma, she was disadvantaged as her shop was located in a district where the practice was applied. This judgment has considerable implications for UK law. Under the Equality Act 2010, an individual can only claim indirect race discrimination if he or she can show that a provision, criterion or practice applied by his or her employer has a disproportionate adverse impact on a particular racial group — and that he or she is a member of that group and has suffered that disadvantage. This case suggests that someone who is not a member of the disadvantaged racial group can claim indirect discrimination because of an “association” with that group (provided he or she has suffered the particular disadvantage).

Agency workers
In Coles v Ministry of Defence [2015] EAT 0403/14, the Employment Appeal Tribunal (EAT) ruled that the right of agency workers (under regulation 13 of the Agency Workers Regulations 2010) to be informed of any permanent vacancies in the hirer’s organisation refers only to “information” about available vacancies. Agency workers do not have the right to any special treatment when applying for job vacancies.

Zero-hours contracts
With effect from 26 May 2015, the Small Business, Enterprise and Employment Act 2015 has rendered exclusivity clauses in zero-hours contracts unenforceable. Employees engaged on zero-hours contracts cannot lawfully be prevented from working elsewhere.

Deductions from wages
Where there has been a series of unlawful deductions from an employee’s wages, the employee can, within certain limits, bring a complaint covering all the deductions, so long as the claim is lodged within three months of the latest deduction. The Deductions from Wages (Limitation) Regulations 2014, which took effect in respect of claims brought after 1 July 2015, provide for a limit on backdated claims for deductions from wages of two years prior to the date of the claim being lodged (with limited exceptions).

This followed the controversial decision of the EAT in Bear Scotland Ltd and ors v Fulton and ors [2014] UKEAT 0047, in which the EAT ruled (in cases concerning holiday pay) that where there has been a gap of more than three months between any two deductions, a backdated claim for any deductions that occurred before the three-month gap will be out-of-time, ie the employee will not be able to claim compensation in respect of such earlier deductions.

Minimum wage
With effect from 26 May 2015, the maximum penalty of £20,000 for failing to pay the National Minimum Wage can apply in respect of each underpaid worker rather than being the total penalty irrespective of the number of employees who were underpaid.

Working time and holidays

Working time
In Federación de Servicios Privados del sindicato Comisiones Obreras v Tyco Integrated Security SL and anor [2015] CJEU C 266/14, the CJEU ruled that time spent by mobile workers who have no fixed place of work travelling between their homes and their first and last customers of the day must be counted towards the 48-hour week. Such time cannot be classed as rest periods.

Holidays
In Plumb v Duncan Print Group Ltd EAT 0071/15, the EAT ruled that, in light of EU law and the case law of the CJEU, an employee’s holiday leave that has been carried over as a result of sickness absence must be taken within a period of (at most) 18 months from the end of the holiday year in which the leave accrued — otherwise it is lost. The law does not require employers to allow carry-over without limit.

Data protection
As from 10 March 2015, it is not permitted for an employer to force a job applicant, as a condition of employment, to utilise his or her right to make a subject access request under the Data Protection Act 1998 to obtain and provide a copy of his or her criminal record. To do so is a criminal offence that can lead to an unlimited fine. Where an employer needs to check whether an individual has any criminal convictions in order to protect its business or its customers or clients, it should seek disclosure through the Disclosure and Barring Service (DBS) or (in Scotland) Disclosure Scotland.

There is an exception to the ban on enforced subject access requests where an individual’s criminal record is required by law or where its disclosure is justified in the public interest.

Redundancy
The CJEU issued an important ruling as regards the interpretation of s.188 of the Trade Union and Labour Relations (Consolidation) Act 1992. This section states that the duty to consult representatives in the event of proposed redundancies arises where the employer proposes to dismiss as redundant 20 or more employees at one establishment within a period of 90 days. In USDAW and anor v WW Realisation 1 Ltd and ors ECJ Case C-801/14 — popularly known as the “Woolworths case” — the CJEU ruled that an “establishment” for the purposes of collective consultation under the EU Collective Redundancies Directive is the entity to which an employee is assigned. In most cases, this will mean the individual workplace (for example, office, shop or factory) rather than the business as a whole. Thus, where any single establishment employs fewer than 20 employees, collective consultation over proposed redundancies will not be required in respect of those employees.

Conclusion
Some of the legislative developments in 2015 have been of great importance and there is no reason to doubt that next year will produce further significant developments, to which we will all, no doubt, look forward!

Source: Croner-i, 25 November 2015

Government to proceed with British Bill of Rights to replace Human Rights Act 1998

17 October 2015, the Independent reported that the government intends to proceed with its introduction of a British Bill of Rights to replace the Human Rights Act 1998. A 12-week consultation is expected to start in November or December 2015 with a view to the new law receiving Royal Assent by the summer of 2016.  According to the report, the Bill will go straight to the House of Commons without a Green or White Paper.

Source: Practical Employment Law, 23 October 2015

Changes Brought Under the New Consumer Rights Act 2015

A background to the new Act

Consumer law will be subject to significant change with the introduction of the new Consumer Rights Act 2015 (the CRA). The CRA comes into force on 1 October 2015 and all purchases from this date onwards will be governed by it.

The consumer’s rights in relation to the sale of goods and unfair terms remain mainly the same as under the earlier legislation, but are clarified and enhanced in places. New consumer remedies have also been introduced.

The CRA is divided into three parts:

  • Part 1 deals with consumer contracts for goods, digital content, and services;
  • Part 2 deals with unfair terms;
  • Part 3 contains miscellaneous provisions, including enforcement powers.

The main changes are associated with Parts 1 and 2.


A summary of the changes

It is important to note from the outset that the following pieces of legislation will cease to apply to contracts concluded after 1 October:

  • Most of the Sales of Goods Act 1979 (the SOGA);
  • Supply of Goods and Services Act 1982 (the SGSA), in relation to consumer contracts;
  • Unfair Contract Terms Act 1977 ( the UCTA);
  • Unfair Terms in Consumer Contracts Regulations 1999 (the UTCCRs).

With regards to Part 1 of the CRA, certain provisions of the SOGA will continue to apply to contracts for goods and services. In particular, it continues to be the case that all products must be of satisfactory quality, fit for purpose and as described.

For the first time, consumer law relating to digital content has been introduced. Previously, intangible digital property was not considered to be a good and so, for example, a song purchased online was not subject to any provisions of the SOGA.

The consumer will now have a right to demand a working version of faulty digital content, whether that is granted by way of repair or replacement, or to a refund without undue delay. The CRA defines digital content as ‘data which are produced and supplied in digital form’.

Another significant change arises in relation to remedies available to the consumer. Part 1 of the CRA introduces a new tiered remedy system:

  1. A short term right to reject
    A 30 day period is now afforded to the consumer, within which they may reject faulty goods. This period can be extended by agreement between the trader and consumer but it cannot be reduced. This right does not apply to digital content.
  2. Repair or replacement –
    If the consumer is outside the 30 day right to reject and has had the goods for up to six months, they will be required to provide the trader with one opportunity to repair or replace any goods/digital content which are of unsatisfactory quality, unfit for purpose or not as described.  The consumer can choose whether they want the goods to be repaired or replaced. The trader should fulfill the repair or refund within a reasonable period of time.
  3. Right to price reduction or final right to reject –
    If the attempt at a repair or replacement is unsuccessful, the consumer is then entitled to a higher tier remedy of a refund or price reduction, if they wish to keep the product.

If the consumer discovers the fault within the first six months of delivery, it will be presumed to have existed from the time of delivery. The onus will be on the trader to prove otherwise.

In instances where the consumer has been in possession of the goods for longer than six months, the onus is on the consumer to prove that there was a fault at the time of delivery.

Part 2 of the CRA brings change to unfair terms in contracts. In particular, the key elements of a contract, including price, may be assessed for fairness unless they are transparent and brought to the consumer’s attention. Previously, the terms were merely required to be in ‘plain language’.

Conclusion

The main purpose of the new CRA is to consolidate the majority of the previous legislation into one single statute. However, it is important to take note of the above changes introduced by the CRA. Businesses should strive to revise their standard terms and sale documents accordingly.

July 2015 Budget: key employment announcements

The Chancellor of the Exchequer, George Osborne, delivered his first Conservative budget on 8 July 2015. This update summarises the key points of interest to employment practitioners, which include:

  • The introduction of a new National Living Wage, which is a premium on top of the existing National Minimum Wage for workers aged 25 and over.
  • A consultation on the simplification of the tax and NICs treatment of termination payments.
  • A consultation on the IR35 legislation, and the tax treatment of personal service companies.

National Living Wage
The government wishes to see a higher wage for more experienced workers and so is introducing a premium for workers aged 25 and over, known as the National Living Wage (NLW). This will be over and above the National Minimum Wage (NMW) which will remain in place. The government will set the first premium in April 2016 at 50p which will increase the total NLW to £7.20.
(See HM Treasury, Summer Budget 2015, paragraph 1.120.) Continue reading “July 2015 Budget: key employment announcements”

News from IDS Brief: Risk of public believing allegations did not justify anonymity

In BBC v Roden, the EAT has held that a tribunal was wrong to take into account the risk of the public believing in the truth of unproven allegations of sexual harassment against an unfair dismissal claimant when deciding to extend an anonymity order. The public interest in open justice in such a case outweighed the individual’s right to a private life. Continue reading “News from IDS Brief: Risk of public believing allegations did not justify anonymity”

Legislation updates

Clauses for a new Scotland Bill published

The UK government has published draft clauses on part of a new Scotland Bill, which will implement the recommendations in the Smith Commission’s report that was published in November 2014.

The most significant proposal from an employment law perspective is clause 25, under which power is devolved to the Scottish Parliament in relation to the administration and management of employment tribunals. The devolved powers will be limited to ensure that consistency in the practice and procedure between the Scottish tribunals and the tribunals in England and Wales is maintained, but it will potentially give the Scottish Parliament power to change tribunal funding or abolish tribunal fees altogether.

Source: Scotland Office: Scotland in the United Kingdom: An enduring settlement (22 January 2015).

National Minimum Wage Regulations 2015 laid before Parliament

The draft National Minimum Wage Regulations 2015 have now been laid before Parliament and will come into force on 6 April 2015.

The published regulations contain minor amendments which did not appear in the draft National Minimum Wage (Consolidation) Regulations. These are amendments to the wording of regulations 23 and 27 (in relation to salaried hours work) and an additional regulation (now regulation 54) dealing with traineeships in England. The National Minimum Wage (Amendment) Regulations 2014 had already amended the current legislation so that a worker does not qualify for the national minimum wage for work done as part of a traineeship programme.

Source: Draft National Minimum Wage Regulations 2015.

Small Business, Enterprise and Employment Bill has been republished

The Small Business, Enterprise and Employment Bill 2014-2015 has been republished having completed committee stage in the House of Lords. While several amendments relating to whistleblowing, the national minimum wage and zero hours contracts were debated, none made it into the Bill. There is a minor amendment to the power to make regulations requiring the repayment of exit payments, which ensures that the power extends beyond the Treasury to Scottish ministers.

During the debate, the Parliamentary Under-Secretary of State for Business, Innovation and Skills indicated that the review into employment status, which was launched by the government in October last year, is still on track to conclude in March 2015.

Sources: Hansard, House of Lords Grand Committee, 26 January 2015, column GC1 and Small Business, Enterprise and Employment Bill 2014-2015.

Practical Law Employment, 30 January 2015

Looking forward to developments in employment law in 2015

Introduction
This article discusses expected developments in employment law during 2015. Some of the measures discussed represent settled intentions on the part of the Government; while others, at the time of writing, are only proposals that are yet to be defined or refined. Continue reading “Looking forward to developments in employment law in 2015”

Obesity may be a disability

The ECJ has agreed with Advocate General Jääskinen that there is no general principle of EU law prohibiting discrimination on grounds of obesity. However, obesity may fall within the definition of disability under the Equal Treatment Framework Directive (2000/78/EC). It will if it entails a limitation resulting, in particular, from long-term physical, mental or psychological impairments which, in interaction with various barriers, hinder a worker’s full and effective participation in their professional life on an equal basis with other workers. Continue reading “Obesity may be a disability”

Unilateral variation: change to notice period can have an immediate impact

Mere delay might, of itself, be neutral in determining whether an employee can be said to have accepted a change in contractual term made unilaterally by the employer. However, in considering whether an employee’s continued working without objection amounts to an acceptance of that change, a tribunal can have regard to (1) the immediacy of the impact of the change, eg a reduction to the notice entitlement could have an immediate impact in terms of job security, (2) whether the change in question was the only change or part of a whole package of changes, (3) the length of the period of delay, and (4) the claimant’s individual circumstances, eg if he held a trade union role and could be expected to appreciate the detail of the new term and raise any queries that arose. EAT: Wess v Science Museum Group.
Continue reading “Unilateral variation: change to notice period can have an immediate impact”

BUDGET SUMMARY 2014

The combination of late Autumn Statements and early spring leaks has left recent Budgets largely devoid of surprises. Most pundits believed that the 2014 Budget would follow this trend, if only because the Budget deficit in 2013/14 was still £108 billion. However, George Osborne proved them wrong and revealed a range of initiatives that had successfully been kept under wraps.

The reforms proposed to pensions, reducing the role of annuities, will change retirement planning significantly and have already had an impact on the value of insurance company shares. Some aspects of the new pension framework remain unclear, in particular the treatment of defined benefit (final salary) schemes.

The Chancellor also set out a new structure for ISA savers. Instead of introducing a cap on total ISA investment, as was rumoured last summer, Mr Osborne will increase the annual contribution limit to £15,000 from
July 2014. In addition, he will effectively scrap the current distinction between cash ISAs and stocks and shares ISAs.

The changes to the size and rate of the starting-rate income tax band from 2015/16 were also surprises for savers, although only about 1.5 million people are expected to benefit. Ironically, what was widely leaked as the good news of the Budget (and its most costly) – a further increase in the personal allowance to £10,500 in 2015/16 – almost went unnoticed among the Chancellor’s reforms.

DOWNLOAD OUR FULL BUDGET REVIEW HERE (pdf, 619kb)

Some Highlights;

• Radical reform of pensions, effectively introducing flexible drawdown for all defined contribution schemes.

• Major relaxations to the rules for turning small pension pots into cash lump sums.

• Reform of ISAs, with a new £15,000 annual contribution limit and full transferability in both directions between stocks and shares and cash.

• The savings tax rate reduced from 10% to 0% and the savings rate band increased to £5,000, both from 2015/16.

• The personal allowance is increased to £10,000 for 2014/15 and to £10,500 for 2015/16, with small reductions in the basic rate band for both years.

• The transferable tax allowance for married couples is set at £1,050 for 2015/16.

• The annual investment allowance (AIA) is doubled to £500,000 and there is a one-year extension of the higher AIA to 31 December 2015.

• Seed enterprise investment scheme (SEIS) is made permanent and new rules are introduced for venture capital trusts (VCTs) and enterprise investment schemes (EISs).

• Higher premium bond investment limits and, from January 2015, a new series of National Savings & Investments fixed rate bonds for people aged 65 and over.

We hope that this summary proves useful and, if any of the areas discussed seem likely to have an impact on your personal or corporate plans, we would urge you to contact us so that we can help guide you.

Best wishes

Yours sincerely

Levy & McRae

DOWNLOAD OUR FULL BUDGET REVIEW HERE (pdf, 619kb)

Appeal Court overturns conviction – successful appeal of rejection of due diligence defence under Licensing (Scotland) Act 2005

The Appeal Court today set aside the conviction of the Epic Group Scotland Limited who convicted at Aberdeen Justice of the Peace Court for selling alcohol to two persons under the age of eighteen. Epic relied at trial on the statutory defence in Section 141B of the Licensing (Scotland) Act 2005 that they had exercised all due diligence. There was evidence that Epic had provided all of their staff, not just bar staff, with the required training, that they operated a Challenge 25 policy, amongst other measures at the premises. The Appeal Court found the Justice had erred in rejecting the defence of due diligence and the Appeal Court quashed the conviction.