What do you need to know about this years’ changes to employment law
Along with the usual annual increase in national minimum wage rates and other statutory payments, there is also new employment law legislation coming into force in April 2019.
Increase in National Minimum Wage
The following increases took place from 1 April:
• rate for 25+ year olds (the national living wage) from £7.83 to £8.21 per hour
• rate for 21 to 24 year olds from £7.38 to £7.70 per hour
• rate for 18 to 20 year olds from £5.90 to £6.15 per hour
• rate for 16 to 17 year olds from £4.20 to £4.35 per hour
• rate for apprentices from £3.70 to £3.90 per hour.
Increase in Statutory Payments
The following statutory payments which will also increase in April:
• Statutory Sick pay increases from £92.05 to £94.25 per week on 6 April.
• Statutory redundancy pay – maximum ‘week’s pay’ increases from £508 to £525 on 6 April.
• Statutory maternity, paternity, adoption and shared parental leave pay rates increase from £145.18 to £148.68 per week on 7 April
Increase in maximum compensation for unfair dismissal
The statutory limit on the compensatory award for unfair dismissal increases from £83,682 to £86,444 where the effective date of termination is on or after 6 April 2019.
The maximum compensatory award in an unfair dismissal claim is the lower of the statutory limit or 52 weeks’ actual gross pay at the effective date of termination.
Increase in Vento bands
The bands of awards for injury to feelings in discrimination cases have been updated and will apply to claims presented on or after 6 April 2019.
The new bands are:-
• lower band (less serious cases): £900 to £8,800
• middle band: £8,800 to £26,300
• upper band (the most serious cases): £26,300 to £44,000
Right for all workers to itemised pay statement
From 6 April 2019 onwards, all workers will be entitled to itemised pay statements. Previously, only employees had this right.
In addition, employers will have to show on the itemised payslip the number of hours worked for all its hourly paid workers. It is hoped that this will enable workers to see more clearly whether they are in fact being paid at national minimum wage or national living wage rates.
If you don’t already provide payslips to workers, we recommend speaking to your accountant or payroll provider as soon as possible to make sure that the payroll system complies with these new provisions. From a practical point of view, employers will also need to make sure that they have systems in place to properly record the hours that hourly paid staff are working so that these can be accurately reflected in their payslips.
Right for all workers to itemised pay statement
As from 6 April 2019, the maximum penalty that a tribunal can make against an employer for an “aggravated breach of employment law will be increased – quadrupled, in fact – from £5,000 to £20,000.
This is, currently, a very little used penalty that an employment tribunal can award against a respondent employer where the employer is found to have breached a worker’s rights and that breach has “aggravating” features – such as where the breach is deliberate, or malicious or where there has been a repeated breach of the right.
This change is part of the government’s strategy which is to strengthen the enforcement powers of tribunals to tackle particularly rogue employers.
Beyond April 2019 – Important cases on the horizon
In May 2019, the Court of Appeal is due to hear the case of Capita Customer Management Limited v Ali & Anr. In this case, Mr Ali claimed he had been directly discriminated against because of his sex when his employer failed to offer him enhanced shared parental pay, where there was an internal policy offering enhanced maternity pay to women. Although Mr Ali won his case in the Employment Tribunal, on appeal, the Employment Appeal Tribunal held in April 2018 that as long as the shared parental leave policy was the same for both men and women taking shared parental leave, there was no sex discrimination. The appeal against this decision is due to be heard by the Court of Appeal imminently and we will report on the outcome in our fortnightly newsletter.
Also, in May 2019, the Court of Appeal is due to consider the appeal in the case of Flowers v East of England Ambulance Trust. This was a case where the Employment Appeal Tribunal ruled that payments made for voluntary overtime that is regularly worked must be included when calculating holiday pay for the first four weeks of holiday. The Court of Appeal is likely to consider the recent decision of the European Court of Justice in Hein v Albert Holzkamm GmbH & Co, which suggested that pay received for overtime work need not be taken into account in calculating holiday pay unless the worker is contractually obliged to work overtime.
No update on imminent employment law changes would be complete without mention of the “B word”.
The general consensus is that Brexit – if it takes place – is unlikely to have an immediate impact on employment law. The government has said its intention is to protect and enhance worker’s rights after the UK exits the EU and to ensure that EU-derived employment rights remain aligned with EU law after exit day.
The greatest practical implication for employers remains the likely change to the right of freedom of movement of EEA nationals.
It is possible that, after Brexit, the government may take the opportunity to amend some areas of employment law to reduce the regulatory burden on employers. However, this is likely to be pretty far down on the government’s agenda and therefore, all in all, from an employment law perspective it will be business as usual on Brexit.