February 4, 2016

It’s that time of year again. The holidays are long gone and the excitement of the new year has quickly faded now the frost has finally caught up with us. What better time then for a quick preview of some of the upcoming employment and HR developments that are expected over the next year. You never know, perhaps there’s something to look forward to?

• Gender Pay Regulations – In March, the Government is expected to introduce regulations to assist tackling the gender pay gap that is still prevalent in many businesses across the UK. It’s not clear yet what the regulations will involve although it’s expected they will require all private employers with over 250 employees to publish details of employee pay annually (including the difference between average basic pay, total average earnings and bonuses) or face a fine of up to £5,000;

• National Living Wage – From the start of April, workers aged 25 or over will need to be paid the National Living Wage which is essentially a higher rate of minimum wage and is expected to start at £7.20 per hour. For businesses operating on tight budgets, this has the potential to cause significant headaches;

• Termination Payments – Later in 2016, a response to the Government’s consultation on termination payments is expected. One proposal is to remove the current £30,000 allowance and replace this with a general tax exemption for redundancy payments at a rate rising in line with length of service. If this goes ahead, it could substantially limit the scope for tax advantageous exit arrangements which may give employers one or two less carrots to dangle in tricky situations. We’ll be keeping a close eye on this;

• IR35 – Also under consultation are proposals from HMRC to improve the efficiency of the IR35 legislation in reducing the tax and NIC advantage for individuals engaged through personal services (loan out) companies. An option on the table includes increased involvement by end-users in ensuring the correct amount of tax is paid. This would effectively strip such arrangements of their most useful advantage which would be especially significant for media businesses given the prevalence of loan-outs. There’s no firm timescale for a response but it does seem inevitable that a development in this area is incoming during this parliament; and

• Tribunal fees – a final appeal to the Supreme Court challenging the legality of employment tribunal fees is expected to be heard at some point in 2016. So far, the Government has successfully resisted the challenges to the employer friendly fee system but there is mounting evidence suggesting access to justice has been seriously affected by the fee regime. It’s therefore possible the Government might find things a little harder at the next hearing.
  So a varied mix on the horizon but sadly little to help bring back the festive cheer. However, these aren’t the only things to mention as it would be fair to say the year has already started off with a bang. I’m talking about the heavily publicised European case last week regarding the monitoring of employee emails.

The employer in question was guilty of looking at private messages sent by an employee through a work-related Yahoo messaging account for the purposes of investigating a disciplinary matter. This ultimately led to the individual being fired. The local courts in Romania upheld the employee’s dismissal and European Court of Human Rights said that the monitoring and use of the personal messages was a proportionate interference in the employee’s right to privacy. While this decision is of course useful for employers, despite what some of you may have read in the press the case does not give employers an open ticket to snooping on employees’ personal internet use. It will therefore still be important to tread carefully in this regard.

Please contact Seth Roe if you would like any further information about any of the above.