Mac & Mac – 2019 Employment Law Update

Introduction

The pace of change, in employment law, has arguably slowed down over recent years but with the scrapping of Tribunal fees (for now anyway) and the ongoing uncertainty surrounding Brexit, this area of the law is beginning to look as fast paced as ever!

I therefore thought this would be a good time to keep you up to date with the year ahead! I promise I’ll try not to mention Brexit too much!

The Good Work Plan

You’ll no doubt have seen the various legal challenges, in areas of the “gig economy”, involving Uber, Deliveroo and others. Essentially, certain businesses have sought to categorise personnel as self-employed contractors, rather than workers or employees, thereby seeking to deny those individuals certain rights. Similarly, businesses such as Sports Direct have been attacked for labelling certain staff as “zero-hours” workers, as opposed to employees.

In response to this, and similar creative approaches by business in this area, the Taylor Review was set up. The subsequent government “Good Work Plan” was then established and some of its recommendations will start to work their way through from this year.

• For example, from 6 April 2019, there will be an increase in penalties for aggravated breaches of employment law from £5,000 to £20,000.
• Furthermore, from April 2020, a written statement of particulars will have to be given from day one of employment (rather than two months) and certain additional information will require to be included. Crucially, such right will be extended to all workers (rather than just employees).
• Lastly, the period for determining an average week’s pay (important for reasons including the calculation of holiday pay) shall also increase from 12 to 52 weeks, also in April 2020.

Payslips

Although not arising out of the Good Work Plan, similar themed legislation happens to be taking effect, from April 2019, in respect of Payslips. From this point, all payslips must state the number of hours being paid where wages vary according to time worked. In addition, all workers (not just employees) will have a right to a written pay statement and the ability to enforce that right before a Tribunal.

Brexit & EU Nationals

While the possible scenarios are still too various to mention, it is worth noting that the UK government has made it clear that workers’ rights are to be maintained following Brexit (assuming it still happens)! Even if there is a “no deal” Brexit, rather than an agreed transition out, substantive change in the short to medium term therefore appears unlikely.

Where Brexit is certainly going to have some impact, but again depending on whatever type of Brexit may be confirmed, is in the area of the recruitment of EU nationals. It seems likely that the recruitment of EU nationals, following Brexit, will start to be more akin to the current process for recruiting non-EU nationals – though it is still an unknown. For EU nationals here already, the Government has already set up a scheme, although not fully “live” until the end of March, whereby people can apply for either “settled” or “pre-settled” status. Due to the still likely event of some form of Brexit, employers are well advised to engage with this question – including encouraging existing staff to engage with this scheme – as a matter of priority.

Auto-Enrolment Contributions

From April 2019 the minimum contributions for auto-enrolment pension schemes will increase for both employers and employees. Current requirements mean that employers must contribute a minimum of 2%, of eligible workers pre-tax salary to their pension, with the individual contributing 3% themselves. However, under the new requirements, employers and employees will now have to contribute a minimum of 3% and 5% respectively.

Summary

The above represents a run through of some of the main changes ahead and my own view is that the likely impact of Brexit, on employment law generally, has been a little overstated. However, what appears to be receiving less attention – perhaps because the impact and consequent protective measures are not yet fully known – surrounds the ongoing retention and recruitment of EU nationals. This is an issue of crucial importance to the Highlands and, in particular, its significant hospitality sector.

Additionally, we are now seeing tangible legislation surrounding the problem issue of employment status and associated rights. The April 2019 changes, including in respect of payslips, are an initial first stage and proper compliance should take place (for workers and employees). Similarly, April 2020 will inevitably come in quickly, and – whilst I wouldn’t necessarily recommend compliance over a year before time – you should certainly be marking the diary!

Euan Smith is Mac & Mac’s HR Support and Employment solicitor and he acts for a number of businesses in the Highlands. If you have any questions on the above, or have any other query, he can be contacted on 01463239393 or employment@macandmac.co.uk.

January 23, 2019