Employment Law: Looking forward to 2015

Zero-hour contracts

What is it?

There is cross-party consensus that there needs to be tightening of legislation in the use of zero-hour contracts to prevent companies and organisations exploiting them to their advantage whilst avoiding the ‘usual’ employer obligations to its employees. Proposals include automatic full contracts after being on a zero-hour contract with a company for a year and a ban on ‘exclusive’ zero-hour contracts.

How could it affect you?

For many employers it will not affect them a great deal because they already employ staff on zero hour contracts, who are considered to have the status of ‘workers’. This means they already have access to certain entitlements such as the national minimum wage and to holiday pay.  However, owing to the pattern of work over time, a zero hours worker can enhance their status to that of an employee and thus gain additional rights, such as the right to statutory notice and the right to maternity leave or pay.  Upon becoming an employee, both parties should have the contractual arrangement formalised, outlining the terms of employment.
Failure to do so means that the uncertainty that exists in the relationship can lead to employment claims.

Social mobility

What is it?

As ever, this will be high on the list of pre-election policies of the political parties seeking (re)election. The main employment law issue is the level of the national minimum wage. There are campaigns to encourage businesses (especially London -centric businesses) to offer the Living Wage as a minimum. In November, Boris Johnson announced that the Living Wage for London was set to be increased to £9.15 per hour whereas the minimum wage is £6.50 per hour.

How could it affect you?

The national minimum wage (which is legally enforceable) increases year on year, however there is increasing pressure to offer the minimum living wage, thereby increasing costs for small employers, but offering a bargaining tool for employees at the lower end of the pay scale.  The key difference is that whilst the minimum wage is enforceable, the Living Wage is not.

Indeed, not all employers comply and only 1,000 employers are accredited organisations.  Research by KPMG has found that 5.28 million UK workers are paid less than the Living Wage.  However, social and political pressure can be as effective as a legal requirement.  Last year, London cinema workers who campaigned for the London Living Wage for twelve months, were awarded it, but then told that in order to pay for it, jobs would be lost.  Following a well-organised media campaign, further strikes and a negotiated settlement through ACAS, Cineworld has now agreed to an immediate pay rise, followed by a further rise to the level of the London Living Wage by September 2015.

Obesity as a “disability”

What is it?

It is common knowledge that UK law develops as a result of decisions taken in “Europe”.  In December 2014, the ECJ declared that obesity which hinders “full and effective participation” at work may fall within the definition of disability under the Equal Treatment Framework Directive. The ECJ found that it is not obesity itself which is a disability but that it could be, to the degree that it entails a limitation resulting from long-term physical, mental or psychological impairments which hinder a worker’s full and effective participation in their professional life on an equal basis with other workers.

How could it affect you?

As such, discrimination due to impairment resulting from obesity may now fall under discrimination legislation, which imposes a duty on an employer to make reasonable adjustments to premises or working practices where an employee (or a job applicant) who is disabled, is placed at a substantial disadvantage. Failing to comply with this duty is a form of disability discrimination. Even if there is not a discrimination issue to consider, employers also need to be aware of the need to uphold dignity at work and to avoid bullying and harassment, for which they can be vicariously liable.

1 January 2015: Bonus claw-back

What is it?

From 1st January 2015 the proposed rule on bonus claw-back will come into force and will be applicable to regulated companies.

The PRA proposals include the requirement for all PRA-authorised companies to amend employment contracts, to ensure variable remuneration (that is, a bonus award) that has vested can be clawed back from an individual in the circumstances set out below.  The rules apply to any variable remuneration awarded on or after 1 January 2015, which will be subject to clawback for at least seven years from the date on which the variable remuneration is awarded.

Under the proposals, companies will be able to clawback vested variable remuneration in the following circumstances:

1. Where there is reasonable evidence of employee misbehaviour or material error.

2. Where the firm or the relevant business unit suffers a material downturn in its financial performance.

3. Where the firm or the relevant business unit suffers a material failure of risk management.

How could it affect you?

As mentioned above, the PRA will expect employers to take all reasonable steps to vary relevant employment contracts. This is likely to be resisted strongly by individuals and where consent is not forthcoming, employers will need to think very carefully whether to impose the change.

5 April 2015: Shared parental leave

What is it?

The new Shared Parental Leave regime commences with children born or adopted on or after 5 April 2015.  We will be covering these changes, alongside other ‘family friendly’ changes at our Family Friendly Rights in the Workplace Breakfast Seminar on 29 January, and additional information will be available on our website after that date.

May 2015: Fit for work service

What is it?

From May, we will see the introduction of a new health and work assessment and advisory service, dubbed “Fit for Work service” by the Department for Work and Pensions, which has as its aim the offering of state-funded occupational health assistance for employers, employees and GPs.

According to the Department for Work and Pensions, “[It] is free and helps employees stay in or return to work… [It] will complement, and not replace, existing occupational health services provided by employers. It will fill the gap in support that currently exists and will especially benefit those employers who currently have limited in-house occupational health services.”

Essentially, the scheme will provide:

1. Free health and work advice through its website and telephone advice line to help with absence prevention.

2. Free referral for an occupational health assessment for employees who have reached, or whose GP expects them to reach, four weeks of sickness absence.

The Department for Work and Pensions has also introduced, from 1st January, a tax exemption where employers fund the costs of medical treatments recommended by a healthcare professional as part of either Fit for Work or any employer-arranged occupational health service.

How could it affect you?

The short answer is that it doesn’t have to. Employers will not be obliged to refer employees to Fit for Work nor to follow the recommendations highlighted by the Department for Work and Pensions. However, it is recommended to update your sickness absence policies to reflect the availability of the scheme.

On a related point, the Court of Appeal will consider next month (February 2015) a case on the impact of an individual’s disability in relation to calling them to account for absence under a disciplinary policy, for breach of an attendance policy (Griffiths v Secretary of State for Work and Pensions).

1 July 2015: Holiday claims limitation

What is it?

The Government has announced legislation to limit retrospective holiday pay claims to two years – to take effect for claims presented on or after 1 July 2015.

Following the decision in Bear Scotland v Fulton with regard to the inclusion of non-guaranteed overtime to be included in calculations for holiday pay, the government has announced plans to legislate in order to cap any claims for unlawful deductions to two years. Following the case, the limitation on claims was only to the extent that there had to be an “un-broken chain” of unlawful deductions. Such a chain of deductions would be broken by a period of three months or more employment without any such deductions.

How could it affect you?

Employers will be relieved that there is to be a statutory cap on claims going two years back.  However, current claims will have been lodged by July and the statutory change will not affect these claims.

Conclusion 
These are just some of the issues in the workplace which will develop over 2015.  We will be following them and will publish further information on a regular basis.
You can also follow us on Twitter @MemeryCrystal

Merrill April