Woman working at a desk

Out with the old, in with the new

2016 provided a few significant changes to employment law. This article views some of the more prominent features that has shaped employment law throughout the year with ongoing issues that are likely to crop up in 2017.

1. New Year, New Business Plan: Are people in it?

So we are heading in to a new year. I bet you’ve got a business plan? Or something on paper which maps out where you want the business to go over the next three to five years? You may even have an exit strategy that you’ve deliberated long and hard over and identified a trigger within it, which will determine whether and when you sell or not. But have you got a people strategy? Have you identified how your people will deliver your business plan? Possibly not and you wouldn’t be alone. We meet with a range of businesses who are entirely clear on the direction of travel and growth for their business but they haven’t always identified how they’re going to recruit, retain and drive their people to deliver it.

Why have an HR strategy?

An HR strategy is about aligning your people and their functions to the overall aims and objectives of the Company.

An HR strategy will identify the potential impact of the business’ strategy on the people, and highlight the HR priorities necessary to execute and implement the business strategy. It outlines how the people will deliver the business objectives.

What’s the value to the business?

One of the key success factors of high performing organisations is putting their people first.  HR priorities aligned with your business goals will help your business achieve financial and commercial objectives a lot quicker and more effectively than without. It will also enable you to communicate a clear message to teams and employees about what is expected of them.

Top 5 tips to developing your HR strategy

  1. Keep it simple
  2. Translate the organisation’s objectives into an actionable HR plan
  3. Identify the practical HR initiatives that will help deliver the plan
  4. Focus on value-adding activi­ties to support the execution of the business objectives
  5. Make it happen, report on and review its effectiveness

How we can support

Our expertise within our Employment and HR team enables us to support employers in developing an effective and meaningful HR strategy. Working closely with our clients to understand their business, we can develop a strategy with realistic recommendations to ensure your people are aligned with the direction of your business.

For more information on our HR consultancy offering please contact Bex Sinclair, Head of the HR Consultancy Team on 0345 209 1831 or email bex.sinclair@clarkewillmott.com

2. Gender pay gap

Businesses with more than 250 employees will have to report on their gender pay gap differences, starting with a snapshot in April 2017. From April 2016, business should have been monitoring their bonus awards so that they are able to generate the snapshot report ready for April 2017.

One to watch in 2017…

A large group of employees working for Asda have made a claim for equal pay which will be an eagerly awaited decision.

3. National Living Wage and National Minimum Wage

The National Living Wage was introduced from April 2016 increasing the pay of an individual over the age of 25 from (at the time) £6.70 an hour, to £7.20 an hour.

From 1 April 2017, the national minimum wage and living wage will be aligned to increase in April every year instead of in October. The rates will be set as follows:

Age 25+ £7.50
Age 21-25 £7.05
Age 18-20 £5.60
Age 16-17 £4.05
Apprenticeship £3.50

4. Employment status and the ‘gig economy’

In 2016, the ‘gig economy’ was shaken with the decision in the Uber case which held that Uber drivers were ‘workers’ and not self employed. This therefore entitled them to rights, such as National Living/Minimum Wage and holiday pay. We are likely to hear the appeal for this case in 2017.

5. Tax-free childcare

During early 2017, tax free childcare is expected to be introduced. Tax-free childcare will start to replace the current childcare vouchers which is expected to be abolished by 2018. In order to receive the tax-free childcare, parents will have to open an online account. They will then pay for childcare from a registered provider directly from the online account. Every £8 that a parent pays in, the government will pay an extra £2 (up to a maximum of £2,000 per year (£4,000 for disabled children). However, the tax-free scheme will not be available to anyone who is claiming tax credits or universal credits or to any parent that earns more than £100,000 per year or less than £115 per week.

6. Apprenticeship levy

UK employers with annual wage bills of more than £3 million are expected to pay 0.5% levy on their total bill for the cost towards of apprenticeship training less a “levy allowance” of £15,000. These employers will need to join the digital apprenticeship service to access the funding

This means that large employers will be able fund apprenticeships with access to the levied amounts and a government top-up of 10%.

Small companies, on the other hand, will not be required to use the digital apprenticeship service until at least 2018 but will still be able to receive funding provided that they contribute 10% towards the cost of the apprenticeship.

7. Holiday pay

In 2016, the decision from Lock v British Gas confirmed that holiday pay should include commission and Bear Scotland Ltd v Fulton concluded that it should also include overtime. It is suspected that British Gas will appeal in 2017 to the Supreme Court.

8. Monitoring social media

In 2016, it was held in Barbulescu v Romania that an engineer that was dismissed for personal use on Yahoo Messenger was dismissed fairly. Mr Barbulescu had claimed that this was a breach of his right to privacy, but the court held that the actions of the employer were a proportionate means of achieving a legitimate aim. This case has been appealed which will be heard in 2017.

9. Shared parental leave

2016 gave rise to the first shared parental leave case, which found that it was discriminatory to offer an enhanced pay benefit for the mother in the company’s shared parental leave policy, but not to offer the same benefits for their partner (in this case the father) taking SPL.

10. ACAS Code

2016 gave the confirmation on the circumstances in which the ACAS code of practice arises. In Phoenix House Ltd v Stockman, the EAT confirmed that the ACAS Code of Practice does not apply to dismissals that are based on ‘some other substantial reason’, whilst the case of Holmes v Qinetiq held that the Code did not have to be applied in dismissal for genuine ill health where there was no issue of poor performance.

11. Brexit – one to watch!

Article 50 of the Treaty is likely to be triggered withdrawing Britain from Europe and the British Bill of Rights may be consulted on. We will be providing updates throughout the year as new developments arise.