Employment Law New Year Resolutions

2015 looks like being a challenging year for businesses; between legislative reforms, important cases and the uncertainty of a general election there are likely to be many employment law issues that employers will need to get to grips with in the months to come.

Here are our New Year resolutions to help you make sure you’re ready for whatever 2015 brings.

Employment Law New Year Resolutions

Make sure your employment documentation is up to date and reflects the current needs of your business

With the start of 2015, now is the time to turn over a new leaf and make sure your staff handbook and employment contracts meet your requirements and reflect any recent legislative changes.  

For example, you may need to make changes to your documentation to reflect:

•    The recent EAT judgment dealing with holiday pay;
•    The new shared parental leave regime;
•    The new rights of employees to request flexible working.

Making sure you have the right policies and procedures in place, and well drafted employment contracts can help avoid issues with employees in future.

Protect your business

Use the New Year as an opportunity to make sure that you have protection for your business interests and confidential information.  

If you don’t have existing provisions, give some thought to what risks a departing employee might pose to your business; would they be able to damage your business interests if they approached your clients/customers?  What about if they convinced other employees to leave? And what sensitive information do they have; do they have access to your pricing details/customer information?  Have you taken steps to prevent employees from using this information should they decide to resign, or if you decide to dismiss them?  Well drafted, tailored provisions are vital if you want to try and protect your business when employees leave.

Now is also a good time to review any post termination restrictions and confidentiality clauses you may already have in place.  Whilst you may have existing provisions it is important not to be complacent and you should still review them to make sure they are appropriate; for example, your business may have changed since they were first drafted.  In addition, case law may have moved on as to what the Courts are likely to find enforceable.  You also need to make sure that any provisions remain appropriate in the context of staff promotions or changes in role.   The New Year is a perfect opportunity for reviewing your protection and making sure that you are comfortable with what you have in place.

Holiday pay

Given the recent EAT judgment regarding the calculation of holiday pay; this has been a hot topic over the last few months.  

With the forthcoming hearing in the Lock case (which will give further guidance on the payment of commission during periods of holiday) and the flurry of cases we expect to see from workers and their unions in relation to unpaid holiday pay, this is likely to remain a key issue for businesses to grapple with throughout 2015.

Now is a good time to review your existing arrangements for overtime, commission payments and any other “special” payments to staff (shift premiums, acting up rates etc) to determine whether you have been paying holiday pay correctly.  

If not, you will need to come up with a strategy, both for future periods of holiday and in relation to historic payments.  Depending on your particular arrangements, your strategy might be to start making additional payments for staff on annual leave, or it may be to hold fire and wait for further clarification of your legal position; either way, making an assessment of your legal and commercial position is vital for making an informed decision about how best to proceed.

Collective consultation

The judgment in the USDAW case is expected at some point in 2015 and is something that many employers will await with interest.

This is a potentially significant case for any employers looking to make redundancies or reorganise their business in 2015.

It will provide clarification on how the collective redundancy legislation should be interpreted in the context of multi-site redundancies by giving guidance on when employers are obliged to collectively consult with their employees.  However, given the statutory definition of “redundancy” in this context, this case has wider ramifications regarding when collective consultation obligations are triggered, for example, in the context of changing terms and conditions across the workforce.

All in all, this is definitely a case to watch.

Shared parental leave

The new legislation dealing with shared parental leave came into effect on 1 December 2014; however, its impact is unlikely to be fully felt until early next year, as the new leave is only available for parents of children due to be born or placed for adoption with them on or after 5 April 2015.

The provisions are complicated and employers are likely to face practical difficulties in dealing with leave requests; challenges are likely to arise given that employees will want to co-ordinate their leave requests with their respective employers and from the fact that employees can effectively move in and out of the shared parental leave regime (which may lead employees to use it to take several shorter periods of leave). One of the questions we anticipate an employee asking their employer is what arrangements (if any) are in place in relation to the payment of enhanced pay during these periods, and employers will need to be ready with a clear answer on this point.

In the circumstances, employers should consider adopting a comprehensive set of policies covering family friendly rights (maternity, paternity, adoption, surrogacy and shared parental leave).  This will ensure a consistent approach and help prevent any potential problems arising (for example any double recovery of enhanced payments).  

Even if you decide that you do not want to implement a specific policy in this area, you will still need to have an understanding of the regime to ensure that any requests are dealt with properly and in line with the statutory requirements. This will ensure you avoid any claims arising from a breach of the provisions or, more generally, any suggestion of unlawful discrimination.

Zero hours contracts

Following significant political activity in this area, 2015 is going to see restrictions on how zero hours contracts are used.  The current proposals involve prohibiting employers from imposing exclusivity terms i.e. restricting employees on zero hours contracts from working for other businesses.  The government has also indicated there is going to be anti-avoidance legislation to try and prevent employers from finding legal loopholes that would defeat the purpose of this legislation.

The government has been consulting on its proposals and the most recent raft of consultation closed on 3 November 2014.   We are expecting the new legislation, along with accompanying guidance on the fair use of zero hours contracts, to be published and implemented over the next year.

However, indications are that this will not happen before the general election; in the event of a change in Government (or the balance of power) these proposals may well be subject to review.  The Labour party has, for example, indicated that it would prefer to see a more extensive “crack down” on the use of these contracts which, if implemented, would give zero hours employees a number of additional rights.

Immigration

As things stand, immigration has all the hallmarks of being a key election issue.  The outcome of the general election is therefore likely to have both immigration law and employment law implications.  

Whilst this may seem to be a “niche” area, it is something which all employers need to have an awareness of (whether or not they specifically employ migrant staff); all employers have an obligation to check that their employees have the right to work in the UK and any employer can face an audit from the immigration authorities at any time to inspect these checks.  If an employee does not have the right to work in the UK, it is unlawful for them to be employed by you and all employers are under an obligation not to discriminate on the grounds of race or nationality.  Of course, employers who sponsor migrant staff have additional specific legal obligations which they must comply with.

Recent cases confirm that employers have legal obligations towards employees even where they are working illegally; the case of Hounga confirmed that even where an employee had entered the UK dishonestly and had no right to work in the UK, she could still bring a race discrimination claim against her employers.  

With all of this in mind, now is a good time to audit your right to work checks and make sure that you are carrying out the checks properly (and that you are documenting them).  This is essential to avoid the risk of civil or criminal penalties for employing illegal workers. You may want to consider a specific policy for how you carry out these checks; in any event, you should make sure that all managers who have responsibility for recruiting employees understand what they need to do to comply with your legal obligations.

If you are a registered sponsor (or intend to make an application to become one), now is a good time to make sure that you understand your obligations and, where applicable, that you have been complying with them.  Again, a review of your practices and training for key personnel can make sure that you avoid any potential legal risks, the negative publicity of failing to comply with your legal obligations and, in some cases, the commercial impact of having your sponsor licence withdrawn.

If you would like to discuss any of the topics raised in this article in more detail, please contact Gareth Roberts or any member of the Employment team.

Gareth Roberts - Partner, Head of Department
Laura Darnley - Associate
Jennifer Platt - Associate
Chloe Leyland - Solicitor