October Changes: A Raft of New Legislation For Businesses

A raft of new legislation for businesses: The Deregulation Act, new National Minimum Wage Rate, Slavery and Human Trafficking Statements and the proposed Enterprise Bill and Immigration Bill.

  • The Deregulation Act was brought in on the 1 October 2015 and will end the current powers of the employment tribunals to make wider recommendations in successful discrimination cases will be repealed. The Act will also expand the right for Sikhs to wear a turban instead of a safety helmet to almost all workplaces in Great Britain. However, there will still be limited exceptions for specific roles in the military and emergency services.
  • New National Minimum Wage rates will also come into force on 1 October 2015. The rate will rise to £6.70 per hour for those over 18.
  • The Modern Slavery Act is expected to come into force this month and requires large businesses to publish a slavery and human trafficking statement each year, setting out the action they have taken to ensure their supply chains are slavery free.
  • The Enterprise Bill, introduced earlier this year and due to have its second reading later on this month proposes an introduction of a cap on exit payments made to public sector workers to end the reported six-figure payoffs.

    There is also a proposal to regulate the word "apprenticeship" to cover only government-accredited schemes and increasing the number of public sector apprenticeships offered. This would put a stop to employers trying to exploit younger workers on the lower apprenticeship wage.
  • The Immigration Bill proposes extending the existing criminal offence of “knowingly” employing an illegal worker, so that it will now also apply where an employer has “reasonable cause to believe” that someone is working illegally. The offence will carry with it potential imprisonment (which will, going forwards, be increased from two to five years) and an unlimited fine. This is a significant change as it effectively “lowers the bar” for the criminal offence to be proven. Additional sanctions against employers may include further powers to close down businesses, revoke licences, and prosecutions for persistent offenders.

    The Government has already increased penalties for employing illegal workers, to a maximum penalty of £20K per worker, and it is clear that these penalties are being implemented where appropriate. This month UK Visas and Immigration have published a quarterly report showing that 943 illegal workers were found in the UK between 1 January and 31 March 2015; with £9 million in employer fines being issued during the same period.

    The Bill also adds a new criminal offence of “illegal working”. This will allow the wages of illegal workers to be seized as the proceeds of crime, plus a potential prison sentence of up to 6 months, and an unlimited fine.

    It is more important than ever that employers are aware of their obligations under these immigration rules and the importance of undertaking "right to work" checks on all job applicants during the recruitment process.

    As a reminder, this may also apply when a business is bought/sold. Guidance issued on the UK Visas and Immigration Agency, confirms that transferees, following a TUPE transfer, only have a "grace period" of 60 days post-transfer to carry out appropriate "right to work" checks on the staff they have inherited. This is therefore something employers need to add to their action list, following any TUPE transfer, be it a merger, acquisition, or on winning a contract, leading to a service provision change.

We have a great deal of experience in guiding employers through these issues, please contact us if you need any help in this area.