Blog Post – What to Expect in 2016
In employment law there is now a well established tradition that come October legal writers, lawyers and HR consultants all start producing articles on the perils posed by the office Christmas party, in much the same way that the shops start selling Christmas cards. Who would have thought that the annual social gathering, aiming to celebrate another year gone by could prove to be such a fruitful subject for blogging? Of course, when people and alcohol are mixed mishaps can occur, particularly if some of those people involved don’t actually get on with each other throughout the other 11 ½ months. Perhaps all these articles are having some effect as we are now well into the Christmas party season and I have not yet had one enquiry, either from an outraged employer or a shamefaced employee about what happened under the mistletoe or around the photocopier. Employees becoming better behaved! That is one headline I do not expect to see.
The other tradition in employment law at this time of year is for articles to be produced either looking back over the year that has just passed or looking forward to what we might expect in the next year. Churchill talked of the need to “keep buggering on” and undoubtedly that is what we will do in 2016, but the issues on our agenda may well include the same ones that have preoccupied us in 2015.
For instance, pension auto-enrolment will continue to affect more and more small businesses. The aim is that all employers should be engaged in the system by 2017 and now the rollout is affecting businesses with less than 50 employees. If as a business you have not yet got to grips with pension auto-enrolment, then now is the time to do so and you should look for your “staging date” which you can find via the website at the Pension Regulator -http://www.thepensionsregulator.gov.uk/en/employers. There are very significant penalties for non-compliance.
Pension auto-enrolment only affects employees and not the self-employed. One of the key questions that will be addressed in 2016 is on the question of what constitutes an employment relationship. This arises from the case of Windle –v- Arada & Another, which was heard in the Employment Appeal Tribunal earlier this year. The case involves two interpreters who performed regular assignments for Her Majesty’s Courts & Tribunal Service, brought claims for race discrimination under the Equality Act against HMCTS. The EAT held that they were not “in employment” and thus were unable to bring their claims for race discrimination. The Court of Appeal is expected to consider whether the interpreters were actually self-employed. That issue turned on whether the interpreters were “subordinate” to HMCTS or whether they were actually engaged as independent contractors. The Court of Appeal is expected to hear that case in July next year.
Throughout this year we have continually stated the importance to clients of having properly drafted contracts of employment and staff handbooks. They can help the employer enormously when correctly drafted because it leaves the employer in control of the relationship and not at the mercy of statutory provisions, e.g. such as in respect of notice periods. However, care has to be taken when amending contracts or staff handbooks, particularly when the latter are said to be incorporated into the contract of employment. It is quite common for contracts to state that the employer can unilaterally vary their terms but that does not give carte blanche to change the terms of employment. The Courts tend to treat flexibility clauses in contracts fairly unsympathetically. Amendments to contracts which significantly restrict the employees’ rights may get short shrift from the Court if challenged. The case of Sparks –v- The Department of Transport, heard in February of this year held that the DoT was not entitled to unilaterally change the terms of its staff handbook. The handbook had been incorporated into its employees’ contract of employment and it was held by the Court that changes could only be made if they were not detrimental to the employee. That case is due to be heard by the Court of Appeal in February of next year and that will be a case we will be keeping a close eye on.
2016 will also see the ongoing saga of Unison’s judicial review challenge to Employment Tribunal fees continuing and despite having lost their challenge in the Court of Appeal, Unison has now sought permission for their case to be reviewed by the Supreme Court. At the same time the Government has promised a formal review of the impact of Tribunal fees and that will be due later in 2016. Unison’s challenge previously failed because the High Court took the view that there was no sufficient evidence to show that specific sectors of the employment marketplace were being unfairly impacted by the fees. Employment Tribunal statistics published in June of this year reported an overall decrease of 52% of single claims in 2014/15 compared with the previous year. Now that the fee system has been in place for over two years there should be sufficient evidence to inform the Government review and whilst I do not think the fees will be abolished, the hearing fee in particular may be reduced.
2016 will also see the introduction of the national living wage from 1 April. That will increase the amount that employers have to pay to their lower paid employees.
The coming year may also see the outcome of the Government’s consultation on simplifying the taxation and National Insurance contribution payments on the termination of employment. The current system of paying the first £30,000 to be free of tax and NI contributions has been in place for many years and the Government is consulting on simplifying the current system and including consideration of whether the current £30,000 allowance should be replaced by an exemption for redundancy, possibly to be linked with length of service and although the review is motivated by a need to simplify the current rules, it is not clear that what would replace what we have now would be any simpler.
In addition to all the above there are bound to be cases that arise through the year that alter the law in one way or another and we will endeavour to keep on top of them and to bring you news as and when they occur. In the meantime, please enjoy your Christmas party. My contact details are below.