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5 Employment Law updates that may affect your business


1.  On 11th January 2016 the Exclusivity Terms in Zero Hour Contracts (Redress) Regulations 2015 came into force.  Dismissal of a zero hour employee will now be deemed automatically unfair if the principal reason for dismissal is that the employee has breached a contractual clause prohibiting them from employment with another employer.  It should be noted there is no qualifying period for bringing an unfair dismissal claim in this instance.

2.  Gender Pay Gap Reporting – From April 2017, under the draft Regulations, employers will be required to publish information on their gender pay gap and gender bonus gap on an annual basis. The bonus information must be based on the preceding 12-month period, beginning with the 12 months leading up to 30 April 2017. Employers will have 12 months in which to publish the information, meaning that first publication will be required in or before April 2018.  Employers will also be required to publish how many women and men currently in employment are in each pay range.  The full report must be published on the employer’s website every year and left there for at least three years and the information must be uploaded to the government.  Employers who fail to do so will be highlighted in new league tables.

3.  British Gas have been unsuccessful in their appeal against Mr. Lock regarding whether commission payments should be included when calculating holiday pay.  It should be noted that British Gas will seek permission to appeal the decision in the Court of Appeal however, in the meantime the message for employers is that, for the time being at least, it remains the case that results based commission which is paid to an employee, which is not dependent upon the amount of work done in their employment, must be taken into account when calculating holiday pay.

4.  The Department for Work and Pensions has announced the auto enrolment qualifying earnings band and earnings trigger.  The thresholds are reviewed each year and revised if appropriate, taking into account the prevailing thresholds for National Insurance contributions, PAYE personal tax allowance, basic state pension, inflation and any other factors that the Secretary of State considers relevant.  Both the earnings trigger and lower band remain fixed however the upper earnings limit has risen.  These are in line with the earning limits for National Insurance purposes.

For the tax year 2016/17 the bands will be as follows:-

*Upper band £43,000

*Lower band £5,824

*Earnings Trigger £10,000

The draft order also confirms the correct rounded amounts which employers should use for pay reference periods of lengths ranging from one week to six months. The draft order is due to come into force on 6 April 2016 subject to parliamentary approvals.

5.  With effect from April 2016 financial penalties can be imposed on employers who do not pay tribunal awards or who fail to pay settlements agreed under COT3 settlement forms.  A warning notice will be issued by an enforcement officer stating that unless the sum due is paid within 28 days a financial penalty will be imposed. If the sum due is not paid within that 28 day period then a penalty notice will be issued which will require the employer to pay a financial penalty equivalent to 50% of the original award to the Secretary of State. This amount will be subject to a minimum of £100 and a maximum of £5,000. If the employer, within 14 days, then pays both the original award to the claimant and the financial penalty to the Secretary of State, the financial penalty is reduced by 50%.