Top employment law issues for 2016

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Helen Farr, Fox Williams LLP Last Published  04 January 2016

New year brings fresh challenges for business

This is likely to be a year when there is greater focus on gender pay equality, and on more childcare support for parents of children under four. There may be less strike action, but it may cost employers more to ‘exit’ staff. And employers may be given the power to ‘snoop’ on staff lawfully.

Counter-Extremism Bill

In November, the Government announced in the Queen’s speech that it proposes to pass the Counter-Extremism Bill. The legislation will enable employers to monitor employees lawfully in order to check whether an employee is an extremist. Details are scant, but the aim is to prevent extremists from working with children. The proposal raises serious questions for employers, including who qualifies as an extremist, whether it is appropriate for employers to decide this rather than the police, and what redress employees who have been labelled as ‘extremist’ will have against their employer for deciding this is the case. It’s also not clear how this law will dovetail with data protection or discrimination legislation. More detail is awaited.

Termination payments

Employers face increased cost, delay and complexity when ‘exiting’ staff if proposed changes to the taxation of termination payments are introduced. A consultation by the Office for Tax Simplification in October suggested that all termination payments should be taxable, although with some limited exemptions. Currently non-contractual termination payments under £30,000 are paid tax free, so there will be pressure on employers to ‘gross-up’ such payments if the changes go ahead. They could even lead to more disputes. For example, only part of the sum paid to a redundant employee with more than two years’ service will be tax free, and it’s not clear whether payments made as part of a restructuring exercise that does not meet the legal definition of redundancy will be exempt.

Currently employees do not pay tax on any contribution paid by their employer to legal fees when they are asked to sign a Settlement Agreement. The proposals suggest removing this concession which, again, is likely to result in pressure on employers to gross up the contribution.

Childcare and carers

Employers should get ready for developments designed to support working parents. A consultation expected this year should shed light on government proposals for working grandparents to take shared parental leave to care for their grandchildren. The issue raises a number of logistical points for employers that will need consideration once further details are available.

The government is also aiming to ease the burden on working parents by proposing 30 hours of free childcare for parents of children aged between three and four. The response to this consultation should be published later this year.

The European Commission is currently consulting on the challenges to work-life balance faced by carers. The consultation closes on 17 February.

Gender pay equality

Paying women less than men to perform like work has been unlawful since 1970 but the gender pay gap still exists. In July, the government consulted on how to introduce a requirement for employers with more than 250 staff to report their gender pay gap figures, with the aim of eliminating the gender pay gap. Its response is due early this year.

This poses challenges for business including where and how often they should report such data, whether their existing systems can produce it, and whether providing further information on the context of the pay differences should be voluntary or compulsory. Perhaps the biggest issue is whether producing this information will make a difference in achieving pay equality.

Employers should be planning for the change now, which may mean carrying out equal pay audits to assess the extent of any risk of legal challenges arising from publishing such figures.

Trade Union Bill

The Trade Union Bill 2015, currently making its way through Parliament, may be in force by this April. Its key feature is the introduction of a new voting threshold to make strike action less likely in all sectors. A higher proportion voting for strike action will be required for those working in ‘important public services’, including transport and health, both of which have been the subject of strike action recently.

Even if a vote does achieve the new voting thresholds, employers will be able to dilute the impact of strike action. The current ban on using agency workers to cover striking workers will go and the legislation will bring in a new four-month time limit on a strike mandate, after which a new ballot will be required.

Helen Farr is a partner at Fox Williams LLP

For more on top employment law issues for 2016 visit 'Employment law dates at a glance' or 'New statutes and amendments'