Blake Morgan's Employment law update – April 2019 Employment law changes
April is the month when many increases to statutory rates and limits take effect but there are other important changes that employers and HR professionals need to be aware of in the month ahead. Keep an eye out particularly for 6 April 2019 when there are a number of developments.
Increases to Statutory Rates and Limits
1 April 2019
National Living Wage and National Minimum Wage
From 1 April 2019, the hourly rate of the National Living Wage and National Minimum Wage increases:
- For workers aged 25 and over from £7.83 to £8.21
- For workers aged 21-24 from £7.38 to £7.70
- For workers aged 18- 20 from £5.90 to £6.15
- For workers aged 16- 17 from £4.20 to £4.35
- Apprenticeship rate from £3.70 to £3.90
In the Spring Statement on 13 March 2019 it was announced that academics had been appointed to work alongside the Low Pay Commission to consider the latest international evidence and to recommend whether current economic conditions allow for the rate effective from April 2020 to meet 60% of median earnings by October 2020. In addition, the UK's minimum wage policy will be reviewed to consider its impact on employment, productivity and economic growth.
6 April 2019
Statutory Sick Pay
The weekly rate of Statutory Sick Pay increases from £92.05 to £94.25.
Lower Earnings Limit
The lower earnings limit is set each tax year by the government and from 6 April 2019 it increases from £116 to £118 a week.
Employment Tribunal Compensation Limits
Employment Tribunal compensation limits increase under the Employment Rights (Increase of Limits) Order 2019 and:
- The maximum amount of a week's pay, used to calculate statutory redundancy payments and the basic award will increase from £508 to £525.
- The maximum compensatory award for unfair dismissal will increase from £83,682 to £86,444.
It is important to note that these increased limits take effect where the “effective date of termination” is on or after 6 April 2019 rather than the date of any award made by an Employment Tribunal.
From 6 April 2019, for eligible jobholders from age 22 up to the state pension age, the new thresholds and contributions will be:
- Earnings trigger: £10,000
- Lower qualifying earnings: £6,136
- Upper qualifying earnings: £50,000
- Minimum employer contribution: 3%
- Minimum employee contribution: 5%
Arguably, some employers ought to have consulted employees over these changes and there is a minimum 60 day consultation period for a “listed change” which includes increases to member contributions. There is an exemption in the consultation regulations where the change is required for the purpose of complying with a statutory provision. The Pensions Regulator has given some guidance on whether consultation is required but the status of this guidance is not legally binding and the position remains unclear.
For more details about the issue of consultation with employees see our recent article.
7 April 2019
Family Friendly Pay
From 7 April 2019, Statutory Maternity, Adoption, Paternity and Shared Parental Leave pay increase from £145.18 a week to £148.68.
Itemised Pay Statement
From 6 April 2019, as a result of the Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) Orders 2018 there will be a requirement for payslips to state the hours worked where pay varies. The Orders provide that:
- Workers, for the first time, will have the same right as employees to an itemised pay statement (regardless of fixed or varied hours).
- Where an employee's or worker's pay varies by reference to time worked, employers must include the number of hours for which the employee/worker is being paid on the itemised pay statement. The number of hours must be given either as a single aggregate figure or as separate figures for different types of work or rates of pay. This will make it easier for hourly paid staff to ensure that they are being paid correctly.
These changes do not apply to salaries paid for work done before 6 April 2019 and employers will need to ensure that their payroll systems are able to comply with these new provisions.
The Department for Business, Energy & Industrial Strategy (BEIS) has published guidance on the new provisions. This includes useful examples of case studies which show where there is, or is not, a statutory right to receive an itemised payslip.
Gender Pay Reporting
There is now very little time for publishing the second gender pay gap reports as the deadline in the private and voluntary sector is 4 April 2019 (30 March 2019 for public sector employers). It appears that 2019 is likely to be the same as 2018, with a last minute rush of reports published close to the deadline.
For an update on gender pay see our recent article.
Aggravated Breach Penalties
From 6 April 2019, the Employment Rights (Miscellaneous Amendment) Regulations 2019 increase the maximum penalty for an "aggravated" breach of employment law from £5,000 to £20,000.
Whether there is any increase in the use of such penalties, which have not been used widely by Employment Tribunals since they were introduced in 2014, remains to be seen. The government confirmed that as at January 2017, Employment Tribunals had levied 18 penalties against employers, 12 of which have been paid.
Extending Redundancy Protection for Women and New Parents
Research by the Equality and Human Rights Commission in 2016 revealed that 11% of women felt forced to leave their jobs on return from maternity leave and 77% of new and expectant mothers reported at least one potentially discriminatory or negative experience. On 25 January 2019, the government launched a consultation exercise about extending redundancy protection for women and new parents.
One proposal includes consolidating the current redundancy protection afforded to those on maternity leave (regarding the right to be offered a suitable alternative vacancy) to cover those who are pregnant or who are in a protected period of 6 months after returning from maternity leave. Another question being considered is whether this extended protection should apply to other types of family leave such as adoption leave or shared parental leave.
The consultation period ends on 5 April 2019.
On 4 March 2019 BEIS commenced a consultation exercise on measures to prevent the misuse of confidentiality clauses in situations of workplace harassment or discrimination.
Proposals to tackle their misuse include for example, making it clear that confidentiality clauses cannot prevent any disclosures to the police and in addition, ensuring that the limitations of confidentiality clauses are clearly set out to the worker either in settlement agreements or as part of a written statement of particulars so that workers know what rights they have if they have signed a confidentiality clause.
Standard, approved wording for confidentiality clauses has been recommended to the government by the Women and Equalities Select Committee and one question in the consultation paper is whether the government should set a specific form of wording. Another question is whether the independent advice a worker receives on a settlement agreement should specifically cover any confidentiality provisions. Significantly, the government proposes that a confidentiality clause in a settlement agreement that does not meet the new wording requirements would be void and an individual who breached it could not be sued if the confidentiality clause had not been drafted appropriately.
It is accepted that confidentiality clauses have a right and proper place in the employment context, for example, to protect trade secrets. However there are concerns that such clauses are being misused, for example, to prevent disclosures about repeat offenders of sexual harassment.
The consultation period ends on 29 April 2019.
According to the 2018 Modern Families index, a survey of over 2,750 working parents with children under 13, revealed that 34% of parents disapproved of their employer’s approach to work-life balance and 36% were willing to take a pay cut or move roles to prevent being burnt out.
BEIS has set up a Flexible Working Task Force to promote wider understanding of flexible working. The Task Force is co-chaired by the CIPD and is made up of policy makers, employer groups, trade unions and professional bodies. It will evaluate the effectiveness of the current flexible working Regulations in April 2019 (no date for this as yet) and any changes will be implemented in 2020/21.
Will 12 April 2019 be the new date that the UK now leaves the EU? After last week's indicative votes we are still not much further forward (except for more uncertainty over Conservative leadership) with more indicative votes scheduled for today and, if they produce no conclusive result, possibly Wednesday. If there is a clear result, the Government could try to implement it in time if it agrees. No clear result could leave the UK with a No Deal Brexit on 12 April (which the majority of MPs are against) or a request for a further extension from the 27 remaining Member States assuming the Government can show what the extension is going to achieve. Deal or no deal remains the vital question when it comes to recruiting and retaining EU workers, any potential changes to Employment law, and of course how the whole process will affect employers and the staff who work for them.