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What to look out for in 2018

 

 

A new year brings new challenges for every business.  In the ever changing world of employment law 2017 was no exception and 2018 is looking set to be a busy year too.

 

2017 was the year of the “Gig Economy” with well publicised cases brought against companies such as Uber, Deliveroo, Pimlico Plumbers and City Sprint.  These cases continue to rumble on and will undoubtedly have an impact on the business models for these companies going forward.  The court’s decisions last year indicate that it will be increasingly difficulty to claim that someone is a genuinely self employed contractor and not entitled to workers rights such as sick pay, minimum wage and holiday pay.  This will undoubtedly have an impact on all businesses large and small as the “Gig Economy” model continues to be challenged in 2018 with the Pimlico Plumbers case due to be heard in the Supreme Court in February 2018 and Uber’s case likely to be heard by the Court of Appeal this year too. 

 

The status of individuals that you engage in your business will therefore continue to be something that should be given careful consideration.  Since 6 April 2017, all payments made by public sector organisations to workers who are supplied via personal service companies (ie John Smith who personally provides his services via John Smith Limited) are now treated as payments of employment income with appropriate deductions for income tax being made.              

 

The government announced in its Autumn 2017 budget that it was considering extending these reforms to the private sector which would have a huge impact on businesses that engage self employed contractors to provide their services.  Research into this was commissioned and is due to be published in 2018, with further consultation to follow but it is clear that the “Gig Economy” and the status of workers is a hot topic that will continue to be assessed and challenged in the coming year.

 

So what else do you need to look out for in 2018?

 

·         Brexit! – Agree with it or not, the impact that Brexit will have on workers from the EU and their right to work in the UK remains to be seen but is a huge concern for a lot of our clients in the leisure and restaurant sector whose businesses rely on these workers.

 

·         GDPR – Another popular term in 2017 that if you haven’t heard before, you need to be aware of now.  From 25 May 2018 the General Data Protection Regulations (GDPR) will apply in the UK and across Europe and will introduce new obligations in relation to the control and processing of personal data.  This will have an impact on all areas of a business from the contacts database that you use for marketing to your employee records.  With fines of up to 20 million Euros or 4% of group worldwide turnover (whichever is greater) for breaches of the new rules, it’s important that you take action now to ensure that you are compliant.

 

·         Sex Discrimination and Dress Codes – Following a petition signed by more than 150,000 people, the Petitions Committee and the Women and Equalities Committee published a joint report which has made it clear that requiring women to wear high heels or comply with certain dress codes could have a detrimental impact on their health and well-being.  In April 2017 the government agreed that action should be taken to raise awareness of dress code issues and recommended that updated guidance was published.  This is expected in 2018.

 

·         Employment Tribunal Fee Reimbursement – Employment Tribunal fees were introduced in July 2013 but following a decision by the Supreme Court in July 2017 that they were unlawful, fees were abolished.  The Ministry of Justice and HMCTS rolled out a refund scheme in 2017 but what will be interesting to see this year is what happens to cases that were rejected or dismissed because of the non-payment of fees as their cases are considered for reinstatement.

 

·         Gender Pay Gap Reporting – The first Gender Pay Gap reports for large private and voluntary sector employers must be published by 4 April 2018.  Several large organisations such as the BBC and Shell have already published their data which still shows that there is a considerable gap between the average salaries of men and women in the workplace.

 

·         Grandparental Leave – The government has committed to extending shared parental leave and pay to working grandparents in 2018.  It is also expected that there will be discussion about streamlining the shared parental leave and pay system overall in light of the low take up rate.

 

·         Termination Payments – In 2015 the government consulted on simplifying the tax and national insurance treatment of termination payments that are made when an employee leaves a business.  From April 2018 employer national insurance contributions will be payable on payments above the £30,000 payment threshold (in addition to deductions for income tax) with the first £30,000 of a termination payment remaining as exempt from both income tax and national insurance. The Finance Bill 2017 will also ensure that all payments in lieu of notice are taxed as earnings.  At the moment, if there is no contractual right for an employer to make a payment in lieu of notice when an employees leave a business, it is often possible to make the payment without any deductions for income tax and national insurance.

 

With the issues surrounding the use of and status of self employed contractors and the risk of them being found to be a worker with the enhanced rights that come with that, now is the time to review your contracts of employment and agreements with contractors to ensure that you are complaint and are not exposing your business to the risk of costly and time consuming disputes.  If you would like to have a chat about reviewing your contracts, staff handbook or employee policies, please get in touch.

 

Julie Edmonds is Senior Associate at JPC Law.

For more information on employment matters, please contact her:

E: jedmonds@jpclaw.co.uk

T: 020 7644 7286

General Enquiries:

E: enquiries@jpclaw.co.uk

T: 020 7625 4424 

 

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