Changes in legislation on the horizon in 2019
1 January 2019 – Executive Pay Gap
Companies with more than 250 UK employees have to report annually on the pay gap between their Chief Executive and average UK worker – reports are due in 2020.
29 March 2019 – Brexit
The two year timeframe for negotiating terms ends on the 29 March 2019, making this the UK’s leaving date, although this can be extended by agreement. We will continue to send out updates as we find out more about the impact and potential changes resulting from Brexit.
30 March 2019 – Gender Pay Gap (Public Sector)
Specified Public Authorities with 250 or more employees are required to publish their gender pay gap reports by 30 March 2019.
1 April 2019 – NMW and NLW increases
The National Minimum/Living wage increases to:
- Workers aged 25 and over – £8.21 an hour (National Living Wage)
- Workers aged 21-24 – £7.70 an hour
- Development rate for workers aged 18-20 – £6.15 an hour
- Young workers rate for workers aged 16-17 – £4.35 an hour
- Apprentice rate (workers under 19 or in first year of apprenticeship) – £3.90 an hour.
6 April 2019
Employer Penalties for Breaches
At the moment Tribunals have the power to impose a £5,000 aggravated breach penalty on employers losing cases. This maximum limit will rise to £20,000 from the 6 April 2019.
Employers must include details of the total number of hours worked where pay varies according to hours worked i.e. zero hours contracts or variable hours. Payslips will also need to be given to workers and not just employees.
Termination payments over the sum of £30,000 will also be liable to national insurance contributions.
Case Law – Contracts of Employment
In the case of Stefanko and others v Maritime Hotel Ltd, the EAT considered whether there was a failure to provide a statement of employment particulars where an employee has worked continuously for at least 1 month. Section 1 (2) of the Employment Rights Act 1996, states that employees must be given a statement of employment particulars within 2 months, however Section 2(6) of the ERA is clear ‘that employees have the right to a statement of employment particulars even if a person’s employment ends before the 2 months are up.’
Within the legislation there is currently an exception for those who work for less than 1 month to have the right to a contract of employment, however this is due to be repealed in April 2020, making an obligation to provide an employment contract a day 1 right.
This case highlights the importance of issuing contracts of employment to all employees as soon as possible and we advise that it is prudent to do this before someone begins working for you i.e. at the offer stage. If organisations wish to rely on certain clauses in the contract, it is important that employees sign up to these willingly. This can be more challenging once someone begins work as there can be little incentive to sign something which may restrict them or that they disagree with. It is imperative that organisations spend time in getting this important document in place, otherwise they could face costly claims and are less able to protect the interests of their organisation.
If you would like our support in drafting, reviewing and updating your contracts of employment, please call us on 01494 817193