Category Details Link to Further Material Expected date

Gender pay gap

Private organisations with 250 or more employees will again be required to publish their gender pay gap figures as at 5 April 2018 by no later than 4 April 2019. Although employers will be reporting for the second time, this year will be the true test as figures are expected to be heavily scrutinised in order to determine whether efforts to address any significant pay disparity highlighted in 2018 have been successful. For public bodies, reports must be published by no later than 30 March 2019 showing the pay gap as at 31 March 2018.

Gender pay gap reporting

30 March 2019 for public sector and 4 April 2019 for other business

Pay

In the Autumn 2018 budget, the Chancellor confirmed that the national living wage (which is the statutory minimum for workers aged 25 and over) will rise from GBP 7.83 to GBP 8.21 per hour with effect from 1 April 2019. The Living Wage Foundation has announced that the 'real' living wage (a rate which is independently calculated based on the real cost of living) has increased to GBP 9 per hour outside London and GBP 10.55 in London.

Legislation tracker—Employment

1 April 2019

Shared parental leave—sex discrimination

The cases of Ali v Capita Customer Management Ltd (UKEAT/0161/17/BA) and Hextall v Chief Constable of Leicestershire Police (UKEAT/0139/17/DA) were heard by the Employment Appeal Tribunal (EAT) towards the end of 2017. They relate to shared parental leave and whether it is sex discrimination to deny male employees the chance to receive enhanced pay while taking shared parental leave.

The EAT in Ali allowed the employer’s appeal holding that it is not direct discrimination against men for an employer to pay enhanced maternity pay but only statutory pay for shared parental pay.

In Hextall, the EAT allowed the claimant’s appeal (May 2018) on the basis that the ET erred when determining the claim in relation to the choice of comparator and identification of the particular disadvantage.

Both cases are listed before the Court of Appeal in May 2019.

Case tracker—Employment

May 2019

Off payroll working in the private sector (IR35)

The government has launched a consultation on IR35 rules for the private sector.

The government concluded a consultation on IR35 rules for the private sector in 2018. The IR35 rules are designed to ensure that individuals who provide services through an intermediary (usually a personal services company) but would have otherwise been an employee pay the same PAYE and NICs as direct employees. The responsibility for this rests with the intermediary, but the government believes that this is not an effective control and that only 10% of those who should comply with IR35 rules do so.

The government’s favoured position seems to be to move to similar rules that already apply in the public sector where the public sector employer is responsible for determining whether IR35 applies and for paying tax and NICs if it does. New rules similar to those in the public sector are expected in April 2020 and are likely to apply to corporates not qualifying as small companies within the meaning of section 382 Companies Act 2006 (CA 2006). Other business structures will be subject to a modified test which is part of the consultation. A consultation document was published on 5 March 2019.

IR35—key difficulties and HMRC's approach

Consultation period 5 March to 28 May 2019 Draft Finance Bill expected in summer 2019

Equal pay

Equal pay seems to dominate the headlines and attention has turned to Tesco—now facing a £4bn equal pay claim from store staff (mainly female) who allege that they should be paid the same as distribution centre workers (mainly male). Currently, there is a £3p/h difference. Similar claims against Asda and Sainsbury’s are already underway.

Procedural points were taken by the supermarkets. The cases of Brierley v Asda and Ahmet v Sainsbury's [2019] All ER (D) 96 (Jan) have been remitted to the Employment Tribunal by the Court of Appeal 2019.

Case tracker—Employment

Court of Appeal decision 17 January 2019

Gig economy

In 2017 the Court of Appeal referred the case of King v Sash Window [2018] IRLR 142 to the European Court of Justice (ECJ).

This case concerned whether King, a sales person for Sash Windows, who had been wrongly classified by his employer as self-employed rather than a worker (and therefore denied holiday pay) was entitled to be compensated for the unpaid holiday during his employment of 13 years. The ECJ ruled that in such cases, the worker will be entitled to be compensated for all of the unpaid holidays. This was a shock result as previous national court decisions have assumed a two-year cap on back dated holiday pay claims. The case was sent back to the Court of Appeal for final determination in late 2018 but settled in November 2018, leaving employers uncertain as to the correct approach.

Case tracker—Employment

Settled November 2018

Shared parental leave for working grandparents

In 2015, the then Chancellor announced that the right to shared parental leave and pay was to be extended to working grandparents. A consultation was expected to be launched in 2016 with the new rights expected to come into force in 2018. It appears the Government has abandoned these plans.

Legislation tracker—Employment

Not applicable

Itemised pay statements

The Employment Rights Act 1996 has been amended and with effect from 6 April 2019 every worker (rather than only employees) will have the right to an itemised pay statement.

Legislation tracker—Employment

6 April 2019

Parental Bereavement Leave

The Parental Bereavement (Leave and Pay) Act 2018 received Royal Assent on 13 September 2018. The main provisions of the Act will be brought into force by statutory instrument and provide for regulations to be made giving qualifying bereaved parents of children the right to two weeks paid leave.

It was intended to lay these regulations in Parliament early in 2019 but nothing has yet been published. The rights are not expected to come into force until 2020.

Legislation tracker—Employment

2020

Pensions management

New regulations to implement the EU Pensions Directive (IORP II) will be law on the 13th January. UK pension schemes are already subject to most of the requirements of the Directive, but there are some new rules including:

  1. pension benefit statements to be sent annually to all members (active & deferred)
  2. obligations for schemes to have 'key functions' in place, including internal audit and risk management
  3. requirements to adopt written policies—including risk management
  4. a requirement to have a remuneration policy and publically disclose relevant information
  5. greater supervision by national regulators and
  6. a requirement that all schemes make their statement of investment principles publically available on a website

Regulations were issued in final form in October 2018—see the Occupational Pension Schemes (Governance) (Amendment) Regulations 2018, SI 2018/1103 and the Occupational Pension Schemes (Cross-border Activities) (Amendment) Regulations 2018,
SI 2018/1102.

Legislation tracker—Employment

13 January 2019

Auto-enrolment contributions

The minimum contributions for auto-enrolment pension schemes will increase for both employers from 2% to 3% and employees from 3% to 5%.

Legislation tracker—Employment

6 April 2019

Restrictive covenants

The Court of Appeal has found that a covenant in an ex employee's contract which prevented her from being directly or 'indirectly' engaged or concerned or 'interested in' any business which competed with her former employer was too wide and, therefore, unenforceable, as it would have prevented her from holding a minor shareholding in a competing company, whereas her contract of employment had allowed her to hold up to 5% shareholding in a publicly quoted company. The employer has been granted permission to appeal to the Supreme Court, who will hear the case on 22 and 23 January 2019 (Tillman v Egon Zehnder [2017] All ER (D) 03 (Jun)).

Restrictive covenants can provide important business protection but careful drafting of the contract provisions is essential. It's often tempting to place onerous restrictions to forbid employees from competing with you after termination—but provisions that go too far can be invalidated and leave you with no protection.

Case tracker—Employment

Judgment is awaited and expected in April 2019

Suspensions

The Court of Appeal has re-considered whether suspending an employee, even where suspension might be appropriate, is a neutral act that causes no detriment to an employee (Agoreyo v London Borough of Lambeth [2017] All ER (D) 78 (Aug)). In this case, the High Court said that suspending an employee is not a neutral act. If suspension is inappropriate, it will breach the employee’s contract and (potentially) give rise to a claim of constructive dismissal.

The Court of Appeal allowed the appeal in this case but made clear that each case turned on its facts and that the act of suspension may not be reasonable. It considered that there was no material benefit in assessing whether suspension was a neutral act, the key issue was whether it amounted to a breach of the implied term of trust and confidence.

Case tracker—Employment

Judgment dated 5 March 2019

Termination payments

Legislation making all termination payments above £30,000 threshold subject to employer class 1A NICs was delayed and will now apply from 6 April 2020.

Termination payments and tax

6 April 2020

Individual rights arising from Union membership

The Court of Appeal is scheduled to hear the Kostal UK v Dunkley case in May (UKEAT/0108/17/RN). This case concerns when it's acceptable for an employer (who recognises trade unions) bypassing a union to negotiate directly with individual employees regarding changes to their terms and conditions. Trade Union law only allows employers (who recognise trade unions) to go over the heads of a union with a direct offer to workers concerning contracts of employment if they have a genuine, proper business purpose for doing so. The earlier decisions have all gone against Kostal. The cost of making an unlawful offer is currently £4,059 in respect of each worker, multiplied by the number of different offer letters sent.

Relevant to employers who recognise trade unions.

Case tracker—Employment

May 2019

Non Disclosure Agreements

Following political interest in the alleged misuse of non disclosure agreements to prevent reporting of harassment and criminal conduct, a consultation has been issued into regulation of NDAs.

Given current interest in NDAs, understanding which conduct amounts to a criminal offence may have a material impact on legality of NDAs.

LNB News 04/03/2019 87

Consultation period ends 29 April 2019

Criminal Offences

The new offence of ‘upskirting’ is effective from 12 April 2019 (Voyeurism (Offences) Act 2019).

Case tracker—Employment

12 April 2019

Category Details Link to Further Material Expected date

ePrivacy

The draft regulation on privacy and electronic communications is intended to replace the current ePrivacy Directive (Directive 2002/58/EC) and align electronic privacy requirements with the General Data Protection Regulation, Regulation (EU) 2016/679 (GDPR). For any organisation other than technology communication providers, the main areas to watch will be the implications on direct marketing and cookies.

The ePrivacy Regulation was intended to come into force at the same time as the GDPR but progress appears to have stalled.

ePrivacy Regulation—timeline

2020 or 2021

Category Details Link to Further Material Expected date

Trade marks

New trade mark regulations are effective from January (Trade Mark Regulations 2018, SI 2018/825) which make some changes to: (i) trade mark application requirements (ii) trade mark dispute resolution processes and (iii) the management of trade marks

Trade mark transactions and management—overview

January 2019

Category Details Link to Further Material Expected date

Corporate governance and transparency reform

New Corporate Governance Rules (The Companies (Miscellaneous Reporting) Regulations 2018, SI 2018/860) are applicable for financial years starting on or after the 1 January 2019. These mandate a raft of new reporting requirements in the annual reports and, in some cases, on company websites.

The reporting requirements vary depending on the size of the company.

For large companies reporting requirements include the need to show how the directors have had regard to the environment, stakeholders and other considerations set out in CA 2006, s 172 when making decisions.

Very large private and public companies will need to report on any corporate governance code that the company applied during the year and reasons for any departure from it. If no code was applied, the directors' report must explain reasons for that decision as well as the governance arrangements that were in place.

Quoted companies with more than 250 employees will have to report on the ratio of CEO pay to the median pay of employees and include explanations of changes from the prior year.

Companies (Miscellaneous Reporting) Regulations 2018 which companies are affected?

January 2019

Category Details Link to Further Material Expected date

New deal for Consumers

The EU has announced its planned package of reforms to deliver a new deal for consumers, these include:

  1. 'GDPR level' fines for mass harm cases
  2. making it easier to bring group actions against businesses
  3. additional consumer rights where consumers have suffered unfair, aggressive or misleading marketing and
  4. more transparency for on-line market places

We expect the proposals to be law by May 2019 but that there will be a two–year transition period. Whether this is applicable to the UK will be dependent on Brexit, however the UK government has also announced plans for a similar package of changes to consumer law and is considering the responses to its Green Paper ‘Modernising Consumer Markets’ which closed on 4 July 2018.

LNB News 11/04/2018 113

May 2019

Enforcement

The Competition and Markets Authority (CMA) has undertaken a number of sector specific enforcement projects seeking to enforce consumer law and has announced new investigations into the car hire market and the funerals sector. See Practice Note: UK market studies and market investigation references—ongoing cases tracker.

The CMA also announced its decision to fine guitar supplier Fender for a failure to produce documents in the course of an investigation—see LNB News 26/03/2019 68, CMA investigation: Fender Europe fined £25,000 for concealing documents during CMA inspection.

Care homes continue to feature in the CMA’s enforcement work alongside construction companies and retailers.

For information on the CMA’s ongoing competition enforcement work, see Practice Note: UK behavioural investigations—ongoing cases tracker.

UK behavioural investiga-tions—ongoing cases tracker

Various

Category Details Link to Further Material Expected date

Brexit

The UK was scheduled to leave the EU on the 29th March 2019 subject to two possible extensions, either to 12 April 2019 or May 2019. There are broadly two options: either a 'cliff edge' no deal and transition to the WTO rules or status quo transitional arrangements which are proposed to end on 31 December 2020. Guidance has been published by most government departments and extensive legislation has been provisionally amended to make provision with effect from ‘exit day’.

Brexit risk management guide

2019

Overseas property register

Implementation of a register of ownership and control of foreign companies that purchase property in the UK. The draft Registration of Overseas Entities Bill is now being considered by a select committee with a call for evidence having closed on 18 March 2019. It moves the UK one step closer to a ‘world-first’ public register of overseas entities owning UK property (the register). From 2021, overseas entities wishing to own UK property will need to identify and register their real owners. Entities failing to comply will be unable to sell, buy, lease or mortgage UK property—and could face criminal sanctions and fines.

Relevant to overseas businesses that purchase property in the UK.

See subtopic:Risk & Compliance forecast

2019

Energy consumption reporting

With the CRC Energy Efficiency Scheme being abolished from the end of March 2019, the government has introduced new regulations (The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018,
SI 2018/1155).

The new regulations require quoted companies to disclose their energy consumption, and large companies and limited liability partnerships to report on their greenhouse gas emissions and energy consumption, in their annual reports. This will be applicable to financial years beginning on or after 1 April 2019.

Mandatory environmental reporting

1 April 2019

Civil Procedure

The Ministry of Justice is consulting on the extension of fixed recoverable costs for most claims up to £100,000. Changes are made to the Civil Procedure Rules to facilitate low value online claims.

Tracker—Fixed costs reforms

April 2019

Professional Regulation

The Solicitors Regulation Authority has announced that its widespread changes to regulation including separate codes of conduct for individuals and entities will come into effect in November 2019. In-house lawyers may need to review their professional arrangements to ensure continues compliance.

Regulation of in-house lawyers

25 November 2019

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