December 19, 2016

UK - What do the 2016 developments mean for HR?

This update is the first in a series of two articles reviewing employment law changes over 2016/17. This article looks at the key practical issues for HR managers arising out of developments in 2016. In our second article, we explore the key developments to look out for in 2017.

2016 has seen a slow-down in the progress of new employment law legislation as the Government's focus has diverted to Brexit following the referendum result. Despite the fall in employment tribunal claims, the courts have still been busy and there have been a number of noteworthy decisions.

Since the referendum in June, there has been much speculation as to how employment rights will be affected by the Brexit decision. When we leave the EU, existing EU law will be made into British law so that the same rules and laws will continue to apply. That law can then be changed or removed, although Theresa May has said that existing workers’ rights will be guaranteed in law as long as she remains Prime Minister. So we may well not know what impact Brexit will have on employment rights for some time yet.

Click here for our updates on Brexit.

However, Brexit has had an immediate impact on timings as we have seen real delays in the publication and implementation of new laws and the launching of consultations. Before the referendum, we had been expecting announcements on grandparent leave but this has still not been forthcoming.  Also expected was the result of the government's enquiry into Tribunal fees; again, this has been delayed.  That said (and better late than never) the final draft gender pay gap reporting regulations were published this month, reminding us that the first gender pay reports must still be published in April 2018, as originally planned.

Click here for our latest update on gender pay reporting.

There was a great deal of press interest in the successful employment status claims brought by Uber drivers, the first of a number of employment status claims arising out of the gig economy. The Uber case shows that an individual's status is assessed on the basis of the reality of the relationship and, in particular, the control exerted over the individual in practice - not just on what the documentation says. Expect more cases on employment status in 2017.

There has been more talk about holiday pay this year, but no decision yet on whether annual bonus payments should be included in holiday pay calculations. So until then, bonuses do not have to be included in these calculations. 

The Lock v British Gas Trading Ltd litigation continued, with an appeal to the Court of Appeal which confirmed that contractual results-based commission and non-guaranteed overtime are still the only payments that employers must include in holiday pay.  But it's only those particular overtime and commission payments that have to be included, and only in relation to the four weeks' annual leave, not the extra 1.6 weeks' leave under the working time rules, or any additional contractual holiday entitlement.

It's now 20 years since disability discrimination was first outlawed, and there have been a number of significant disability discrimination decisions in 2016. The decision in G4S Cash Solutions (UK) Ltd v Powell is important because it shows that pay protection can be a reasonable adjustment, so employers should think carefully about whether to protect a disabled employee's salary level if they agree to move to a lower-graded job.

The disabled employee's reasonable adjustments claim in Carreras v United First Partners Research was successful. Even though there was no strict requirement to work late, he was disadvantaged because there was an expectation in his workplace that employees would work late. So when considering the duty to make reasonable adjustments, take into account expectations about hours of work as well as formal core hours.

In the summer, dress codes in the workplace hit the headlines when an agency which supplied reception staff sent an agency worker home after she refused to wear high heels. Click here for our update. That was followed by perhaps one of the most controversial employment law decisions in 2016, an Advocate General's opinion in a Belgian case involving a Muslim woman who was banned from wearing her headscarf at work. The Advocate General said this was not religious discrimination provided the ban was founded on a policy of religious neutrality and did not distinguish between different religions or between religious and non-religious beliefs. Another Advocate General's opinion in a similar case from France followed shortly after, and the two decisions are diametrically opposed.

Irrespective of the European Court of Justice's decisions in these cases, which are still awaited, it seems unlikely that a UK tribunal would decide that neutral dress codes justify the exclusion of employees who feel unable to comply with their employer's dress code because of their religious beliefs. In this situation, a balance must be struck between business interests on the one hand, and an employee's reasonable freedom on the other.

In March 2016 new regulatory rules, the Senior Manager and Certification Regime, were introduced for banks and other deposit takers, and a similar Senior Manager regime for insurers.  These were followed by new whistleblowing rules in September 2016, which include having a whistleblowers' champion and a corporate whistleblowing hotline.

Now read our related update What is new for HR in 2017? A number of the developments explored here are likely to still be on the agenda for HR next year.