The Small Business, Enterprise and Employment Act 2015 (the SBEEA) received Royal Assent in the UK on 26 March 2015, although most of the employment provisions contained in Part 11 require a commencement order to bring them into force. It is therefore not certain when many of the provisions listed below will have effect. The exception is the provisions on employment tribunal postponements which came into force on 26 March 2015 .
- Equal Pay Transparency: Section 147 of the SBEEA requires that as soon as possible and by no later than 26 March 2016 regulations must be made under section 78 of the Equality Act 2010 requiring employers with at least 250 employees to publish information about their gender pay gap.
- Whistleblowing: The SBEEA allows regulations to be made requiring “prescribed persons” to produce and publish annual reports of protected whistleblowing disclosures. Prescribed persons include the UK Financial Conduct Authority and the Health and Safety Executive. The regulations will include details of what information should be included in the report. In addition, the SBEEA grants the Secretary of State power to make regulations to protect job applicants in the National Health Service who have made protected disclosures from discrimination by prospective employers.
- Financial Penalties: Section 150 sets out new sections in the Employment Tribunals Act 1996 providing for financial penalties to apply when an employer fails to pay employment tribunal awards or sums due under certain settlement agreements. A warning notice must have been given first by an enforcement officer giving the employer at least 28 days to pay the relevant sum. If the relevant sum is not paid, a financial penalty can be imposed of up to 50% of the unpaid amount, subject to a maximum of £5,000. The penalty is paid to the Secretary of State (not the employee).
- Employment Tribunal Postponements: Section 151 sets out amendments to the Employment Tribunals Act 1996 providing for the employment tribunal procedure regulations to be amended to allow for a limit to be placed on the number of hearing postponements (which includes adjournments) that a party may be granted in employment tribunal proceedings and to oblige tribunals to consider making a costs order where a late application for postponement has been made.
- National Minimum Wage: The National Minimum Wage Act 1998 is to be amended to extend the financial penalty for failure to pay the national minimum wage.
- Exclusivity in Zero Hours Contracts: Section 153 amends the Employment Rights Act 1996 allowing regulations to be made preventing exclusivity clauses in zero hours contracts. An exclusivity term prohibits the individual from working under another contract or arrangement.
- Public Sector Exit Payments: The SBEEA creates a power to make regulations which will require repayment of public sector exit payments in certain circumstances.
Employers need to be aware of these proposals and to ensure that they are ready for the changes when they are implemented. In particular employers should be considering the effect of the equal pay transparency provisions if they apply to their organisation, particularly if there is concern that there are issues of gender pay disparity which might be revealed and lead to subsequent claims.
The first commencement order (the Small Business, Enterprise and Employment Act 2015 (Commencement No. 1) Regulations 2015) came into force on 26 May 2015. This brought into force, with effect from that date, the following sections referred to above:
Section 152: The National Minimum Wage Act 1998 is amended so that the amount of financial penalty for underpayment of national minimum wage in the UK is up to £20,000 per worker.
Section 153: A new Section 27A has been inserted into the Employment Rights Act 1996 so that exclusivity clauses (ie a clause in a zero hours contract which prohibits the worker from doing work or performing services under any other contract or arrangment) are unenforceable. Section 27B has also come into force which entitles the Government to make further regulations in relation to zero hours contracts. Although draft regulations were published in March 2015 they have not yet come into force.