A number of developments in UK employment law are expected this year. This post takes a look at some of the key changes.
Mandatory gender pay gap reporting
In the UK, on average, women earn less than men. In order to address this issue, and following a lengthy consultation, draft regulations have been published which, subject to parliamentary approval, will come into force in April 2017.
Under the Regulations, private and voluntary sector employers with at least 250 employees will be required to publish annual gender pay gap figures.
Employers must publish:
- the difference between the mean (average) hourly rate of pay of male and female employees;
- the difference in the median hourly rate of those employees;
- the difference between the mean and median bonus pay paid to relevant employees and the proportion of male and female employees who were paid a bonus; and
- the proportion of male and female employees set out in quartile bands divided according to rates of pay.
Employers will have the option to include a narrative explaining any pay gaps or other disparities, and setting out what action, if any, they plan to take to address them. The provision of a narrative will be strongly encouraged, but it will not be mandatory.
The Regulations do not contain any sanctions for failure to comply. However, the Explanatory Notes state that a failure to comply will constitute an unlawful act within the meaning of section 34 Equality Act 2006. This allows the Equality and Human Rights Commission to take enforcement action against defaulting employers.
Once Parliament has approved the Regulations, we are promised the publication of non-statutory guidance. This will be welcomed by employers.
Draft regulations have also been published which impose similar obligations on public sector employers with 250 or more employees.
The apprenticeship levy is due to come into effect in April 2017.
The apprenticeship levy will require all UK employers (in both the private and public sectors) which have annual wage bills of more than £3 million, to pay 0.5 per cent of their annual wage bill towards the cost of apprenticeship training. This will replace the current system which enables employers to choose and pay for the apprenticeship training they want.
Employment tribunal fees
Historically, unlike in the civil courts system, no fees were payable for instituting employment tribunal proceedings. However, fees were introduced under a new system in July 2013 so that since then, claimants have to pay a fee on issuing a tribunal claim, and a further fee if the claim goes to a hearing (the level of the fees being dependent on the complexity of the claim).
The trade union, UNISON, has issued two judicial review challenges against the introduction of the fees. Both were dismissed by the High Court and in August 2015, the Court of Appeal dismissed UNISON’s appeal. UNISON has now appealed to the Supreme Court and the hearing is scheduled to take place in March 2017.
Alongside these proceedings, the Government has been carrying out a review of the employment tribunal fees system which is due to be published early in 2017.
The Government plans to extend the right to shared parental leave and pay (currently enjoyed by parents and their partners) to working grandparents.
A consultation on the new right was initially proposed for May 2016 but was postponed until after the EU referendum. It is expected that the consultation will be published at some time this year with a view to legislation coming into force in 2018.
References in the financial services sector
During 2015, the UK financial services regulators, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), consulted on proposed changes to the way affected financial services firms and insurers seek and provide references for candidates for certain regulated roles as part of a wider package of reforms which aim to improve the accountability in banks and insurers.
The final FCA and PRA rules on regulatory references were published in a policy statement in September 2016 and are scheduled to come into force on 7 March 2017.