Key Employment Law Events in 2017 and Beyond - McDermott Will & Emery

Key Employment Law Events in 2017 and Beyond

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Current indications are that 2017 may be a fairly static year as regards to employment law.

Whilst it is anticipated the government will trigger Article 50 to start Brexit negotiations, these are likely to last for at least two years, and existing employment laws are unlikely to feel any ripple effect from leaving the European Union for some time.

In the meantime, the Prime Minister has asked for a review, expected to take around six months, on whether current employment laws are adequate to protect the rights of the growing numbers of atypical workers. It is unlikely though that any resulting changes will come into effect in 2017.

There are, however, a number of key developments that employers will definitely need to get to grips with, or at least prepare for, in 2017.

In Depth

April 2017

Mandatory Gender Pay Gap Reporting

This is expected to finally come into force on 6 April 2017, subject to Parliament formally approving the now finalised Equality Act 2010 (Gender Pay Gap Information) Regulations 2017.

Under the new Regulations, private and voluntary sector employers with 250 or more employees as of 5 April each year (the “snapshot date”) will be required to report comparative information on male and female remuneration as of the snapshot date. Employers will have one year from the snapshot date to publish the relevant data.

As such, gender pay gap data for the 5 April 2017 snapshot date, covering specified information relating to disparities in basic pay and bonus, will therefore need to be published by no later than 4 April 2018.

It is possible that there will be gender pay disparity in many businesses, and those employers may expend most of their effort thinking through what explanations and additional background information should accompany the data they are required to publish.

Employers should consider preparing initial draft documentation for the purposes of seeking legal advice in order to render those draft documents legally privileged. Otherwise, they need to be aware that any documentation prepared will be potentially disclosable in the event of any subsequent litigation.

April 2017

Salary Sacrifice Benefits Restricted

In his Autumn Statement, the Chancellor said he would curtail the tax break associated with salary sacrifice schemes. This has not, however, turned out to be as onerous as first appeared. In fact, tax will continue not to be payable on the amount of salary that is sacrificed where the sacrificed salary is used to purchase

  • Enhanced employer pension contributions to registered pension schemes and pensions advice
  • Childcare benefits
  • Cycles and cyclists’ safety equipment under the cycle to work scheme
  • Ultra-low emission cars.

Arrangements made before April 2017 will be protected until April 2018, and long-term arrangements relating to cars, accommodation and school fees until April 2021.

April 2017

Two New Levies

Apprenticeship levy – UK employers with an annual wage bill of over £3million will be required pay 0.5 per cent of their annual wage bill towards the cost of apprenticeship training.

Immigration skills charge – it is expected that a skills charge of £1,000 per migrant per year will be introduced on employers sponsoring migrant workers for a Tier 2 visa. A reduced rate of £364 will apply to charities and smaller employers. The purpose of the proposed charge is to encourage employers to recruit British workers in preference to migrant workers.

June 2017

Whistleblowing – Chesterton Global v Nurmohamed

Further to legislative changes made in 2013, a whistleblowing claim can currently only be based on a disclosure made “in the public interest”. There has been some confusion as to what this means.

In Chesterton Global v Nurmohamed, the Employment Appeal Tribunal applied a broad interpretation in finding that a complaint made by an employee about the calculation of his commission income was in the public interest because the same issue also affected 100 other employees.

In June 2017, it is expected that the Court of Appeal will hear an appeal in the case and it is hoped that the Court will use the opportunity to provide much needed clarification.

2017 – precise date unknown

Industrial Action

The Trade Union Act 2016 is expected to come into force in 2017 and will address the government’s concern that strikes are being called with very low voter turnout amongst union members. The key features are expected to include

  • A requirement of at least 50 per cent ballot turnout for industrial action to be lawful.
  • Where a strike ballot relates to “the provision of important public services” such as health and transport, at least 40 per cent of those entitled to vote must vote in favour of the proposed action.

May 2018

General Data Protection Regulation

The UK Government and the UK’s data protection authority, the Information Commissioner’s Office (ICO), have now confirmed that the European General Data Protection Regulation (GDPR) will come into force in the United Kingdom on 25 May 2018 as anticipated, even if only on an interim basis pending the details of any Brexit agreement.

The GDPR, which will replace the current EU Data Protection Directive and, by extension, the UK’s Data Protection Act 1998, will apply to all data controllers and processors (whether located in the European Union or otherwise) who process data in connection with the offering of goods or services to, or monitoring of, data subjects in the European Union, which, as things stand, still includes the United Kingdom.

The GDPR will place a greater onus on data controllers to actively demonstrate compliance with data privacy obligations. Amongst other things, it will impose stricter requirements for obtaining consent from individuals to process their personal data. Data controllers will also be expected to provide more information to data subjects about how and why their data is being processed.

The GDPR will also impose breach notification obligations on data controllers and require certain organisations, notably those undertaking large-scale processing of sensitive personal data or the regular and systematic large-scale monitoring of data subjects, to have a designated data protection officer (DPO).

Whilst employers still have some time to assess the impact of these changes and to take preparatory steps, it will be important to start that process sooner rather than later in 2017.

This is particularly true in light of the significant fines that data protection authorities will be able to levy under the GDPR: up to €20 million or, if higher, 4 per cent of annual turnover, depending on the severity of the breach.

From a human resource perspective, preparatory steps may include considering whether a DPO will be required; auditing current personal data practices; reviewing and updating contracts and policies, including consent mechanisms; and identifying any specific training requirements.

Cindy LaMontagne (Trainee) contributed to this article.