Skip to main content

News story

January 18, 2017

Complex challenges for employers in the year ahead

Constant changes and increasing complexity have helped make employment law a frontline challenge for business and this year looks set to continue the trend.

The first weeks of January saw Maggie Dewhurst, a bike courier with City Sprint, winning her case to be treated as a worker rather than a self-employed contractor. The high-profile case follows hard on the heels of a similar ruling given late last year in the action brought by Uber drivers, which the company has said it will appeal.

A worker may be entitled to certain rights, such as the national living wage, paid holiday and sick leave, where a contractor would not. An employee may also be a ‘worker’ but with extra employment rights and responsibilities.

“The decision in the case of Maggie Dewhurst vs City Sprint will apply only to her personally, but it puts such working practices under the spotlight, especially in the so-called ‘gig economy’, where people are employed by companies on a job-by-job basis,”

Our employment lawyer, Karen Cole, explained further:

“but the issues involved can equally apply in many other sectors where companies may be trying to optimise their staffing, if they do not realise the distinctions between an employee, a worker and a self-employed contractor. Many cases are now working their way through the courts and I expect we’ll see this topic in the headlines throughout 2017.”

Employers

Alongside, the Government is moving to crack down on unscrupulous employers to stamp out exploitation in the workplace after several companies hit the headlines for poor practices in recent months, including reports that workers at Sports Direct were receiving less than the national minimum wage and being subjected to humiliating working practices. The new Labour Market Enforcement body will take the lead in this, headed by Prof Sir David Metcalf, a founder of the Low Pay Commission.

Together with other employment legislation already announced for introduction this year, bringing further significant changes and new requirements, businesses need to make sure they are up to date with their practices and terms of employment. The up-and-coming legislation includes:

Gender pay gap reporting

The Equality Act 2010 (Gender Pay Gap Information) Regulations are set to come into force on 6 April 2017, meaning all private sector organisations with at least 250 employees must publish details of their gender pay gap for basic pay and any bonus payments. For further detail, see Karen Cole’s earlier article. The first reporting will be due no later than 4 April 2018 and annually thereafter. This could be a raw topic for supermarket employer Asda who face an equal pay claim brought by retail workers, mainly female, who argue their work is of equal value to the predominantly male warehouse workers. The preliminary judgement agreed that a comparison could be made between retail and depot work. Now, the Employment Tribunal will look to see if there are jobs of equal value and, if so, any pay differences. Asda has been granted leave to appeal the preliminary judgement.

Apprentice levy

Also due on 6 April is the annual apprenticeship levy under the Finance Act 2016 (part 6). In a Robin Hood-style approach, the levy must be paid by all UK private and public sector employers with a pay bill of £3m and above. It will be charged at the rate of 0.5% on their total pay bill, with an annual allowance of £15,000 to offset against the levy payment. The income will be used to fund a new system of post-16 apprenticeships, which will also be available to those employers falling below the £3m threshold.

Salary sacrifice schemes

As announced in the Autumn Statement, the Finance Bill 2017 will set out changes to the tax status of salary sacrifice benefits with effect from April 2017. The changes will end the tax-saving benefits of most salary sacrifice schemes, which will become subject to the same taxation as cash income. Any arrangements in place before 6 April 2017 will be protected for one year or four years in the case of cars, accommodation or school fees. The extension will apply until the arrangement ends, is renewed or otherwise modified. Pensions and related advice, cycle-to-work and ultra-low emission cars will remain exempt from tax.

Tax-free childcare

Also retaining its taxation benefits will be existing employer-supported childcare voucher schemes. These can remain open to new entrants until April 2018, with childcare vouchers and all associated tax savings available for the scheme’s life. However, the Government is expected to launch a new, alternative tax-free childcare scheme, which will allow working families satisfying a minimum/maximum income requirement to claim 20% of childcare costs for children under 12 or under 17 where children have a disability capped at £2,000 per year. The two schemes can run in tandem, but once a new scheme has been established, no new employees will be allowed to join an old-style childcare voucher scheme and still receive the tax benefits.

Holiday pay

An appeal by British Gas to the Supreme Court will challenge last year’s ruling by the Court of Appeal that holiday pay should be ‘normal pay’ and include contractual results-based commission. The appeal is expected to be heard in March 2017. Still, in the meantime, the ruling stands, and employers need to look at irregular payments made to employees and establish which are to be included within ‘normal’ pay and so be included in any calculation for holiday pay.

Karen added:

“The complexity around holiday pay calculations means employers are likely to need advice to get it right. It’s just one example of how employment law continues to pose challenges for businesses, and the year ahead is certainly no exception. It’s important to get ahead of the deadlines and make sure you’re addressing the changes across all aspects of the business.

“And while European law is behind some of the upcoming legislation or court rulings, it cannot be ignored on the basis that we are starting the process of withdrawing from the European Union, whatever style of Brexit is adopted by the Government. For now, everything stands and most likely will during transitionary arrangements.”

Speak to employment lawyer Karen Cole today to find out more information.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

Stay in touch

Subscribe to our newsletter

Stay in touch

By completing your details and submitting this form you confirm you are happy for us to send you marketing communications and that you agree to our Website Privacy Policy and Legal Notice and to us using Mailchimp to process your data.


Sending

News/Insight

  • Key aspects of the Chancellor’s March 2024 Spring Budget
    Our experienced solicitors look at the key points of this year's Spring Budget and how they could affect you.


    Read more
  • Understanding Dyscalculia: Employer’s Guide
    This article aims to provide a comprehensive guide for employers regarding dyscalculia, a mathematical learning difficulty affecting approximately 5% of the UK population. In it, we'll look at dyscalculia, its impact on employees and the legal obliga


    Read more
  • Starting a business?
    The legal tips and requirements you need to know to start your business in England.


    Read more
  • Flipping property and taxes
    Whether 2024 will see a further dip in house prices divides property market commentators, while buyers play the wait-and-see game on the mortgage market. The lure of fast profits to be made while the market is slow draws many amateur property develop


    Read more
  • We’re proud to support Update Your Will Week 2024
    It aims to raise awareness of the risks of not having an up-to-date will and encourages people to update their will to ensure their wishes are fulfilled when they die.


    Read more

What they say...

  • Andrea, March 2024
    “I’m very happy about the service I received very efficient friendly and helpful.” Wills, tax and trusts, Charlotte Barbaroussis

  • CN, March 2024
    “Charlotte was great and very on top of things.” Wills, tax and trusts

  • Ivan, March 2024
    “Excellent service and easy to understand. Made themselves available and made sure deadlines were met.” Patrick Simpson, Employment

  • Anon, March 2023
    “Very experienced solicitor gave excellent advice with real empathy.” Pippa Marshall, Family law

  • Anonymous, February 2024
    “Neil Boonin was professional, very efficient & exceedingly helpful.” Residential sales and purchases

Read more
Send this to a friend