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New employment law passed in last days of Parliament

30th April 2015
A number of Bills became law just before the end of the recent Parliamentary session. Among these are a couple of Acts that address employment law matters, namely the (somewhat cryptically named) Deregulation Act 2015, and the Small Business, Enterprise and Employment Act 2015.

With the exception of one provision, the changes brought under these Acts do not have immediate effect, and will only come into effect once "commencement" orders activate them. So, whether they will come into effect in full, in part, or at all, will largely depend on the outcome of the forthcoming General Election.

However, it is important to be aware of the issues within these Acts.

On the topic of Zero- hours contracts all the major political parties have been engaged in the public debate on the "rights" and "wrongs". A definition of a Zero-hours contract is given in section 153 of the Small Business, Enterprise and Employment Act 2015. The Act also goes on to state that exclusivity clauses within a zero hours contract will be unenforceable. However, this provision is still not in force yet, and must await a commencement order to bring it into operation. Draft Regulations have been published which propose the extension of the ban on exclusivity clauses to employment and worker contracts which guarantee a low income (although no income threshold has been set). While exclusivity clauses within zero hours contracts do cause a problem for some workers, the greater problems are those of insecurity with such contracts as by their very nature they do not provide a set expectation of any particular hours of work- even if a clear pattern has in practice become apparent.

The same Act also addresses  the issue of non-payment of Tribunal awards. Despite the fact that there is a remedy available through the County Court for non-payment of Tribunal awards, the level of non-payment of awards remains shockingly high, particularly when one considers the fact that the individual now has to pay significant sums to the Tribunal Service to get to a hearing. Section 150 of the Act introduces an incentive scheme to encourage prompt payment of awards by means of imposing a penalty if the award is not paid by a specified date. The penalty will be 50% of the unpaid relevant sum (subject to a minimum of £100 and a maximum of £5,000). To the surprise of many the penalty will not go to the person that was given the award at the Tribunal, but instead it will go to the Government!

On the subject of Employment Tribunals, the same Act enables Regulations to be introduced to limit the number of postponements that each party to litigation in the Tribunal can request during the course of a case. The Government has already consulted on the proposal of limiting each party to 2 postponements, after which the Tribunal will be obliged to consider making a costs order against the party requesting a further postponement.In our experience the Tribunals are reluctant to order numerous postponements already without there being set Regulations requiring them to do so. While the existence of set Regulations on this may encourage parties to think carefully before requesting a postponement in the future, we doubt it will make much practical impact on the way that the Tribunals address the issue of postponements.

Increased penalties for underpayment of the National Minimum Wage are provided in the Act. Currently the limit on the penalty is £20,000 per notice-irrespective of the number of workers covered by the notice. This will change to a maximum of £20,000 per worker underpaid.

The topic of gender pay reporting has also been addressed by the Act. The Act requires private and voluntary sector employers with 250 or more employees to report on the gender pay gap within their business by no later than spring 2016.

The Deregulation Act 2015 touches the subject of health and safety law. In the Act self-employed workers will be exempted from health and safety law where their work activities pose no potential risk of harm to others. However, the details of this will be set in some future Regulations.

Obviously the future of these provisions will depend on the outcome of the General Election and the content of future Regulations and Commencement Orders. So, it is a case of "wait and see".

If you need further advice or assistance on any of the matters raised in this article please do not hesitate to contact us at Hallett Employment Law Services Ltd.
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