Notable themes of 2014
Despite their significant ongoing impact, employment tribunal fees are still in force after the High Court rejected Unison’s claim that the fees regime is unlawful. However, the longer term future of the fees is not secure. Unison could well appeal to the Court of Appeal. Furthermore, a change in government at the election next year could result in a significant reduction in fee levels: both the Labour party and Liberal Democrats have indicated that they would reduce fees. There has also been talk of plans to devolve power over the employment tribunal system in Scotland, which means that the time is ripe for the promised wholesale review of how the remaining system will operate in England and Wales.
In addition, recent rulings from the Court of Justice and the Employment Appeal Tribunal suggest that many employers have been underpaying elements of holiday pay for the past 15 years. Employers who have not already done so should now urgently review holiday pay arrangements to assess potential liabilities, including the risk of claims for back pay, and consider whether to make changes now.
What's in store for 2015
From 5 April 2015:
Shared parental leave will be available to parents of children due to be born or placed for adoption. The two weeks compulsory maternity leave is retained but eligible parents will be able to share some or all of the remaining maternity (or adoption) leave and pay, replacing additional paternity leave. The new regime is enlightened, but complex, with enhanced pay practices posing a dilemma for employers.
Adopters will also be entitled to time off work to attend pre-adoption meetings; adoption leave will become a ‘day one’ right, with no qualifying service; and adoption pay will be enhanced to 90% of pay for the first six weeks. Parents fostering a child under the ‘Fostering to Adopt’ scheme will be eligible for adoption leave (and shared parental leave), as will eligible surrogate parents.
The period within which ‘ordinary’ unpaid parental leave can be taken is to be extended up to the child’s 18th birthday, rather than before the child’s 5th birthday. Policies will need to be updated to reflect these changed entitlements.
Changes will also be made to pensions legislation aimed at giving individuals greater flexibility when accessing their pension savings. Employers need to understand these changes and consider whether to update their plan’s design to accommodate new options. Default funds under defined contribution plans should be reviewed to ensure they remain suitable and a communication strategy developed to make members aware of the changes.
The new Fit for Work service will be phased in, and will place greater responsibility on employers to encourage a return to work. The new service will independently assess employees’ ability to work and recommend steps to help them stay in or return to work. Employers should review relevant procedures to ensure they reflect new practice, and consider impact upon any in-house occupational health resource.
What else might be in store for 2015?
Looking forward, the pressure is on the government to complete its employment reforms before the election. The Small Business, Enterprise and Employment Bill impacts on zero-hours contracts and public sector exit payments, and the employment status review could lead to an extension of employment rights to all workers. In addition, if passed, the Modern Slavery Bill will require employers to monitor their supply chains.
Meanwhile, the main political parties have started to reveal details of their likely manifesto commitments ahead of next year’s general election. All three main parties promise reform to zero-hour contracts and some extension to those who benefit from employment rights. Both Labour and the Liberal Democrats also have similar proposals aimed at improving pay transparency and both have commitments to incentivise the living wage and improve enforcement of employment rights such as the minimum wage.
However, there are clearly big differences between Party policies concerning our relationship with the European Union and the European Convention on Human Rights.
No doubt the manifesto writers are currently hard at work. However, it is already clear that employment law and politics are closely intertwined in the upcoming general election.
Simon Rice-Birchall is a partner at law firm Eversheds