Employment law constantly evolves. Established concepts often take on new significance as they are re-worked and developed. A draft statutory instrument illustrates this point well, expanding the scope of three separate legal provisions over the next 15 months. Although still in draft form, some of the changes are imminent and employers need to be aware of what is proposed.
The most immediate change affects employer penalties – this is due to come into effect on 6 April 2019. Employer penalties are awards made against employers involved in Employment Tribunal proceedings where their defence fails and there are considered to be aggravating factors. The penalty is payable to the government and so stands separately from, and is paid in addition to, any award payable to the employee. The employer penalty is usually set at 50% of any award that the employer must pay, but this is subject to a minimum penalty of £100 and a maximum of £5,000. With effect from 6 April 2019, the maximum penalty increases by 300% to £20,000.
The aggravating factors justifying such an award include predictable grounds, for example, deliberate acts and malice. However, other grounds may be more of a surprise, for example, where an employer has a dedicated human resources function (on the basis that it should know better).
Employers therefore must take care to ensure that they follow correct procedures and take advice because the cost of losing an Employment Tribunal claim continues to increase.
The other changes are not due to be implemented until 6 April 2020, but employers need to be aware and prepare.
The first change involves extending the obligation on employers to provide a written statement of employment particulars (with prescribed content) no later than 2 months after employment commences. This applies even if their employment has ended. While currently such statements need only be provided to employees, with effect from 6 April 2020 this obligation will be extended and apply to anybody commencing an engagement on or after that date who is considered to be a worker. With this new legislative requirement being introduced, employers will have to ensure that they are correctly identifying all workers they engage, to ensure that steps are taken to comply with this new obligation and, for that matter, to ensure that they respect the other legal rights afforded.
With regard to identifying worker status, the guidance is evolving as new cases are put before the courts and current judgments are appealed. Recent high profile cases have involved Uber, Pimlico Plumbers and Addison Lee, amongst others. Cases turn on their own facts and we are pleased to help employers with assessing the status of those working for them.
The second change involves reducing the threshold employees must meet to formally request an employee information and consultation body. The employer must have employed at least 50 employees (which can include agency workers) on average in the previous 12 months. Currently a request must be made by at least 10% of the workforce, but with effect from 6 April 2020 this is to be reduced to 2% (but still subject to a minimum of 15 people for small businesses and a maximum of 2,500 for large businesses). This change inevitably makes it easier for employees to trigger the legislative provisions, furthering the government’s objective of increasing employee engagement and participation.
All three changes move the frontiers of current employment law and have the potential to affect employers of all sizes. Our employment team is very experienced at advising and supporting employers and HR departments, and we are pleased to assist employers with all aspects of these matters.