Changes to Employment Law 2018
With the end of 2017 fast approaching, here at Osprey Human Resources Consultancy we have summarised below the key changes you should be aware for next year. For advice and guidance as to how those changes will affect your business please contact: Paul Middlemast at
There was the seismic shift in tribunal access due to the removal of employment tribunal fees (latest statistics show a 64% increase in claims brought since their abolition) and many important judgments in every court, from the Employment
Appeal Tribunal to the European Court of Justice. So ensure your policies and procedures are in place and up to date.
It’s never an exact science to predict what will happen in 2018, but the main themes and date of key employment changes are:
Living and minimum wages
1 April 2018
Alongside this, there will be the usual increase to living and minimum wage rates on 1 April 2018, with the national living wage for workers aged 25 and over to be increased to £7.83 (from the current rate of £7.50).
Gender pay gap reporting for private companies
4th April 2018
Regulations require employers in the private sector with at least 250 employees to publish, by 4th April 2018, gender pay information. The information to be published includes the difference between the mean and median hourly rates of pay and bonus for male and female employees.
Pension’s auto enrolment
6 April 2018
There will be an increase to minimum auto enrolment pension contributions for both employers and employees. As it stands, the current minimum contribution for both parties is 1% but this will increase to 2% employer contribution and 3% employee contribution next April. There is then a further increase scheduled in 2019 for a 3% employer contribution and 5% employee contribution.
Changes to the tax treatment of termination payments
6th April 2018
One change to look out for when dealing with Settlement Agreements is the change in April 2018 to the treatment of taxation of termination payments in respect of payments in lieu of notice, all such payments will be subject to income tax and National Insurance deductions, whether contractual or not.
It is presently possible to pay entirely non-contractual payments in lieu of notice as damages payments, not subject to tax, but this will no longer be the case. Either the employee – in accepting reduced sums – or the employer – in “grossing up” the payment will be financially affected by this.
The General Data Protection Regulation (“GDPR”) comes into force
25th May 2018
GPDR (General Data Protection Regulations): These will replace the current provisions in the Data Protection Act in 2018, and will enable the UK to maintain its ability to share data with EU states post-Brexit.
GDPR will make changes to the current data protection rules. It will apply to any organisation which controls or processes personal data. The changes are significant, but the key ones, in summary, are as follows:
- The definition of “personal data” will be wider;
- Individuals will have a right to request that their data is erased, if there is no need for the organisation processing it to continue to do so. This is known as the “right to be forgotten”;
- There will be tighter rules for obtaining consent from individuals before processing their data;
- The maximum fines which can be imposed on organisations for breaching data protection will increase significantly.
Equal pay claims
We’re all familiar with the saga of public sector equal pay claims, which have been the subject of litigation for many years. However, as (some) of these draw to a conclusion, the focus will turn more to private sector claims and supermarkets seem the current target, with claims against Asda and Sainsbury’s currently winding their way through the tribunal system. Expect these types of claims to become more prevalent.
Appropriate calculation of holiday pay has been a headache over the past few years, and with recent cases such as the European Court of Justice Case of King v Sash Windows, there may be further developments. Although the King case turned very much on its facts, it may offer scope for challenges to settled cases, therefore there is a possibility holiday pay entitlements may need re-calculated next year. We’ll keep you updated on any concrete developments.
We will see more “gig economy” cases, where individuals are fighting for worker rights notwithstanding a contractual self-employed status. The Pimlico Plumbers case is in the Supreme Court, the Uber case likely to be at the Court of Appeal (having been refused a direct appeal to the Supreme Court) and a number of other cases will be heard in the employment tribunal.
One particularly interesting claim is that of Jess Varnish, the Olympic cyclist, who has claims in the employment tribunal both against British Cycling and UK Sport for sex discrimination, detriment for whistleblowing, victimisation and unfair dismissal. These heads of claim will require her to establish at least worker status to allow some to proceed, and employee status for all to proceed.
Date to be confirmed: Shared parental leave to be extended to grandparents
Shared parental leave is to be extended to allow grandparents to take time off work to care for their grandchildren. The new system will allow a mother to share her maternity leave with a nominated working grandparent.
Caste Discrimination: Following a consultation paper launched in March 2017 the Government proposes amendments to the Equality Act to include caste as a protected characteristic within the definition of race discrimination.
Salary Sacrifices: Existing arrangements will remain protected until April 2018. For new schemes, as of April 2017, the only benefits that will receive a benefit from tax and NI relief include childcare vouchers, cycle to work equipment, ultra-low emission cars and enhanced employer pension contributions.
It’s sure to be an interesting year, and that’s without even contemplating the effect of Brexit on employment law. If you have any queries about any of the issues raised in this article, please do not hesitate to contact Paul Middlemast on 07831 427234.