UK employment series - What to expect in 2018

Introduction

Hello and welcome to the first of our employment videos for 2018. My name’s Paul Griffin and I’m Head of the Norton Rose Fulbright Employment Team in London.

As you all know, employment law is constantly changing and developing - and 2018 is likely to be a busy year. In today’s video, I’ll be looking at some of the key developments we can expect for employment law over the coming year, including the new rules on data protection, planned changes to the rules on regulatory references in the financial services sector, and the latest on gender pay gap reporting.

The EU General Data Protection Regulation

The EU General Data Protection Regulation - or the GDPR - is to be implemented in the UK on the 25th of May this year. This will mean a replacement of the current data protection laws set out in the Data Protection Act 1998, and new rules governing the processing of personal data.

Employers process a large amount of data in relation to their employees, not only information held on personnel files, but also data relating to computer use, access cards and CCTV. Of particular importance to employers is that the GDPR sets out stricter conditions with regard to consent, which is relied upon by employers to justify the processing of employee personal data.

The new conditions - which require that consent must be freely given, specific, informed and unambiguous - mean that employers are unlikely to be able to continue to rely on consent obtained by way of the employment contract, because of the innate imbalance in the bargaining power of the parties to the contract.

Consequently, going forward, employers should, where possible, rely on alternative legitimate grounds for processing employee data, such as where it’s necessary for the performance of the contract, or to comply with its legal obligations.

However, where no alternative grounds apply, and the only option is to rely on consent, this should be obtained by way of a separate standalone document for a specific purpose, and employees must be informed of the right to withdraw consent at any time, and of how to withdraw. Employees would of course be free to withhold their consent.

Mandatory gender pay gap reporting

By way of a reminder, the Gender Pay Gap regulations came into force in April last year. Under the Regulations, private and voluntary sector employers with at least 250 employees are required to publish annual gender pay gap figures. Similar regulations came into force for large public sector employers also.

The first reports for public sector employers are due by the 30th of March this year, and by the 4th of April for other employers. The figures must be published on the employer’s website and also on the government website.

To date, about 600 employers (out of approximately 7,000 affected) have published figures. So many employers will be very busy finalising their reports over the coming weeks. Although not compulsory, there is the option to include a narrative which is useful to explain any pay gaps or other disparities revealed. So far, many employers who have published figures have chosen to do this, no doubt to limit any damage to their reputation which may be caused by a significant pay gap.

Regulatory references in the financial services sector

As part of the wider package of reforms introduced to improve accountability in banks and insurers, new rules on the provision of references for candidates for certain regulated roles, were introduced by the UK financial services regulators, the FCA and the PRA, in March 2017.

The FCA and the PRA intend to extend these rules on regulatory references to all other authorised firms, when the Senior Managers and Certification Regime is extended to all firms authorised under the Financial Services and Markets Act 2000.

The new regime was originally expected to be rolled out during this summer. However, the dates have now slipped and the new rules are not expected to apply until mid to late 2019.

Case law

There are a number of court hearings and decisions expected during 2018, which are likely to impact on employee rights in a variety of areas.

Firstly, the appeal hearing in the case of Ali against Capita Customer Management took place at the end of last year and the judgment is awaited.

This case concerned sex discrimination and the right to shared parental pay.

In the case in question Mr Ali brought a claim of sex discrimination on the grounds that, as a male employee, he was paid full pay for only two weeks’ paternity leave, and then only statutory pay during any period of shared parental leave - whereas his employer paid female employees enhanced maternity pay for a total of 14 weeks.

The tribunal upheld his claim of direct sex discrimination on the grounds that it was possible for him to compare himself with a hypothetical female employee on maternity leave, and that he was treated less favourably than such an employee by reason of his sex.

The tribunal’s decision contrasts with another, in which it was decided that the correct comparator for a man in Mr Ali’s position would be a woman on shared parental leave, not maternity leave, in which case no discrimination would have occurred.

The employer in Mr Ali’s case appealed to the Employment Appeal Tribunal, and the hearing took place in December.

We now await the outcome of the hearing, and clarification of whether it’s lawful for employers to pay enhanced maternity pay to women on maternity leave, but only statutory pay to those on shared parental leave.

Also awaited is the Court of Appeal decision in the case of Sash Window Workshop against King.

This follows the decision of the European court at the end of last year, that workers who are wrongly told they have no right to paid holiday, and who are therefore denied the right, are entitled to carry over their holiday rights indefinitely, and to be paid on termination in respect of all untaken holiday during the whole period of their employment.

The outcome of this case will have an impact, in particular, on the ability of those who’ve been wrongly or mistakenly categorised as self-employed (and have therefore not received any paid holiday), to claim back pay for unpaid holiday going back over several years once they establish “worker” status.

Future developments

Finally, a word on other proposals which may or may not progress during 2018.

You may recall that some time ago, the Government promised to consult on the extension of the right to shared parental leave to working grandparents.

The consultation was originally planned for May 2016 but was delayed due to the EU referendum. The new rights were to be introduced this year but the Government is yet to announce whether this proposal will be taken forward.

Conclusion

This video is intended to provide you with a summary of the key employment law developments expected in 2018. We shall of course keep you updated as to further developments, but if you would like any more information, or have any questions on any aspect of today’s topics, then please don’t hesitate to contact us.

Thank you.