The Employment Law Changes of 2016

2016 will mark the first employment law changes by a Tory government since 1996, and there had not been been a period in recent memory in which so many crucial issues that could alter the direction of employment law are taking place. Here is an overview of the most important changes that all employers and employees should be aware of.

Gender Pay
The much anticipated revelation of the gender pay gap at UK businesses will finally come into force during 2016. From March 26th all organisations with a staff of 250 employees or more will be required to publish information regarding the difference in pay between their male and female employees. This will include information on the difference between bonus payments.

Technically it has been unlawful to pay women less than men ever since changes to the law were made in 1970, but it is hoped that with the enforcement of a duty to disclose such information will prevent women from being unfairly marginalised. It is believed that employers will be fully briefed on the exact information required before the full details need be released.

The National Living Wage
One major change to UK employment law will be the National Living Wage which comes into force on April 1st. Employees aged 25 and over will now be able to command a ‘living wage’, a payment that acts as a new top rate on minimum wage. This wage will be £7.20. However, for workers under 25 the minimum wage rate will still apply. Employers who fail to pay the minimum wage to their employees will now face twice the penalty they would previously have received.

Working Parents

This year will also see major developments to assist working parents. This includes a government proposal of granting 30 hours of free childcare to parents with children aged three or four, details of which will be announced later in the year.

The other major employment law change for child care in 2016 involves working grandparents who also care for their grandchildren being given the right to shared parental leave benefits. This will surely have a big impact on the structure of UK employment once the details of the change are finalised.

The Trade Union Bill
The Trade Union Bill 2015 is in the process of being ratified by Parliament and should come into affect in April. This bill is intended to put greater pressure on the trade unions before they can undertake strike action.

The main change this legislation presents is a new voting system that will decrease the likelihood of strikes occurring across work sectors that are more likely to disturb the day-to-day running of the country, such as the health and transport industries.

Under this new system half of all eligible staff will need to have voted in favour of striking before such a consequence can take place, and there must also be a four month time limit for such action to begin once the votes are cast. A longer notice period for strike action must also now be given to employers before it can be undertaken.

Another Trade Union Bill change that will benefit employers are plans to end the ban on businesses being able to hire agency workers to cover the shifts of striking staff.

Termination Payments
Termination payments could be taxed beginning in 2016 if the recently proposed alterations are sanctioned. The Office for Tax Simplification has outlined a plan that would make all terminations taxable. Currently only non-contractual termination payments under £30,000 are tax free.

The Immigration Bill
The law for employing foreign workers will also change massively in 2016 due to the immigration bill which seeks to penalise employers who hire workers from abroad illegally. This bill also requires all public-sector employees to have the ability to speak fluent English. An ‘immigration skills charge’ may also be introduced on employers who hire foreign labour.