10 Jan 2019

2019 looks set to be a busy year for employment law professionals. In this article, we summarise the main developments.

The 'B' word

No article on legal developments in 2019 would be complete without a reference to Brexit, although at the present time we do not know whether the deal that Theresa May struck with the EU will be approved by Parliament, or whether we will be leaving the EU with no deal. What does this mean for employment law? If the deal is approved, there will be a transition period until 31 December 2020, during which most EU law will continue to apply to the UK and the ECJ will still have jurisdiction so it will be business as usual, although it is being reported that the Government is considering giving extra protections to workers in order to win support from the Labour Party for its EU withdrawal agreement.

In a "no deal" Brexit, there will be no transition period but we are told that there will only be minor linguistic changes to employment law. However, UK employees will not be able to request to set up European Works Councils, and rights on insolvency where the employee is based in the EU may be affected. In addition, there will be major changes to immigration law following Brexit as a result of the cessation of free movement.

Reviews, reports and consultations

The Department for Business, Energy and Industrial Strategy is due to carry out a review of the Acas early conciliation scheme this year and will make recommendations. It is also due to review the operation of the Flexible Working Regulations so we can expect to see some minor amendments in these areas. 

The Migration Advisory Committee is expected to report by Spring 2019 on the composition of the shortage occupation list. An independent review into the Modern Slavery Act 2015 is due to report by 31 March and may lead to some changes.

The consultations on ethnicity pay reporting and employment law hearing structures both close on 11 January, and the consultation on the national minimum wage rules regarding salaried workers and salary sacrifice schemes is open until 1 March. The Government promised various consultations in its Good Work Report in relation to atypical workers, which we expect to be published this year, although most of the legal changes will not take place until 2020.

Corporate governance

The revised UK Corporate Governance Code applies to accounting periods starting on or after 1 January 2019. All companies with 250+ employees will have to report on the extent of their employee engagement (using one of three specified methods), and listed companies with 250+ UK employees will have to report on the ratio of their CEO's pay to average pay. The new FRC Guidance on Board Effectiveness also applies to accounting periods starting on or after 1 January and will have implications for diversity on boards

Gender pay reports

The next set of gender pay reports is due in spring, with public sector employers reporting by 30 March and private sector employers releasing their reports by 4 April.

Apprenticeship levy

In an attempt to boost the number of apprenticeships, from April 2019 levy paying employers will be able to invest up to 25% of their levy to support apprentices in their supply chains.

National minimum wage

The annual increases in the national minimum wage will take effect on 1 April, with the national living wage (applicable to workers aged 25+) rising to £8.21 per hour and the adult rate increasing to £7.70 per hour.

Statutory payments

Proposed statutory rates have been published for adoption, maternity, paternity and shared parental pay (£148.68 per week) and statutory sick pay (£94.25 per week) but they have not yet been confirmed. They normally apply from early April.

Employment tribunal limits

Increases to maximum employment tribunal awards (such as a week's pay, the basic award and the compensatory award) traditionally take effect from 6 April but have not been announced yet.

New payslip requirements

From 6 April, payslips will have to be provided to all workers and not just employees. Where a worker is paid on an hourly rate basis, the payslip will have to show the total number of hours worked. If a worker is paid different rates of pay for different types of work, a breakdown must be provided.

Higher penalties for breaches

The maximum penalty for an "aggravated" breach of employment law will increase from £5,000 to £20,000 on 6 April. However, this power has rarely been used by the employment tribunals and it remains to be seen whether the increase will make any difference to compliance.

Interesting cases

The courts are set to decide a number of interesting issues this year, including what is thought to be the first restrictive covenant case to come before the Supreme Court (or the House of Lords as it was) for over a century. The Court will look at whether a non-compete provision was valid where the employee was prohibited from holding any shares in a competitor. 

Assuming permission is granted, the Supreme Court will hear the appeal in the sleep-in workers case, which could have major ramifications for employers in the care sector. The issue here is whether care workers who are required to spend the night at clients' premises but who can sleep when they are not working should receive the national minimum wage for the whole of their night shift, or only the time they are awake and working.

In addition, we expect the Supreme Court to hear an appeal by Uber in relation to the employment status of its drivers. 

The Court of Appeal will be busy this year and will consider whether suspension was a repudiatory breach of contract, entitling the employee to resign and claim constructive dismissal. In a separate case, it will look at whether an employee could bring a claim for direct discrimination based on a perceived disability. The Court of Appeal will also be grappling with an interesting question arising from the Agency Workers Regulations: in a claim for the same employment conditions as permanent employees, does each term have to be looked at individually or should the employment tribunal take all the employment conditions as a package?

Seminars

We will be holding regular seminars throughout the year. We start the year with some seminars on Brexit and immigration law in January and February, and the next series of our popular employment clubs will be taking place in March. We will also be holding our retail and transport HR seminars in March. For details, please see here.

Employment law timeline

You can keep up to date with what's on the horizon by looking at our interactive employment law timeline.