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Changes to Employment Law – April 2015

The changes to Employment Law coming into effect as of April are as follows:

1. Shared Parental Leave and Pay

The new system of shared parental leave and pay is introduced, aiming to provide greater flexibility in how parents share the care of their child in its first year. Parents of babies expected on or after 5 April 2015 will be able to share up to 50 weeks off work, something which the government hopes will encourage fathers to spend more time with their children.

Under shared parental leave, mothers will be able to commit to ending their maternity leave and pay at a future date, and share the untaken balance of leave and pay as shared parental leave with their partner. The amount of shared parental leave to which an employee is entitled will depend on the amount of leave that the other parent has taken in respect of the child.

Acas’s guide to Shared Parental Leave is a good place to start to get a handle on what the new rights mean. You can access it here The Department of Business Innovation and Skills has developed an online calculator to help employees calculate their shared parental leave and pay entitlement which you can access at: DCL can help you deal with any requests or questions you receive regarding shared parental leave.

2. Changes to Adoption Leave and Pay

The Paternity and Adoption Leave (Amendment) Regulations 2014 come into force on 5 April 2015 and will make significant changes to adoption leave to bring it into line with maternity and paternity leave. For further information, read more.

• The requirement to have 26 weeks’ employment with the same employer to qualify for adoption leave is removed, coming into line with the eligibility requirements for maternity leave.

• Statutory adoption pay comes into line with statutory maternity pay by setting it at 90% of average weekly earnings for the first six weeks.

• The Regulations further provide that paternity leave cannot be taken in relation to a child where shared parental leave has already been taken; and ensure that if an employee has exercised the right to paid time off to attend an adoption appointment he or she cannot then take paternity leave rather than adoption leave.

• Protection is provided for employees who suffer detriment or dismissal in relation to time off for adoption appointments and the right to return to work following paternity or adoption leave is amended to take account of the introduction of shared parental leave.

3. New Right to Attend Adoption Appointments

The Children and Families Act introduces a new right to attend adoption appointments as of 5 April 2015. The main adopter will be able to take time off to attend up to five appointments, while the secondary adopter will be entitled to take time off for up to two such appointments. The time off is “for the purpose of having contact with the child or for any other purpose connected with the adoption”.

4. The Right to Take Unpaid Parental Leave Extended

The right to take unpaid parental leave currently applies to parents of children under five (or 18 if the child is disabled). As of 5 April 2015, this right is extended to the parents of any child under the age of 18. Please note that this form of unpaid parental leave is different to the shared parental leave mentioned in point 1 above.

5. New Rate of Statutory Maternity, Paternity, Adoption and Shared Parental Pay Introduced

As of 5 April 2015, the rate of statutory maternity pay, statutory paternity pay and statutory adoption pay increases from £138.18 per week to £139.58 per week. Statutory shared parental pay is also set at £139.58 per week.

6. Employer National Insurance Contributions Abolished for Workers Aged Under 21

In order to encourage youth employment, employer National Insurance contributions are abolished for employees aged under 21, who earn up to the upper earnings limit. This change applies from 6 April 2015.

7. New Rate of Statutory Sick Pay

With effect from 6 April 2015, the standard rate of statutory sick pay (SSP) increases from £87.55 per week to £88.45 per week.

8. Limits on Tribunal Awards and Statutory Payments Increase

From 6 April 2015:

• The maximum compensatory award for unfair dismissal increases from £76,574 to £78,335.

• The maximum amount of a week’s pay, used to calculate statutory redundancy pay and other awards, such as the basic and additional awards for unfair dismissal, rises from £464 to £475.

9. ET Rules that UK Law Can Be Interpreted to Include Commission Payments In Holiday Pay

The employment tribunal in Leicester has handed down its long-awaited decision in Lock v British Gas. This needs to be treated with some caution, as Tribunal decisions do not technically bind other Tribunals.  However, the main findings are worth noting. Read more for details.

  • The Working Time Regulations must be read as requiring holiday pay to reflect results-based commission, so as to comply with EU law.
  • The amendment made by the Employment Tribunal to achieve this result is to deem employees who earn commission as being employees whose earnings vary according to the amount of work done for the purposes of calculating a week’s pay.  Although the Tribunal did not confirm the point, this ought to mean that the rate of holiday pay should be calculated according to the employee’s average hourly rate (including commission) for the 12 weeks preceding the week in which the leave was taken.
  • This ruling applies only to the 4 weeks of EU leave, and not to the additional 1.6 weeks’ leave under the Regulations.
  • The case has no direct relevance to the issue of voluntary overtime, although it does demonstrate that if EU law is interpreted as requiring holiday pay to reflect voluntary overtime then the UK courts will have little difficulty in bending the Regulations to give effect to that interpretation.

10. Fit Note Guidance To Include Fit For Work Service

The Department for Work and Pensions (“DWP”) has updated its guidance for employees, employers and line managers on fit notes to include details of the new Fit for Work service. The updated guidance for employers includes a case study in which an employer makes adjustments to a role following a Fit for Work assessment. Click here to access DWP’s guidance for employers and line managers. For our previously published overview on how the Fit for Work service will work, please click here to [read more]

The contract for the Government’s new Fit for Work service (“the Service”) has been awarded to Health Management Limited (“HML”), one of the largest occupational health providers in the UK.

The Government-funded health service, which was launched in December 2014 with a phased roll out until May 2015, seeks to assist employees who are sick and off from work, by providing them with an occupational health assessment when they have reached over four weeks sickness absence. The new scheme is predicted to reduce sick pay costs to business in the UK by £80 million to £165 million a year, whilst also increasing economic output by up to £900 million a year.

Service provided to an individual under the scheme will feature two aspects:

1. Assessment service: Upon reaching, or in anticipation of four weeks sickness absence, the employee’s GP will make a referral to HML for an assessment, who will identify any issues which prevent the employee from returning to work, recommendations for treatment and will produce a report detailing a “Return to Work Plan”. A case manager will also be appointed to help facilitate better understanding of any recommendations and required support to the employee.

2. Advice service: Any health and work advice will be made available to employees, employers and GPs via the phone line and website.

The Service will be provided by HML in England and Wales, and in Scotland, by the Scottish government. For any medical treatments which are recommended to an employee under the Service or through an employer-arranged occupational health service, a tax exemption of up to £500 a year will apply.

It remains to be seen how effective the new health service will be, particularly as any reports produced by HML will be based on advice delivered via the phone or internet, as opposed to a face-to-face offering. The structural process of the Service (e.g. production of reports/Return to Work Plan) does not require much upfront involvement on the employers’ part, whilst the scheme does not tie in with any other aspects of employee benefits such as private medical insurance. Employers must therefore have a clear process in place which allows them to take reasonable steps in dealing with any sickness and absence issues, ensuring employees are supported, irrespective of whether they make their own occupational health service referrals or rely on the Government’s scheme. Reports produced under the Service by HML will often require action by the employer; thus, understanding of how this Service should be approached is crucial. Click here to access the Government-published summary for the Service.

And Finally

Parliament will dissolve on 30 March 2015 and the outcome of the general election will dictate the direction of employment law from the second half of the year onwards.