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2017 Brexit and the gig economy law will dominate

Geoff Isherwood

The two main topics set to continue dominating headlines throughout the year – Brexit and the gig economy. ELAS Legal Services Manager Geoff Isherwood takes a look at what we can expect.

One thing is clear – everyone will be affected by the change when Britain leaves the EU, however, it will take 2 years to negotiate an exit once Article 50 has been triggered. The transition will require enormous negotiation and while it’s safe to assume that the government won’t simply repeal all EU related employment law, it’s undeniable that the UK employment landscape will alter. However we can expect to things to be business as usual for quite some time. The Prime Minister has set a deadline of March 31st for invoking Article 50 by notifying the European Council of Britain’s intention to leave the EU but first, the Supreme Court is expected to deliver its ruling on whether or not an Act of Parliament is required in order to trigger Article 50.

The UK is bound by many employment laws now in existence here and in Europe and it will take individual acts of parliament to change any of these which will only be political dependent on which party is in power and when general elections are due. Some of the areas we can expect to see change once Britain does leave the EU include Working Time Regulations, Agency Worker’s Rights and Right to Work. Other areas of interest include health and safety legislation, food regulations and EU workers. Furthermore, the UK has always been a strong democracy and, despite promising to repeal the EU Bill of Human Rights, the government has also promised to introduce its own Human Rights Act.

The immediate result in the vote has clearly been a loss in the value of the pound due to the uncertainty of the situation which, due to its previous strength and the recent backing from the Bank of England, can only get better as time moves on.

The gig economy
The gig economy is another area to watch in 2017. The Uber tribunal verdict which was handed down in October has far reaching implications when it comes to the future of the gig economy. Uber has appealed the verdict, which ruled that the terms and conditions of the arrangement two drivers had with the company meant that they should be classified as workers rather than self-employed and, as such, were entitled to national minimum wage, holiday pay, rest breaks and the protection of the whistleblowing legislation. Other cases have been brought against Deliveroo and CitySprint and there have been well publicised investigations into companies such as Sports Direct and Amazon and their use of zero hours contracts.

Employment status has long been the greyest area of employment law – is someone self-employed or are they really an employee or a worker? The future of the gig economy and zero hours contracts will likely be determined by the results of these tribunal cases and, should the tribunal appeal court uphold the Uber verdict it is likely to open the floodgates for similar claims.

Modern Slavery
New changes on modern slavery came into effect for any private organisation in the UK with a year ending after 31st March 2016 and a turnover greater than £36 million (including subsidiaries) obliging them to either provide a statement showing the steps they have taken to ensure that slavery and human trafficking are not taking place in any part of their business or supply chain, or a statement that it has not taken any such steps. Such companies are advised to file the required statements as the Secretary of State can apply to the High Court for injunctions against them if not done and prison sentences can follow for directors. ELAS can prepare such statements with the requisite contents to satisfy the government if requested.

National Minimum Wage / National Living Wage
These are two areas which will continue to increase in 2017, with the next raise coming on 1st April taking the National Living Wage up to £7.50 per hour. We are unlikely to see any changes when it comes to NMW/NLW following the triggering of Article 50 as this was very much a British idea and regulation is not required by European law. Furthermore, the UK National Minimum Wage is significantly higher than that in similar European systems and the government recently introduced the National Living Wage. The government introduced a ‘name and shame’ policy for employers who are found to be paying under the National Minimum Wage.

Apprenticeship Levy
A new initiative which will take effect in April 2017 is the new apprenticeship funding for 16-18 year olds and 19-24 year olds to encourage employers and young workers alike to increase job opportunities and production accordingly. A levy of 0.5 percent of an employers pay bill will be introduced on large employers (those with payrolls over £3million) to fund 3 million additional apprenticeships over the next five years. Each employer will receive £15,000 to offset against their levy payment. A full copy of the new structure can be downloaded from the Department of Education.

Gender Pay-Gap Reporting
This new law requires large employers (companies with 250 employees or more) to publish mean and median gender pay gaps from April 2017. The first reports are due to be published in April 2018 for the period covering April 2017-April 2018. Information on any bonuses paid also needs to be published in April 2018 for the 12month period ending April 2017. Employers cannot ignore this. Companies should be gathering the data now to ensure that they comply with the reporting procedures ready for April 2017.

While there is no obligation for companies to explain the gender pay gap nor any duty to address it if a company is complying with the Equality Act, a failure to do so may lead to a heavy amount of adverse publicity. Furthermore, the best candidates may not be attracted to working for companies with a big gender pay gap if they feel that their gender will adversely impact on their career prospects.

Free Childcare
The government is planning to double the number of hours of free childcare for 3 and 4 year olds in working families from September 2017. It will increase from the current 15 hours to 30 hours. Pilot programmes were introduced in some areas in Sept 2016.

Salary sacrifice schemes
As of 6 April 2017 the government will abolish tax savings through many salary-sacrifice schemes, aside from those related to pension savings, child care, cycle-to-work or ultra-low emission cars. Those which are in place prior to April 2017 will be protected until April 2018 while any arrangements related to cars, school fees or accommodation will be protected until April 2021.

Data Protection Changes
The EU General Data Protection Regulation (GDRP) was passed in May 2016. While it doesn’t take effect until May 2018, the scale of the changes mean that preparing for GDRP should be a priority for employers in 2017. This regulation will take effect before the UK exits the EU so employers need to be prepared. Those who are not compliant risk fines of up to €20 million or 4 percent of their annual worldwide turnover, whichever is higher.

It’s difficult to predict exactly how the Data Protection Act will be affected by Brexit however it’s unlikely that it would be repealed as to do so would cause public outrage.

Onboarding inefficiencies costing UK businesses £200million * a year
Inefficiencies found in the onboarding process are costing UK businesses £200 million a year, according to new research by webonboarding, part of the webexpenses suite of cloud software solutions. The research, which uncovered the costly findings, found that 15 percent of employees who leave in their first year, leave within the induction period. With a typical spend of £804 (in-house and externally) on recruitment costs per candidate and with nearly a quarter (24 percent) of HR decision makers’ time allocated to the onboarding process, losing candidates within the initial stages can lead to significant financial implications to the business.

The research also found grave inefficiencies through the sector in regards to manually chasing and processing information. Issuing offer letters in a timely way was cited as a problem for the majority (69 percent) of HR professionals surveyed. More than two thirds (69 percent) also said chasing up successful candidates to return completed or missing documentation was a drain on their time, while accuracy or completeness of information provided by the prospective employee was cited as the most common problem of holding up the process (63 percent).

Despite inaccuracy clearly being a key issue in the onboarding process, nearly three in five (58 percent) still rely on manually entering information onto their HR and payroll systems. This can have a significant impact on the success of the hiring process, with nearly half (47 percent) of those asked saying delays in issuing an offer has meant losing their preferred candidate to a counter offer.  Not only are organisations missing out on top talent, but with a typical spend of £804  (in-house and externally) on recruitment costs per candidate, losing onboardees in initial stages has further financial implications to the business.

To tackle these problems and help streamline processes for HR managers, webonboarding is the very latest in onboarding technology designed and developed as part of the webexpenses suite of cloud based solutions. Using cloud technology, the software automates the whole onboarding process to bring greater efficiency and reduce time and money, and the number of dropouts in the crucial first stages as well as other benefits including standardising the process. Melanie Guy, HR Manager of webexpenses, said:

“Our research shows that there are clear inefficiencies throughout the onboarding process that HR managers and the wider business need to address, in order to attract and retain talent. If businesses are to succeed, particularly in the current unpredictable climate, they need to ensure their processes are as accurate and efficient as possible.”

“The webonboarding technology enables businesses to expedite the process and reduce the number of inaccuracies which can often lead to costly issues later down the line. There is also a greater expectation by today’s job seeker that technology will be used to streamline the information exchange. The instant reporting enables both the business and the onboardee to track each stage of the process. Importantly, it helps to engage and introduce them to the company culture in the very early stages.”

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