Employment law can be fast moving and in these days of political and economic uncertainty it is more important than ever for HR teams to provide practical advice to business. A medium to long term strategic HR plan needs to look beyond Brexit and consider what opportunities and challenges might be presented over the next five to ten years. Contributors Emma Shipp, Partner, and Valerie Lambert, Partner – Hewitsons.
Businesses with more than 250 employees will need to undertake gender pay reporting in the same way as last year. As this is the second year of reporting, naturally comparisons will be made not only with other businesses but also with last year’s figures. Quoted companies also have to report on CEO pay and specifically the ratio of CEO pay to that of their average employees.
Reporting is set to become an increasing feature of business life with current requirements likely to be extended to smaller businesses. HR teams need to be able to manage that data and also provide robust plans for ensuring that the direction of travel for the business is attractive for current and future employees.
Some of the diversities of pay between men and women which remain significant and which gender pay reporting is aimed at combating, resulted in equal pay claims. In fact equal pay claims against large employers saw a significant increase last year and commentators believe that trend is set to continue with a trickle-down effect seeing smaller businesses facing significant claims. Risk management is a key objective for HR teams and many are conducting equal pay audits to inform the business of areas where challenges could arise.
As well as these types of strategic concerns, HR teams need to keep up to date with practical matters such as National Minimum Wage rises announced in the last budget. This takes effect from April and, at the same time, minimum contribution for auto-enrolment pension schemes are also increasing.
Medium term planning
Brexit needs to be on your radar although at this point in time it’s hard to be definitive about what changes that may bring. For the time being, undertaking an audit of your staff so that you are aware of those who may be impacted and keeping in close contact to allay immediate worries should be a priority.
Changes to data protection regulations which came into force last May had a significant impact on the way in which we handle data and most businesses have introduced new policies and procedures in response.
We have yet to see examples of the penalties issued by the Information Commissioner’s Office for failure to comply with the GDPR or indeed breaches of the GDPR. Elizabeth Denham has taken on more employees and been given more funds to better pay employees in order to deal with complaints arising from the GDPR. Once details of penalties and sanctions issued by the Information Commissioner’s Office start to filter through businesses may need to review their current policies, procedures and security in relation to data protection.
Longer term trends
Advances in technology, changes in business needs and employees’ requirements to work flexibly have resulted in a fairly rapid change to the way in which many people work. The rise of the gig economy has seen more people on contracts providing for atypical work patterns such as independent contractors and zero hours contracts. Employment law has lagged behind resulting in difficulties categorising workers as demonstrated by the high profile Uber, Deliveroo and Pimlico Plumbers cases.
Legislation is expected over the next few years following the publication of the Government’s Good Work Plan to provide more clarity and protection for those on atypical work contracts. For example, legislation has been proposed to prevent agency workers from contracting out of their right to be treated on the same basis as employees of a business (the so called Swedish Derogation) and this is likely to be in force next year. Other changes will follow to put the Government’s proposals into effect.
Knowing where your risks may lie is key to keeping on top of this evolving area. Have clear guidelines as to how you categorise your work force and ensure to keep those guidelines up to date in light of the latest case law and legislation.
Reporting on statistics of your business is likely to be an increasing requirement for the HR team. In addition to the current obligations, noted above, additional data such as ethnicity reporting is on the horizon with the government consulting on introducing mandatory ethnicity pay reporting obligations for employers. This provides specific challenges as currently there is no obligation on an employee to disclose ethnicity nor on the HR team to seek to collect this data.
This is not an exhaustive list of current and proposed changes in the employment law arena. With HR teams becoming more and more at the forefront of risk management on behalf of the business, keeping up to date with the current and emerging trends and looking beyond Brexit is key to a successful HR strategy.