In June 2016, employment in local government was just under 2.2 million, which represents a fall of 13,000 (0.6%) on the previous quarter and 73,000 (3.2%) on the previous year.
Academy conversions are in part responsible for this as employees move from local government to central government employment. However, according to the Office for National Statistics, this only accounts for 9,000 of the 13,000 fall over the last quarter. It seems the government’s further budget cuts are continuing to impact on local government. Will a new Prime Minister signify a change in approach? Time will tell.
Having now received Royal Assent, the Enterprise Act 2016 has inserted the Regulations into a new section within the Small Business, Enterprise and Employment Act 2015, and introduces a cap of £95,000 on exit payments made within the public sector.
The cap will include the employer’s cost of funding early access to unreduced pensions, which is likely to have a significant impact on how any additional termination payments negotiated under settlement arrangements are determined.
The Enterprise Act will be brought into force in stages by secondary legislation, though the dates have not yet been confirmed.
In addition, the government is proposing to make wider reforms to public sector exit payments to bring practices more in line with the private sector.
Recognising that it would be difficult to achieve a ‘one size fits all approach’ across all areas of the public sector, local government is now expected to try to agree reform to their current arrangements in line with the government’s proposed framework by June 2017. If this cannot be achieved, then the government will consider primary legislation to achieve reform. These reforms will have far greater impact than the £95,000 cap as only 3% of payments were thought to be over this figure in 2014/15.
On 4 May 2016, the Trade Union Bill received Royal Assent and became the Trade Union Act 2016. It requires:
‘Important public services’ include health services, education of those aged under 17, fire services, transport services, border security and decommissioning of nuclear installations and management of radioactive waste and spent fuel.
The Act will be brought into force by a subsequent statutory instrument, though it is not yet clear when.
We are continuing to see case law developments in this area and the position is becoming clearer. As a reminder, the central question the courts are being asked to consider is which elements of a worker’s remuneration should be included in their holiday pay?
We have known for a while that commission should be included (Locke v British Gas) and that compulsory overtime should also be included (Bear Scotland). However, there has been ongoing challenge in respect of other types of payments and allowances.
Of particular note for local government is the case of Wood and others v Hertel (UK) Ltd and another. Employees received daily travel allowances and pay for travelling to sites more than eight miles away. Part of the payment was reimbursement for expenses and part was taxable remuneration. The Employment Appeal Tribunal held that the taxable element formed part of the employees’ normal pay for the purposes of calculating holiday pay.
We have also recently had a tribunal decision in the case of Brettle v Dudley Metropolitan Borough Council dealing with voluntary overtime. Voluntary overtime is where there is no obligation on the employer to offer overtime and no obligation on the employee to undertake overtime if offered. The tribunal held that where this overtime was regularly worked, it should be included in a holiday pay calculation. Please note, this is only a first instance decision and may be appealed.
Remember, these decisions only relate to the less generous 4 weeks’ annual leave entitlement required under the European directive and not the additional 1.6 weeks’ permitted under the UK legislation.
The decisions in these cases could leave local government employers vulnerable to claims for back pay from employees. Now would be a good time to review the provisions you have in place and take remedial action if necessary.
The government wants to encourage more and better quality apprenticeships with a view to boosting the skills of the workforce and economic productivity.
To this end, from April 2017, government funding of apprenticeships in England will change, with the introduction of the apprenticeship levy.
The key points of the new system include:
Employers who are required to pay the levy might as well make use of the available funds for apprenticeship training, or the net result will be that they pay the levy and don’t get anything in return.
Guidance is available on the gov.uk website, with more expected towards the end of the year. In the meantime, the government is still consulting on some aspects of the scheme.
Whilst the final regulations are yet to be published, mandatory gender pay gap reporting for large private and public sector employers is expected to be brought into effect by April 2017.
Contents of the Gender Pay Gap Report
The draft regulations would require affected employers to publish:
Employers will have the option to include a narrative explaining any pay gaps and setting out what action they plan to take to close them. The provision of a narrative will be strongly encouraged in the guidance accompanying the regulations, but it will not be mandatory.
Timing and Publication
Affected employers must analyse their gender pay gap each April, and publish their gender pay gap report within 12 months. Thereafter, they must produce and publish an annual report. The report must be published on their own website and it must be kept online and publicly available for three years. They must also upload the information to a government website.
Enforcement
The draft regulations do not contain any enforcement provisions or sanctions for non-compliance. However, the government has stated that it will run checks to assess for non-compliance and publish tables, by sector, of employers’ reported gender pay gaps. It will also consider the option of publicly identifying those employers who have not complied.
The Shared Parental Leave regulations have been in place now since April 2015. To recap, Shared Parental Leave (SPL) is a more flexible system of leave that enables both parents to take leave in the first year of a child’s life.
Initial studies have suggested that take up of SPL by male employees has been low but obtaining an accurate picture has been challenging.
The government has plans to extend Shared Parental Leave and pay to working grandparents by 2018.
A consultation on this proposal was initially proposed for May 2016 on how to implement its commitment to extend Shared Parental Leave and Pay to working grandparents but this has been delayed due to the EU referendum. When it happens, the consultation is expected to also cover options for streamlining the Shared Parental Leave and Pay system, including simplifying the eligibility requirements and notification system.
We now know that Theresa May intends to trigger Article 50 by March 2017. Mrs May has also promised a ‘Great Repeal Bill’ to remove the European Communities Act 1972 from the statute book and enshrine all existing EU law into British law.
The Great Repeal Bill will end the jurisdiction of the European Court of Justice in the UK. It is thought that it will also enable Parliament to amend and cancel any unwanted legislation although the detail of how this will work is unclear. So, what could this mean for employment law?
The Secretary of State for Exiting the EU, David Davis, has indicated that existing employment law in the UK will not be overhauled.
Writing about ways to make Britain a better place to do business, Mr Davis confirmed that 'Britain has a relatively flexible workforce, and so long as the employment law environment stays reasonably stable it should not be a problem for business'.
Acknowledging the broad range of working people who voted for Brexit, Mr Davis confirmed that he was not in favour of 'rewarding them by cutting their rights'.
More recently however, the Business Minister Margot James declined to give a direct answer to the question of whether she could 'guarantee that all employment protections currently enjoyed by British workers will be maintained post-Brexit', instead stating that 'employment protections are an absolute priority for this government'.