We look at the employment law rulings and legislatory changes that have been affecting UK HR teams over the past 12 months
Compliance requirements dominated the agendas for many UK organisations during the first six months of 2018. For HR professionals dealing with the urgency to become more transparent and open about company information, and more accountable in protecting an individual’s integrity, 2018 was a year of juggling regulatory requirements with developments around the future of the work, which we will explore in more detail in the second part of our 2018 review.
Here we assess five major compliance challenges that HR teams tackled this year.
Employment tribunals and dispute over ‘worker’ status
Following the abolition of tribunal fees in 2017, there has been a surge in cases making their way through employment tribunals. Personnel Today reported in November that the average waiting time between the filing of a case and a hearing reached 207 days in the 12 months to 31 March 2018, with the courts’ outstanding employment caseload totalling 336,637 – up 23% compared to the year before.
Hitting the newspaper headlines were ‘gig economy’ cases that concentrated on the employment status of individuals and their working relationship with companies such as Pimlico Plumber, Uber and Deliveroo. These cases focused on workers’ rights, contracts and the definition of these firms’ business models.
In February, the government’s response to last year’s Taylor review was to accept all but one of the report’s recommendations. In May and June, the government held consultations on how best to bring about the suggested reforms and divided them into four separate categories: employment status; increasing transparency in the labour market; agency workers and enforcement of employment rights.
At the end of this year, and currently in Manchester’s law courts, is a tribunal claim brought by Olympic cyclist Jess Varnish against British Cycling and UK Sport for wrongful dismissal and sex discrimination. In this case’s first stage, she must prove she was employed and not self-employed. The results could not only have repercussions for athletes’ funding but have an impact for gig economy workers with regards to tax, pensions, holiday and sick pay.
Given the increasing number of tribunal cases, and the high-profile reporting some are receiving, this year is proving to HR professionals that they need to be much more aware of the commercial, financial and reputational implications of a decision to dismiss an employee.
General Data Protection Regulation
On Friday 25 May, the General Data Protection Regulation (GDPR) came into effect, clarifying how companies collect and manage personal data. At the time, this created a flurry of policy activity as HR teams rushed to meet the deadline and ensure that any data relating to employees, volunteers, customers and suppliers were being collected, held and used within the GDPR’s rules.
Individuals can now request to see what personal data an organisation holds on them, free of charge, and have more say over what is done with their data – including the ‘right to be forgotten’ (ie to request all data that the company has about you to be destroyed).
A maximum fine of €20 million or 4% of annual turnover (whichever is highest) could be levied in the event of a serious data breach. More than six months on, the Information Commissioner’s Office (ICO) has taken enforcement action against companies such Facebook, and we can expect next year to see more organisations face hefty fines and embarrassing publicity following significant data privacy and security breaches.
Six months on from the GDPR’s introduction, a CIPHR survey discovered that, although the majority of organisations have done the necessary work to write policies, create new procedures and train staff, there remain questions over whether data-protection principles have actually been built into the organisations’ design and are being adhered to consistently.
Equality and inclusivity
While the GDPR is designed to protect an individual’s data privacy, gender pay gap reporting is designed to prompt organisations to take action to remedy gender inequality.
Earlier this year, HR Grapevine reported a staggering 87.9% of women said that they’d been paid less because of their gender.
After the gender pay gap consultation in February, led by the Equality and Human Rights Commission (EHRC), measures were set out to enforce the reporting of an organisation’s differences between the average hourly earnings of men and women in women. All public bodies were due to report by 30 March 2018, and all private companies with more than 250 employees had to submit their reports by 4 April 2018, with the results published on the government’s website.
According to The Guardian’s analysis, 8 in 10 private companies and 9 in 10 public-sector bodies pay men more than women. At the time, Sam Smethers, chief executive of the Fawcett Society, said of the reports: “It’s a game changer. It forces employers to look at themselves and understand their organisations, and it prompts employees to ask some hard questions.”
Around 1,500 organisations failed to meet the deadline, although a ‘shaming’ report is yet to be published. Bloomberg reports that those found to be in violation of the 2010 Equality Act will face unlimited and unspecified fines. These companies are also likely to face internal pressure from their staff for change, as well as reputational damage.
Adding further pressure to organisations to be more transparent, executive pay gap reporting regulations was announced in July. These come into force on 1 January 2019 and require UK employees to report annually on the pay gap between their chief executive and their average UK worker. The report must also provide what action the company has taken to improve employee engagement and consultation.
A consultation on ethnicity pay gap reporting began in October and closes in January 2019. In the meantime, HR Grapevine highlighted the importance of inclusivity in affecting our feelings towards our employers, citing research by the Billie Jean King Leadership Initiative and Deloitte.
The #MeToo movement has shown that employees are more aware of their rights than ever and are much readier to call out bad behaviour, made easier by the speed and ease of social media and platforms for anonymous reviews of employers. HR needs to protect reputations, to be accountable, and to lead the charge by taking positive steps on social issues and building trust with their employees said HR Magazine.
In November, the Parliamentary Women and Equalities Committee launched an enquiry into the use of non-disclosure agreements (NDAs) in cases involving any form of harassment or other discrimination, including pregnancy or maternity discrimination, or racist abuse.
Statutory maternity (SMP), paternity (SPP), adoption (SAP) and shared parental pay (ShPP) rose in April from £140.98 to £145.18 a week. People Management reported that the obstacles to the uptake of paternity leave are not just related to the low level of statutory paternity pay but also to issues about working culture and the traditional views of men and their caring responsibilities in society. Research from the TUC earlier this year revealed roughly one in four new dads would have been ineligible to claim SPP in 2017-18, partly down to rising levels of self-employment.
The workplace childcare voucher system was abolished in October following the introduction of Universal Credit. The vouchers are to be replaced by a new method of tax-free childcare, entitling families to claim up to £2,000 per child.
Brexit paralysis continues
When it comes to employment law, Brexit is very much a ‘wait and see’ situation. There has been much debate about what might change; regulations such as TUPE are expected to be amended, the Agency Worker Regulations are widely expected to be repealed, and the calculation of holiday pay would be likely to be high on the government’s agenda when we exit the EU. Currently, the UK is expected to exit the EU on 29 March 2019, and so there’s not a lot that will change in the immediate future from a legal standpoint.
However, much has changed in the expectation of HR’s role as a profession. In part two of our 2018 review, we will examine a new development in the workforce culture, with the increasing use of data analytics to inform business strategy, alongside the integration of HR tech to increase productivity and automate mundane administrative tasks.