2017’s landmark employment law lessons

Lucy Gordon outlines five milestones that will keep HR professionals busy well into the new year

It’s been a busy 12 months for HR professionals, and 2018 looks set to be no different. The removal of employment tribunal fees from July onwards, for instance, has already resulted in a marked increase in the number of claims, meaning savvy HR teams have had to begin factoring the greater ease for individuals to bring claims into their risk assessments. In 2018, we can expect the tribunal system to be heavily burdened with this increased volume, not to mention the administration associated with returning fees to the 60,000 or so claimants who have lodged claims over the last three years.

But what other legacies has 2017 left for the HR world?

1. Data protection

May 2018 brings the advent of the GDPR – a new EU law that heralds fundamental changes in the way we manage and process data.

In September, the UK government published the data protection bill, setting out proposals for how the GDPR will be honoured in UK legislation in preparation for Brexit. At the time of writing, this bill was at committee stage. All employers will need to keep abreast of developments in this area to ensure they understand the necessary changes to contracts of employment, practices and the management of employee data throughout the employment lifecycle.

2. Employment status

This year has seen increased focus on the ‘gig economy’, both in terms of the publication of the Taylor review and more cases looking at the issue of worker status. The growth of on-demand services has led to a marked increase in businesses trying to engage flexible workforces to meet fluctuating requirements in a cost-effective manner, but individuals are increasingly challenging the current approach, seeking categorisation as workers with the attendant rights to sick pay, holiday pay and the national minimum wage.

We await further developments on the heavily fact-sensitive test for worker status with appeals from Pimlico Plumbers and Uber among others, and the outcome of the Commons select committee enquiry.

3. A week’s pay

This year also marked the end of the long-held convention that the calculation of a week’s remuneration for the purposes of holiday pay, a basic award, statutory redundancy payments and protective awards under TUPE and TULRCA did not include employer pension contributions.

In University of Sunderland v Drossou, it was held that the understanding that section 221 of the Employment Rights Act 1996 only concerned payments that were actually received by the employee was actually incorrect. This judgment will therefore increase costs for employers when calculating these payments and should be taken into account in 2018 budgets.

4. Holiday pay

The gift that keeps on giving. Further case law has confirmed that voluntary overtime should be included when calculating holiday pay if it forms part of a worker’s ‘normal remuneration’. This has had a significant impact on overall costs for many employers but not least those engaging employees and workers via zero-hours contracts. Businesses will need to factor in these additional costs going forward and consider whether there remains contingent liability for claims from existing workers.

5. Recruitment

Finally, Brexit has caused confusion in some UK businesses around the employment of EU nationals after March 2019. We currently don’t know what deal will be reached in relation to these individuals working and residing in the UK after we have left the EU, but we do know that there are currently no changes to the Equality Act 2010. This means that, at least for the time being, it will constitute unlawful discrimination to reject or refuse applications from non-British EU nationals on the basis of their nationality alone. Employers are understandably uncertain about what the UK government has in mind but, at present, it is wise to understand the level of reliance their business has on EU labour and to await further developments before deciding on a different option.

Lucy Gordon is a senior solicitor at ESP Law