Employment law developments in 2018

2018 promises to be another busy year for employment law.  Here are some key developments to be aware of.

Taxation of termination payments – From April 2018, all payments made in lieu of notice will be subject to income tax and national insurance.  Currently, such deductions are not necessary where there is no contractual right to make a payment in lieu. 

Additionally, any aspect of a termination payment that exceeds the £30,000 tax free threshold will now be subject to deductions for employer National Insurance contributions (currently, only income tax is deductible).

Data protection – The EU General Data Protection Regulation (“GDPR”) comes into force on 25th May 2018, expanding individual data protection rights while toughening the penalties for breaches.  Of note for employers is that blanket consent obtained at the commencement of employment (for example, to share employee data, or for consent to attend medical examinations) is unlikely to be compliant.

Gender pay gap reporting – Private and voluntary sector employers in England, Wales and Scotland with at least 250 employees will be required to publish their first reports on gender pay differences by 4th April 2018.  The reports should show the differences in pay between men and woman at an organisation as at 5th April 2017.   Large public sector employers will have to provide similar reports by 30th March 2018.

Increases in wages and payments – From April 2018 the National Minimum Wage will increase to the following:

Workers aged 25 and over:

£7.83 an hour (National Living Wage)

Workers aged 21 and over:

£7.38 an hour

Development rate for workers aged 18-20:

£5.90 an hour

Young workers rate for workers aged 16-17:

£4.20 an hour

Apprentice rate

£3.70 an hour

Statutory maternity, paternity, adoption, and shared parental pay will rise from £140.98 to £145.18 per week from April 2018, and statutory sick pay will increase from £89.35 to £92.05.

Fit for work assessments – In December 2017 the government announced that its Fit for Work scheme (which was intended to provide free occupational health assessments for employees) would be scrapped from 31st March 2018.  The uptake in the service has been much lower than was envisaged when the scheme launched in 2015.

Shared parental pay – The EAT is likely to provide clarification as to whether it is discriminatory to pay shared parental leave to men at a lower rate than the maternity pay it offers to mothers.   Conflicting case law makes the position unclear at present.

Employment Status  – Further to recent cases involving Pimlico and on the so called ‘gig economy’, and in particular the decisions in each that their apparent self-employed contractors were in fact ‘workers’, appeals are due to be heard in 2018.  The Pimlico case is due to be heard in the Supreme Court in February, and the judgement shortly after will hopefully provide a definitive position.  The Uber case will be heard by the Court of Appeal at some point in 2018.

Michael Shutt

Solicitor, Employment at Berry Smith Lawyers

Please contact us if you would like more information about the issues raised in this article or any other aspect of employment law at 029 2034 5511 or employment@berrysmith.com