Update: Pay transparency, zero-hours, financial penalties and more…

The Small Business, Enterprise and Employment Bill received Royal Assent on 26 March 2015. It is known as the Small Business, Enterprise and Employment Act 2015 (the “Act”), and Part 11 of the Act sets out the changes to employment law.

We have previously discussed this piece of legislation in the context of its impact on pay transparency and the requirement for “regulations” to be published under Section 78 of the Equality Act 2010 to force employers of more than 250 people to publish information showing whether there are differences in the pay of male and female staff. By way of update, and in accordance with Section 147 of the Act, such regulations (specifying precisely what information must be published by employers) must now be made as soon as possible and by no later than 12 months after the passing of the Act.

In addition, Section 151 came into force on the date the Act was passed. This introduced powers for the Secretary of State to limit the number of successful applications that a claimant or respondent can make in any case for the postponement of an employment tribunal hearing, with judges able to grant further postponements only in exceptional circumstances.

Future Changes

The Act may have broader implications within the realms of employment law including, but not limited to, the following:

• Section 148 – Changes to whistleblowing procedures for prescribed persons by providing powers for the Secretary of State to require certain persons (e.g. HMRC, FCA etc.) to report annually on the whistleblowing disclosures they receive, whilst maintaining the confidentiality obligations of those prescribed persons.

• Section 150 – The introduction of a financial penalty against an employer that fails to pay an employment tribunal award promptly and in full (following receipt of a warning notice and a penalty notice), whether or not the claimant chooses to enforce this. The penalty will be 50% of the unpaid relevant sum, subject to a minimum of £100 and a maximum of £5,000, and is to be paid into the Consolidated Fund, being the government’s general bank account in the Bank of England. The penalty will be subject to a reduction of 50% if, within 14 days of the penalty notice, the employer pays both the unpaid relevant sum and the penalty.

• Section 152 – An increase in the maximum penalty that can be imposed on an employer for the underpayment of the National Minimum Wage by calculating it on a per worker basis.

• Section 153 – The unenforceability of “exclusivity clauses” in zero-hours contracts, which stop individuals from working for another employer, to ensure that no-one shall be tied into a zero-hours contract without any guarantee of paid work.

• Section 154 – The introduction of regulations to claw-back settlement sums from certain public sector employees who return to work in the public sector within 12 months.

These provisions will need to be separately brought into force and therefore will depend largely upon the policies of the Government after the upcoming election. As ever, we will keep you updated.

If you would like further information on this topic or any other Employment or Immigration issue please contact the Edwin Coe Employment and Immigration Team.

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