In this end of year edition of employment matters, we’ll be gazing into the crystal ball to see what employment law issues might lie ahead for employers over the next 12 months.
Brexit uncertainty to continue
2019 is set to be another testing year for employers, with Brexit understandably taking centre stage. Whilst it’s unlikely to result in immediate changes to employment law, other than immigration rights of EU nationals, there is still considerable uncertainty around what type of Brexit we will get. Employers should therefore be planning their Brexit strategy now to address the challenges and post Brexit future that lies ahead. Restructuring, outsourcing or relocating operations outside of the UK may be part of that agenda but these must be properly planned and implemented to limit the risk of employment claims and the impact on productivity.
The Battle for talent to intensify
High employment levels and a rise in vacancies has made recruiting talent a real challenge for UK employers. That battle is likely to intensify over the next 12 months as Brexit uncertainty tightens its grip. With millennials now seeking different career goals than previous generations, employers will also have to get creative with what they can offer to win that battle.
Wage costs to increase
The battle for talent is also likely to fuel salary increases as lateral hires demand higher pay to jump ship and existing staff seek pay increases to stay.
Lower paid workers will also receive an above inflation pay rise from 1 April 2019 following the Government’s announcement in the recent budget that the national living wage will increase by 4.9 per cent from £7.83 to £8.21 p/h. Retail, leisure and hospitality employers are likely to be the hardest hit and some may not be able to cushion the blow if December sales don’t meet expectations.
Social Care sector employers have also been hit hard by the rise in national living wage and the recent sleep-in shift saga. The industry breathed a huge sigh of relief back in July when the Court of Appeal decided that genuine sleep-in shifts which satisfied certain conditions were not working time for national minimum wage purposes. However, Unison has sought permission to appeal and with approximately £400 million of national minimum wage underpayments at stake, all eyes will be watching the outcome. HMRC had previously set up the Social Care Sector Compliance scheme for providers to opt into to protect themselves from the severe sanctions which apply for underpaying national minimum wage for sleep-in shifts. Whilst the scheme might now seem irrelevant following the Court of Appeal’s decision, if Unison’s appeal succeeds, it will save social care providers from the sanctions that would otherwise apply. Social care providers might therefore consider it wise to err on the side of caution and opt-in before the 31 December 2018 deadline.
A rise in data privacy claims?
Employers should now have settled into the new GDPR regime having updated their privacy notices, contracts and policies and procedures. The influx of Data Subject Access Requests might also soon start to tail off and Data Breach response plans will almost certainly have been tested and refined.
However, a new issue could arise in the form of civil class actions for data privacy breaches. In 2019, Morrisons ’ appeal against the decision that it was liable for an employee’s unlawful disclosure of 100,000 workers’ personal details will be heard by the Supreme Court. The real concern in this case is that the employee’s act was done intentionally with a view to inflicting harm on Morrisons. If unsuccessful, Morrisons will be liable to pay compensation to each affected worker and it could open the floodgates for claims against other employers for similar data breaches caused by their staff.
Additional worker rights?
In the spare time the Government has to discuss matters other than Brexit, it has hinted at radical changes to worker rights. This could see employers facing increased costs from a new national minimum wage premium for casual workers and regulatory enforcement of holiday pay rights amongst other proposed changes
And finally…the return of Employment Tribunal fees?
On 6 October 2018, the Ministry of Justice indicated plans for the reintroduction of employment tribunal fees were in development. Employment Tribunal fees were abolished in 2017 on the grounds they prevented access to justice and were indirectly discriminatory towards women. A new fee regime will be welcome news for employers as it should curb the significant increase in Employment Tribunal claims since their abolition. A word of warning though, when fees were introduced back in 2013, it caused a huge spike in claims from those keen to get their claims in before they had to pay.
If you have any concerns about how these issues might impact your business, please contact Charlie Barnes.