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Global employment briefing: United Kingdom, June 2018

  • United Kingdom
  • Employment law

12-06-2018

This update summarises recent British employment law developments for global employers:

The first gender pay gap reporting deadline has now expired

A new British law requires larger employers to publish annually their gender pay and bonus gaps, showing the difference between the average hourly pay and bonus pay of men and women. The government hopes this will encourage employers to identify, and where possible address, any pay inequalities and barriers to career progression affecting women in their organisation.

Amidst much media interest, April saw the first deadline for organisations to publish their gender pay gap data. It was a bruising time for some brands who were named and shamed for unfavourable pay gaps. This first round of reporting showed pay gaps typically arising from an underrepresentation of women in senior positions as well as in some better paid jobs, such as IT and engineering.

Employers reporting gender pay disparities risk reputational damage if they do not explain the reasons for pay gaps and what they are doing to tackle them. Those failing to report are also expected to face limited enforcement action.

Employers who report pay gaps also need to be ready to answer pay and bonus questions from female workers and, possibly, equal pay claims from those unhappy with the answers. Some employers are also changing how they attract, develop and retain a diversity of talent. This reflects growing pressure on employers to remove barriers to workplace progression for ethnic minorities, as well as women, and is also a response to skills shortages in some sectors.

Meanwhile, allegations of sexual harassment are a live issue in the UK, as well as globally. The British equality enforcement body (EHRC) has called for legal change in the workplace, suggesting that the use of confidentiality clauses be restricted and calling for a new mandatory employer duty to take reasonable steps to protect workers from harassment and victimisation. It is currently unclear how the government will respond to the EHRC proposals. Employers should review their sexual harassment policies and how they are implemented in practice, their training and reporting mechanisms as well as the use of confidentiality agreements and settlement agreements.

The UK’s exit from the EU

The countdown to Brexit continues with a transition agreement agreed in principal whereby the UK remains closely tied to the EU until end December 2020. In employment law terms, the status quo is, broadly, expected to continue immediately after Brexit, although there are details which remain uncertain pending parliamentary agreement of key withdrawal legislation. Employers remain concerned over future immigration controls which are still far from clear. Visit our Brexit hub for our latest news and guidance for employers.

Regulating new employment models and the gig economy

Tasked with considering how employment law and practices need updating to keep pace with modern business models, the government-appointed Taylor Review published its wide-ranging recommendations last year. This year, the government’s response has been to publish four new consultations on aspects of the Review’s recommendations relating to enforcing employment rights, protecting agency workers, defining employment status and increasing transparency.

Given the government’s minority in parliament, major and immediate change is not expected and the outcome of this consultation exercise is promised for later this year. Even so, pressure through case law is mounting on employers with large self-employed workforces, given the recent Uber and other judgments as well as other upcoming worker status appeals. Such employers should review all such engagements to assess potential financial, legal and reputational risks in the event of their status being misclassified. In addition, the government is extending the right to itemised pay statements to all workers from April 2019, requiring employers to specify the hours being paid for on the payslips of time-paid workers. Employers will need to prepare for this change and apprise their payroll departments and providers.

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