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UK HR e-briefing: Pre-election reforms to employment law come into force

  • United Kingdom
  • Employment law - HR E-Brief


Tomorrow will bring the Queen’s Speech and the keenly-awaited clarification of where the new government's priorities will lie in the next Parliament. However, a number of noteworthy reforms, passed pre-Election, came into force today and should not slip under the radar for employers.

The Small Business, Enterprise and Employment Act (SBEEA) includes various employment-related provisions relating, for example, to zero hours contracts; public sector exit payments; fines for non-payment of Tribunal awards or of the national minimum wage and gender pay audits (see briefing 25 March 15, Parliament approves employment law changes). It had been assumed that many of these, although approved by Parliament in principle back in March, would await further consultation by a new government prior to implementation. As proponents of the Act in coalition, however, the Conservative government has pressed ahead with bringing certain aspects of SBEEA into force sooner.

From today, therefore..

Exclusivity terms within zero hours contracts are outlawed

For the first time, zero-hours contracts are given legal definition, albeit a narrow one. For the purposes of SBEEA, a zero hours contract can be summarised as one under which a worker offers to undertake work on behalf of the employer on request, there being no guarantee of work.

Any provision in such a contract which purports to prevent the worker from undertaking work for a different employer or to require the employer’s consent to do so, is now unenforceable.

Despite the fact that this change has been proceeded with straight away, this development is unlikely to be the last we hear on zero-hours contracts. Powers to make further provision in this context have also been brought into force today and will be considered in due course, no doubt in the context of wider debate over how to prevent worker-exploitation and avoidance of the exclusivity ban, whilst preserving flexibility in employment.

Fines for non-payment of NMW

SBEEA introduces new penalties for employers who fail to pay tribunal awards or settlement sums.

The National Minimum Wage Act 1998 is amended so that the maximum £20,000 penalty for non-payment applies in respect of each worker who is underpaid nmw. Previously, the maximum penalty applied per under-payment notice to the employer, so this rise represents a potentially large increase.

Greater whistleblowing protection in the NHS

SBEE contains a number of further changes to whistleblowing protection. Whilst the possibility of imposing reporting allegations upon regulatory bodies was passing through Parliament, new provisions specifically aimed at the healthcare sector were introduced. These particular sections of SBEEA, enabling the government to issue regulations, come into force today, and once those regulations are in place, will prevent discrimination against NHS job applicants, where they have previously made a protected disclosure.

The remaining changes in the context of whistleblowing under SBEEA will await implementation in due course.

The meaning of small and micro businesses

Increasingly in employment legislation, small businesses are excluded from some of the more bureaucratic elements. Consultation obligations under TUPE is just one example. SBEEA now paves the way to new regulation, defining such businesses more clearly.

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