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6th February, 2017

Key Legislative Changes and Case Law in 2017

The last 12 months has seen significant developments in the field of employment law and indications suggest that 2017 will be no different. This article will consider some of the more prominent changes that have already been announced and how these are likely to affect employees and businesses over the coming year.

Tax Free Childcare

In early 2017 a new tax free childcare scheme is due to be introduced by the government to replace the existing childcare voucher system. Under the new scheme working families will be able to claim back 20% of qualifying childcare costs for children up to age 5 (or age 17 for children with disabilities). In order to be eligible for this scheme, both parents must earn at least £50 per week but neither can be an additional rate tax payer. There is also a cap of up to £2,000 per child per year on the amount that can be reclaimed.  No introduction date has been confirmed for the new tax free childcare scheme but it is expected to be within the first few months of 2017.

Trade Union Act

Five sets of regulations are due to come into force on 1 March 2017 under the Trade Union Act 2016 which establish additional strike balloting requirements for those working in what are deemed to be ‘important public services’.  For the purposes of these regulations, important public services will include hospital services, teachers, firefighters, national rail services and border control. Following the implementation of these regulations, for a strike in these services to be lawful, it is required that at least 50% of those eligible to vote participate in the ballot as well as for at least 40% of those participating to support the ballot. This is likely to make the holding of strikes in these sectors far more difficult than in previous years where it was only necessary to gain a simple majority amongst those voting for a strike to be lawful.

National Minimum Wage

In November 2016 the government announced the new national minimum wage and national living wage rates to take effect from 1 April 2017. National living wage will rise from £7.20 per hour to £7.50 per hour whilst the national minimum wage will increase from £6.95 per hour to £7.05 per hour. There will also be slight increases in wages to younger workers with the minimum wage for 18-20 year olds rising from £5.55 to £5.60 per hour and 16-17 year olds from £4.00 to £4.05 per hour whilst apprentices will need to be paid £3.50 per hour (up from £3.40).

Apprenticeship Levy

Employers will be liable to pay the apprenticeship levy through PAYE alongside income tax and National Insurance Contributions from 6 April 2017. The rate of the levy will be 0.5% of an employer’s total wage bill but importantly each employer will have an annual allowance of £15,000. In effect, this means that only employers whose total wage bill is over £3 million per year will liable to contribute towards the levy which, according to the government, means that less than 2% of employers will be required to pay.  If two or more companies or charities are connected at the beginning of a tax year they will only be entitled to one £15,000 allowance between them.

Where an employer’s pay bill for the tax year commencing on or after 2017 is expected to exceed £3 million or where their pay bill for the previous tax year actually exceeded £3 million they have a duty to notify HMRC of the amount of their liability to the levy. Employers who fail to do this or fail to make payments of the levy on time will be subject to penalties under Schedule 24 of the Finance Act 2007.

Gender Pay Gap Reporting

The gender pay gap reporting regulations are also due to come into force from 6 April 2017. These regulations will require all private and voluntary sector employers with more than 250 employees to publish information on their gender pay gap, gender bonus gap and the gender split across four established pay bands on the ‘relevant snapshot date’ (which is 5 April in each relevant year). Gender pay gap reporting must include basic pay, allowances, piecework and/or any shift premium pay. Pay during periods of leave (including sickness, holiday, maternity or other leave) will only be reported where this is fully paid, otherwise pay figures in relation to these employees will be excluded entirely. Interestingly, the regulations do not include specific provisions for their enforcement and although a “name and shame” approach has been suggested, it is still unclear how a failure to publish gender pay gap information will be dealt with.

Case Law

R (Unison) v Lord Chancellor – On 27/28 March 2017 the Supreme Court will hear an appeal by UNISON against the introduction of Tribunal fees. UNISON originally issued two judicial review challenges following the introduction of fees in July 2013, both of which were dismissed by the High Court. Their original appeal was then rejected by the Court of Appeal in August 2015 on the basis that they lacked evidence of the ‘actual affordability of the fees’ and UNISON appealed again to the Supreme Court. This has been a hugely divisive issue in employment law over recent years and it seems that, irrespective of the decision reached, questions surrounding whether these fees are justifiable and/or the effectiveness of the current remission system are likely to persist.

De Souza v Vinci Construction UK Limited – On 23 May 2017 the Court of Appeal is scheduled to hear this case which deals with whether the 10% ‘Simmons uplift’ for personal injury should apply to discrimination awards for personal injury and injury to feelings in an Employment Tribunal. In March 2015, the Employment Appeal Tribunal (“EAT”) reached the conclusion that the Simmons uplift is only intended to apply to claims in the Civil Courts and has no place in the Employment Tribunal. The EAT decided that previous claims had been wrongly decided in this respect but acknowledged that clarity will be required from the Court of Appeal in respect of the conflicting authorities.

Chesterton Global Ltd and another v Nurmohamed – The Court of Appeal will also consider whether the EAT was correct to find that a small group of the public is sufficient to satisfy the public interest test for a protected disclosure. The appeal is due to be heard on 8 June 2017 and it is hoped it will provide a decisive authority on what has been a heavily disputed aspect within a number of recent whistleblowing claims. If the Court of Appeal confirm the EAT’s decision this will simplify one of the more onerous burdens placed on potential whistleblowers and could result in more of these claims being brought to Tribunal.


This article can only provide a snapshot of the direction in which employment law is likely to progress over the next year. However, with the potential for additional changes to originate from the government, through either its Spring Budget on 8 March or the enactment of further legislation, or from precedents set by developing case law, it seems inevitable that this will not form the full picture of the next 12 months in the sector.

For a review of your policies or any further advice regarding protecting your business, please contact Helen Watson.

As produced by Helen Watson for the January – February edition of Gap Insight.

To read the January – February edition of Gap Insight in full please click here

Helen Watson

Partner & Head of Employment Law
Email: [email protected]
Tel: 01244 405565

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