Many changes came into force in April – we have summarised the key recent changes for you below, as well as including a reminder about the introduction of shared parental leave.

Shared Parental Leave

Shared parental leave is available in respect of children who were born or placed for adoption on or after 5 April 2015.

Eligible employees are entitled to a maximum of 52 weeks’ leave and 39 weeks’ statutory pay upon the birth or adoption of a child, which can be shared between the parents. For further detail, see   http://www.scullytwiss.com/winter-2014-employment-law-update/

Parental Leave

From 5 April 2015, those entitled to parental leave are able to take this leave up until the child’s 18th birthday (rather than the child’s 5th birthday as was the case previously).

Adoption

With effect from 5 April 2015, adopters’ rights now largely mirror those of birth parents:

• Adopters are no longer subject to the requirement for 26 weeks’ service before they become entitled to adoption leave.
• Statutory adoption pay has been brought into line with statutory maternity pay, by the introduction of a six-week period at 90% of earnings.
• Adopters are entitled to take time off to attend appointments to meet the child they intend to adopt.
• Adopters are entitled to up to a maximum of six and a half hours for each appointment.
• Employees and eligible agency workers are able to bring a tribunal claim if their employer, temporary work agency or hirer refuses the time off for adoption appointments, refuses to pay them for the time off or if they are dismissed as a result of exercising the right.

Since 1 December 2014, an employee’s right to return after adoption leave mirrors an employee’s right to return after maternity leave.

Statutory Pay Increases

SMP is paid for 39 weeks of maternity leave as follows:

• For the first 6 weeks, SMP is paid at 90% of the employee’s normal weekly salary.
• For the remaining 33 weeks, SMP is paid at either the lower of 90% of the employee’s normally weekly salary, or the “Prescribed Rate”.

From 5 April 2015, the Prescribed Rate increased from £138.18 to £139.58 per week. Shared Parental Pay is also payable at £139.58 per week.

The Prescribed Rate for Statutory Paternity Leave, Statutory Adoption Leave and Maternity Allowance similarly increased to £139.58 per week.

From 6 April 2015, statutory sick pay increased from £87.55 to £88.45 per week.

Tribunal Award Limit Increases

In most unfair dismissal cases, awards comprise two separate amounts:

1. the basic award, which is calculated by reference to the employee’s length of service, age and weekly salary (subject to a statutory cap); and
2. the compensatory award, which is based on the employee’s loss of earnings as a result of the dismissal. In most cases, the compensatory award is subject to a statutory cap, although there are exceptions e.g. whistleblowing or health and safety dismissals.

From 6 April 2015, the maximum amount of a week’s pay, used to calculate the basic award and redundancy payments increased from £464 to £475.

Where the statutory cap for the compensatory award applies, the maximum compensatory award is the lower of:

1. one year’s gross salary; and
2. the limit set by the government.

The government limit increased from £76,574 to £78,335 for employment terminating on or after 6 April 2015.

Criminal Record Requests by Employers

If an employer has legitimate grounds to seek access to an individual’s criminal record the correct way to do this is to use the Disclosure and Barring Service (formerly the Criminal Records Bureau). However, some employers have been known to require a job applicant or employee to make a subject access request to obtain a copy of their criminal record. This could result in excessive disclosure as a subject access request generally requires all personal information to be disclosed and does not distinguish, for instance, between spent and unspent convictions.

This practice, known as “enforced subject access” is now unlawful. Since 10 March 2015, it is a criminal offence for an employer to require a job applicant or existing employee to obtain a copy of their criminal record by making a subject access request and supply it to the employer in connection with their recruitment or continued employment.

The Information Commissioner has published guidance (https://ico.org.uk/media/for-organisations/documents/1042608/enforced-subject-access-s56.pdf) in relation to the new law, with useful examples of when an offence will be committed.

Tax Free Childcare Scheme – Autumn 2015

The scheme is expected to be implemented in Autumn 2015 but the government has not confirmed the proposed implementation date. It will replace the existing childcare vouchers scheme.

The government plans to introduce a new tax-free childcare scheme under which working families will be able to claim 20% of qualifying childcare costs for children under 5 (and children with disabilities under 17). This will only apply where no family members are additional rate taxpayers.

Claims will be capped at £2,000 per child per year (originally £1,200).

Whereas the current scheme is dependent on employer participation, the new scheme will be open to all qualifying employees. However the new scheme will not involve salary sacrifice, which means that the National Insurance contribution advantages which currently apply to participating employers will no longer apply.

Significant Case Law Developments

Commission to be included in holiday pay calculations – Lock v British Gas Trading Ltd

As we reported in our Winter 2014 Newsletter http://www.scullytwiss.com/winter-2014-employment-law-update/, the European Court of Justice (ECJ) last year decided that commission determined by reference to sales achieved (as was the case for Mr Lock) must be included in holiday pay. The ECJ decided that this was necessary on the basis that if commission was not included in the calculation of holiday pay that could discourage workers from taking annual leave.

Following the ECJ’s ruling, the Lock case was remitted back to the Leicester employment tribunal to consider whether UK law could be interpreted to give effect to the decision of the ECJ.

The employment tribunal decided last month that the Working Time Regulations 1998 could be read to give effect to the ECJ ruling. The tribunal endorsed the approach taken in the case of Bear v Fulton (see our Winter 2014 Newsletter http://www.scullytwiss.com/winter-2014-employment-law-update/) which decided that the WTR should be interpreted in a manner consistent with the Working Time Directive with the result that non-guaranteed overtime was required to be included in holiday pay calculations. The tribunal concluded that there was no reason to differentiate between non-guaranteed overtime payments and commission payments.

As in the case of Bear v Fulton, the tribunal’s decision only applies in respect of the minimum 4 weeks annual leave which a worker is entitled to under EU law and not to the additional 1.6 weeks additional annual leave which a worker is entitled to under the Working Time Regulations or to any contractual annual leave.

The tribunal’s decision did not, as anticipated, address the question of the correct reference period to be used in relation to quantifying the commission element of holiday pay – the tribunal stated that this will be determined at a later stage of the litigation. Whilst the tribunal did not expressly decide this, the indication given by the tribunal appears to be that employers should calculate holiday pay by working out an average hourly rate of pay (including commission) over the 12 week reference period before the date on which the holiday is taken. This is consistent with the method used for working out a ‘week’s pay’ for an employee with no normal working hours as set out in the Employment Rights Act 1996.

Following the Government’s introduction of the Deduction from Wages (Limitation) Regulations 2014, which comes into effect on 1 July 2015 (see our Holiday Pay Update – January 2015 http://www.scullytwiss.com/holiday-pay-update/) any potential back-claims will be limited to two years.

Scully Twiss Recommendations

• Consider whether you will implement a new Shared Parental Leave policy and what level of detail you will provide in such a policy.
• Ensure that your HR team and any relevant managers are up to speed with the new Shared Parental Leave changes.
• Update any references to the statutory Prescribed Rates in your existing maternity, paternity and adoption policies.
• Update your adoption policies to reflect the new rights for single and joint adopters.
• Update your parental leave policies to reflect the change in when parents will be able to take this leave.
• Review your employment policies and procedures and recruitment process/checks to ensure that they comply with the Information Commissioner’s Guidance in relation to enforced access requests.
• As previously suggested in our Winter 2014 Newsletter, review your position on commission payments and how you calculate holiday pay if you have not already done so.