Employment Law Update – June 2019

Payslip Changes

From 6 April 2019, two significant changes were made to the Employment Rights Act 1996 affecting information that must be provided by employers on payslips.  The changes are as follows:-

1. Employers must include the total number of hours worked where the pay varies according to the hours worked. This would affect employees working under variable hours or zero hours contracts.
2. Payslips must be given to “workers” and not just employees. This means a payslip must be provided to self-employed individuals who have the status of “workers” who are not in business on their own account.

Guidance has been issued by the Government in relation to these changes and this can be found at https://www.gov.uk/government/publications/payslip-policy-a-guide-to-the-2019-legislation.

Taxation of IR35

The “off payroll” rules relating to IR35 that apply in the public sector will apply to private companies from April 2020.  The aim is to reduce tax avoidance by individuals working through personal service companies.  Please follow this link for our detailed review of this legislation.  [LINK]

Employment Tribunal Compensation Limits

The cap on a week’s pay for calculating statutory redundancy payments and the basic award for unfair dismissal has increased from £508 to £525 per week.

The maximum sum that can be awarded for the compensatory award has increased to £86,444.  With the maximum basic award now £15,750 (based on 20 years’ service over the age of 41), for the first time, an employment tribunal could award over £100,000 in an ordinary unfair dismissal claim.  Don’t worry, unfair dismissal compensatory awards are also capped at a year’s salary.

Misuse of Confidentiality Clauses

Employers (and their lawyers) now need to be careful as to how confidentiality and non-disclosure clauses are used, in particular, in cases of harassment.  Such clauses should not be used to prevent disclosures to the Police. In light of the Harvey Weinstein case and other highly publicised cases, the Government is consulting on measures to prevent the abuse of non-disclosure agreement. Solicitors need to be alive to the professional risks of drafting clauses that prevent non-disclosure of matters that total criminal wrongdoing.