Employment Law Update Autumn 2015

Transcription

1 Employment Law Update Autumn 2015 Contents: Recent Developments Minimum wage/national living wage Travel time/working time Annual slavery statement Pending legislation Penalties increase for illegal working GSC Solicitors LLP Ely Place London EC1N 6TD DX 462 London/Chancery Lane T: +44 (0) E : info@gscsolicitors.com W :

2 RECENT DEVELOPMENTS National Minimum Wage EMPLOYMENT LAW UPDATE AUTUMN 2015 The National Minimum Wage provides a legally binding minimum hourly rate of pay for most workers over compulsory school age. The rates are reviewed annually and usually increase on the 1 October of each year. The rates due from 1 October 2015 are shown below: Age Group of Worker Hourly Rate From 1 October 2015 Aged 21 and over 6.70 Aged Aged Apprentices under 19, or over 19 and in the first year of the apprenticeship 3.30 The National Living Wage A compulsory National Living Wage is due to be introduced in April 2016 for all working people aged 25 and over and will be set at 7.20 per hour. It is has been suggested that over 2.5 million workers will receive a pay rise following the introduction of the National Living Wage; however, there have been some conflicting opinions as to how the National Living Wage should be calculated and what effect it will have. The Government s calculation is based upon average earnings throughout the United Kingdom. The Government has tasked the Low Pay Commission to recommend the rate of the National Living Wage going forward. The Government s target is for the National Living Wage to reach 60% of median earnings by 2020, which at current levels of earnings, would be 9 per hour. The Living Wage Foundation argues that the Living wage should be calculated in accordance with the cost of living rather than the UK average earnings. This would mean a higher rate in London to reflect the higher cost of living. The Living Wage Foundation currently recommends a London Living Wage of 9.15 which is higher than the Government s target national rate for The decision to use a flat rate national wage and exclude those under 25, together with a reduction in tax credits for low earners, leaves many wondering if this is merely a rebranding of the minimum wage rather than a genuine attempt to help Britain s lowest paid workers who struggle to meet the basic costs of living. Mobile Workers Travel Time is Working Time The European Court of Justice (ECJ) has determined that time spent by peripatetic workers (i.e. those who do not have a fixed or habitual place of work) on travelling each day between their homes and their first and last appointments is working time

3 under the Working Time Directive. This has implications for pay, maximum hours worked and rest breaks. Federacion de Servicios v. Tyco Integrated Security SL 2015 Facts Tyco is in the business of security system installation and maintenance employing around 75 technicians. Technicians are each assigned to a particular province or area of Spain. In 2011 the company closed their provincial offices and assigned all their employees to their central office in Madrid. Each technician uses a company vehicle to travel from their homes to customer premises where they carry out the installation or maintenance and then to return home at the end of the day. They receive details of their assignments for the following day from the company via a mobile phone application. The company does not regard the first and last journey of the day as working time. They therefore calculate the working day as starting from the time the technician arrives at their first assignment and ending when they leave their last assignment. Before the provincial offices were closed, Tyco calculated working time as starting from when a technician arrived at the provincial office to pick up the vehicle and task list and finishing when they returned from the last appointment. The technicians brought a claim through their union in the Spanish Court that their travel time from home to and from first and last assignments should count as working time and the Spanish Court referred the question to the European Court of Justice for a determination. Decision The ECJ held that the definition of working time had been satisfied i.e. during the travel time the technicians were, at the employers disposal, at work and carrying out their duties or activities. The ECJ placed particular relevance on the fact that the company had closed their provincial offices and that previously, the travel time to and from first and last assignments had been considered as working time. The nature of these journeys had not changed, only the departure point i.e. from the technicians homes rather than the provincial office. As this is an ECJ decision, it should apply to UK law. This decision is good news for mobile workers with no fixed workplace and particularly those who are paid on an hourly basis and/or under a zero hours contract. They should now be paid for travel time to and from their first and last appointment and for any travel time between appointments during their working day. There are clearly implications for employers (and in some care worker cases, their local authority clients) who will have to bear the costs. Any employers who are thinking of changing from office space businesses to mobile ones should bear this in mind.

4 Annual Slavery Statement Modern Slavery Act 2015 From October commercial organisations with a turnover exceeding 36 million which carry on business in the UK will be required to produce an annual slavery and human trafficking statement. The requirement applies regardless of where the organisation is incorporated or based. The 36 million turnover is based on the total turnover of the organisation (not simply the UK turnover) and includes the turnover of any relevant subsidiary. The requirement will particularly impact on high profile companies whose goods or products are sourced or manufactured in Asia and Africa via an international supply chain. The slavery and human trafficking statement The statement should set out the steps the organisation has taken during the last financial year to ensure that slavery and human trafficking is not taking place either in its own business or in its supply chain or if no such steps were taken, that fact. The statement is to be provided for each financial year and should be approved by the Board of Directors (or equivalent) and signed by a director (or equivalent). There are transitional provisions to delay publication if the financial year ends shortly after the commencement date. If the organisation operates a website, the statement should be published on the website with a prominent link to the relevant page place on the homepage. If the organisation does not operate a website then it must provide a copy of the slavery and human trafficking statement to anyone who makes a written request for one within 30 days of receipt. Contents of the slavery and human trafficking statement The Modern Slavery Act 2015 sets out a non-exhaustive list of matters that could be included in a typical slavery statement. These matters generally fall into two separate areas: a) Internal policies and training The first will be for organisations to set up internal policies regarding slavery and human trafficking. Other than simply setting out the organisation s position, it should also identify the areas of business where there is a high risk of using or selling goods or services which are the product of slavery and human trafficking. The policy should set out how these risks can be mitigated through the organisations structure and policies, and the statement should also include confirmation of what training the staff have received. b) Supply line auditing The second step is to ensure that the policies have been implemented and are effective. 1 Whilst no definitive start date has yet been given the Government has indicated that the requirements will be implemented during October 2015.

5 Enforcement The Act suggests that the steps taken should be measured for effectiveness against relevant performance indicators. It is not clear what those performance indicators may be, but if organisations are relying on suppliers certificates or contractual warranties which confirm the goods or services have not been produced through the use of slavery or human trafficking, then they need to be taking steps to confirm this. This could be by way of spot checks on suppliers. Unusually for a regulatory offence, failure to comply with the obligations is not enforced by a fine or threat of a prison sentence but instead the Government can apply for an injunction requiring the organisations to disclose this information. Given the limited enforcement provisions, this suggests that the Government will rely on campaign groups to highlight which organisations are not doing enough in the hope that the bad publicity and market pressures will force organisations to ensure that standards are sufficiently rigorous. It is the high profile chains which will be most susceptible to this approach, but the Government may look to take court action against smaller organisations who haven t complied with the requirements over the statement in order to raise awareness of these provisions. The new rule follows the model adapted in California and whilst well intentioned, seems to be relying on enforcement by naming and shaming rather than fines or a prison sentence. Any company which uses international supply chains should consider whether it is required to produce an annual slavery statement. PENDING LEGISLATION New Penalties to prevent illegal working Immigration Bill All employers are currently required to carry out right to work checks on all new workers (regardless of nationality) to verify they have the right to work in the UK. The Home Office has issued guidance on the documents which employers should request. The maximum civil penalty for employing workers illegally is 20,000 (per worker). There are, however, mitigating factors which can reduce or avoid the penalty such as reporting suspected illegality, cooperating with any Home Office investigation and satisfying the Home Office that effective document checking practices were in place. It is also a criminal offence to knowingly employ an illegal worker. However, there are few prosecutions given the difficulty of proving the offence and instead the Government has relied on civil penalties for enforcement purposes. The Immigration Bill includes a new criminal offence for employing illegal workers and increases the penalty for a conviction. 2 No implementation date yet

6 Key proposals under the Bill include: An extension of the criminal offence of knowingly employing an illegal migrant to include circumstances where an employer has reasonable cause to believe that a person is an illegal worker; An increase in the penalty for that offence from two years to five years imprisonment; Creation of a new offence of illegal working which would enable the earnings of illegal workers to be seized under the Proceeds of Crime Act 2002; A requirement that public authorities ensure that public sector workers in customer facing roles speak fluent English; Power to close businesses that continue to flout the law through the use of illegal labour and ensure that any licences granted to businesses e.g. for the sale of alcohol, are only held by those who comply with immigration laws. The new proposals are aimed at rogue employers who exploit illegal migrants for their own gains but are also aimed at making it harder for migrants to live and work illegally in the UK. Unfortunately, honest employers can find themselves guilty by mistake and the penalties are high. The new criminal penalty will operate alongside and reinforce the existing system of civil penalties for employing illegal workers (whether employed or self employed). This update was produced by GSC s employment team. For further information or advice, please contact: Tessa Fry Partner and head of employment tfry@gscsolicitors.com GSC Solicitors LLP Ely Place London EC1N 6TD Tel: Disclaimer This update is intended to provide readers with information on recent legal developments. It should not be construed as legal advice or guidance on a particular matter. GSC Solicitors LLP