Pre-election Reforms to Employment Law

Pre-election Reforms to Employment Law Come into Force

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 pre-election reforms to Employment Law come into Force today and should not slip under the radar for employers.

The Small Business, Enterprise and Employment Act (SBEEA) includes various 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. 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. However, the new Conservative government have 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 a contract of employment under which:

  • the worker agrees to do or perform work or services when the employer makes work or services available to the worker, and
  • there is no certainty that any such work or services will be made available to the worker.

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.

Further provisions will be considered in due course over the prevention of worker-exploitation and avoidance of the exclusivity ban.

Fines For Non-payment Of National Minimum Wage

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. Previously, the maximum penalty applied per under-payment notice to the employer, so this rise represents a potentially large increase.

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.

Currently a ‘small business’ is defined as one with a headcount of fewer than 50 and a specified threshold for turnover and balance sheet and a ‘micro business’ is defined as one with a headcount of fewer than 10 and a specified threshold for turnover and balance sheet.

Pre-election Reforms to Employment Law Come into Force

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