The biggest HR news stories of 2016
From Brexit to an indecent workplace proposal, the news you couldn’t afford to miss in the year gone by
It’s been a remarkable year for news-watchers – and many of the most impactful and intriguing occurrences have had a particular resonance for HR professionals. Whether it’s macro-events such as Brexit and the apprenticeship levy, landmark case law or some unusual goings-on at employment tribunals, People Management rounds-up the biggest stories of 2016.
Where else to begin than the UK’s unexpected decision to leave the EU? Whichever way you voted, the 23 June result has led to a prolonged period of uncertainty for most businesses that will extend well into 2017.
Brexit, when it happens, will have profound implications for employees, business leaders and the HR professionals who must get to grips with it. For starters, UK employment law could be fundamentally redefined when EU legislation is formally extricated, with employers urging the government to clarify exactly which employment rights will be protected in the event of a Brexit and which might be removed from the statute books – elements of Tupe legislation and, potentially, the working time directive have been named here.
Brexit Britain’s access to EU markets is another crucial unresolved issue. While prime minister Theresa May has said the status of EU nationals is tied to that of Brits living in Europe, the future level of access to the single market could have significant ramifications for workforce planning across a huge range of sectors. “There is a very strong likelihood that the recruitment and retention challenges of employers will increase when EU migration restrictions are introduced, which will affect low-skilled employers especially,” said Gerwyn Davies, public policy adviser at the CIPD.
The apprenticeship levy
While the introduction of the national living wage was the biggest new legislation of 2016 – and caused a huge row over cuts to benefits – almost all HR professionals will spend the first part of next year getting to grips with the introduction of the apprenticeship levy in April 2017. An effort by the government to raise £3bn a year, it aims to create three million more ‘high quality’ apprenticeships by 2020.
Under the levy, employers with a wage bill of more than £3m will pay a 0.5 per cent levy to a digital savings pot. In return, they can access the money – plus a 10 per cent top-up from the government – to fund apprenticeships each year. If the funds are not used within 18 months, the Treasury reclaims them, meaning businesses without sizeable existing apprenticeship schemes will need to rethink their strategies or write off the cash.
The announcement of the levy late in 2015, and the release of further details this year, divided employers, with many raising concerns about the mechanics of the programme. The CBI was concerned in particular that the funding only pays for off-the-job elements of apprenticeships. Others worried that the target of three million apprenticeship starters by 2020 would trigger a ‘race to the bottom’ in terms of quality.
CIPD research in August suggests that less than 10 per cent of organisations that expect to use levy funding will deploy it for this purpose. In fact, almost a third (29 per cent) of companies that have calculated how much they will need to pay are planning to adapt existing training courses so they can become accredited apprenticeship programmes. Expect this to be one of the biggest stories of 2017.
It was an autumn of discontent for benefits providers, as chancellor Philip Hammond clamped down on salary sacrifice schemes in his first (and last) Autumn Statement. From April 2017, the government will abolish tax exemptions on most salary sacrifice benefit schemes, in a move that will fundamentally redefine the nature of employee benefits.
Describing the difference between the tax paid on a cash salary and benefits-in-kind as “unfair”, Hammond said: “Employees who use these schemes will pay the same taxes as everyone else.”
While salary sacrifice is not explicitly being banned, the move is a huge shake-up for benefits providers, with employers being warned they will face difficult choices over which benefits to continue if the majority become uneconomic or unattractive for their staff.
Pension schemes, childcare, cycle-to-work programmes and ultra-low emission vehicles with CO2 emissions of up to 75g/km will be exempt from the changes, but the provision of gym memberships, mobile phones and white goods, among others, will become highly unattractive.
Company cars are also likely to be severely affected. Matt Dyer, managing director of LeasePlan, one of the largest fleet providers, said the changes would “lead to unwelcome complexity for very little gain”. But the government shows little sign of changing course.
A five-year legal struggle came to its conclusion when the Court of Appeal ruled that holiday pay must include commission as it finally resolved the case of Lock v British Gas. The infamous and lengthy battle, which moved from an employment tribunal to the Court of Justice of the European Union, originated in a dispute involving Lock, a salesman for British Gas who took his employer to tribunal over a claim that the firm owed him additional holiday pay on the basis that his pay failed to reflect the commission he would have earned had he been working.
Though there is still the potential for an appeal, the case seems likely to bring significant implications for a range of sectors, from retail to media, transport and finance. Any employee with normal working hours, whose pay does not vary according to the amount of work done – but who receives individual results-based commission as part of their normal remuneration – will potentially be affected. Employers will have to carefully consider what they believe constitutes ‘normal remuneration’ for staff, as well as the period it should be measured across, said legal experts.
“It may be better in financial and HR terms to be proactive and to seek agreement with workers, or to wait for the issue to be raised by or on behalf of those workers,” said Andrew Granger, partner in the employment, pensions and mobility group at Taylor Wessing.
The indecent proposal
One of the more unusual Employment Appeal Tribunal cases of the year arrived in August, when a solicitor and his employer were ordered to pay more than £20,000 in damages to a female employee, after he proposed marriage during a job interview and subjected her to a prolonged campaign of sexual harassment.
Asghar Ali was described by a judge as treating Sunna Majid as “a woman evidently to be present in the office for his pleasure and gratification, rather than to work”.
Majid accepted the job despite the proposal, assuming it to be a joke. But she was then bombarded with out-of-hours messages and inappropriate comments, including a suggestion from Ali that he would have a bed installed in his office for them to share. After Majid said she had a boyfriend, she was made redundant.
Landmark parental cases
It was a contentious year for the implementation of shared parental leave, with a number of cases demonstrating the teething troubles businesses have experienced with the legislation, and the reluctance of some employers to embrace it fully.
In October, a male employee at National Rail was awarded almost £30,000 after being offered only statutory pay by his employer – while working mothers were offered full pay.
Both David Snell and his wife worked for National Rail and hoped to take advantage of shared parental leave, but when he applied he was told he was only entitled to statutory parental pay of £139.58 per week, while his wife would receive full pay for 26 weeks. After raising a grievance, Snell was awarded £28,321 and Network Rail admitted its policy was discriminatory.
In December, a CIPD survey found that only 5 per cent of new fathers were making use of shared parental leave and four-fifths of employers had never received a request. Employers risk losing talented individuals, said the report, if they do not take the topic seriously.
Beauty therapist Emma Holt also won at an employment tribunal after she was made redundant following a row over childcare arrangements and her inability to work weekends because she needed to look after her son. The tribunal ruled she was unfairly dismissed and suffered sex discrimination, awarding her £18,000.
Story via – http://www2.cipd.co.uk/pm/peoplemanagement/b/weblog/archive/2016/12/22/the-biggest-hr-stories-of-2016.aspx