Employment Law Developments in 2007

14 December 2006

To bring businesses up to date and to highlight some policies and procedures that might need a review, here is a brief overview of some of the key changes planned for 2007
Family friendly changes

Recent years have seen the implementation of a number of domestic employment measures aimed at enhancing flexibility and the work life balance in the UK economy. Further changes are to come into force under the Work and Families Act 2006.

The new provisions will apply to women whose expected week of childbirth falls on or after 1 April 2007 and will be mirrored for adoption cases. These changes include extending the period for paid maternity and adoption leave to 39 weeks, currently 26 weeks. The removal of the service qualifying period for additional maternity leave means that all pregnant employees will qualify for 12 months maternity leave, regardless of their length of service. There will also be the introduction of “keeping in touch” days; where both parties agree, those on statutory leave can return to work for up to 10 days during their leave without losing their right to statutory payments. Employers will also be entitled to make “reasonable contact” with employees while they are on statutory leave.

From April 2007, there will be a new right for those who ‘care’ for adults (that is, those over the age of 18) to request flexible working. A ‘carer’ is defined as an employee who is married to, or the partner or civil partner of the employee; is a "near relative" (parents, parent in law, adult child, siblings, uncles, aunts or grandparents and step relatives) of the employee; or falls into neither category, but lives at the same address as the employee.

Beyond 2007, further changes are planned. It is anticipated that by 2010, paid maternity and adoption leave will be extended to 12 months. There will also be the introduction of additional paternity leave for fathers for up to six months enabling them to benefit from leave and statutory pay if the mother returns to work after six months, but before the end of her maternity leave period. It is also planned to increase a worker’s minimum right to paid annual leave under the Working Time Regulations 1998 to four weeks plus bank holidays (currently four weeks inclusive of bank holidays).

Information and Consultation of Employees Regulations

The regulations, which came into force in April 2005, set out minimum rights for employees to be informed and consulted by their employers from the planning stage in respect of workplace issues; for example the business economic situation, employment prospects, redundancies and proposed company purchases/sales. Currently, the regulations apply to businesses with 150 or more employees. This will be extended in April 2007 to businesses with 100 or more employees and again in April 2008 to businesses with 50 or more employees.
The regulations contain complicated recognition arrangements, but generally (and subject to existing recognition arrangements); consultation and information must take place with employees if at least 10% of the workforce, subject to a minimum of 15 employees requests it. In response to the regulations, recent years have seen the growth of staff associations, works councils and employee representative groups. This growth will continue with the extension of businesses covered by the regulations, with effect from 2007/2008.

Equality Act

From April 2007, the Equality Act 2006 will impose new duties upon public sector bodies to draw up a scheme that identifies gender equality goals; develop, publish and regularly review a policy on equal pay arrangements, assess the impact of new legislation and changes to policies, employment and service delivery. This will inevitably lead to the closer scrutiny by public sector bodies of the internal workplace cultures, practices and procedures of the private sector organisations that tender and conduct business with them.
The Commission for Equality and Human Rights is introduced in October 2007. This body will merge the Commission for Racial Equality, the Equal Opportunities Commission and the Disability Rights Commission. It is anticipated that the single equality body will have an increasing influence in the workplace; it will also take responsibility for the new laws outlawing discrimination on grounds of age, religion or belief and sexual orientation and for promoting human rights.

Ban on Smoking in the Workplace

The Health Act 2006 comes into force on 1 July 2007. This will lead to a ban on smoking in enclosed public places including offices, factories, pubs and bars and, therefore, most workplaces. It will not, however, cover outdoors or private homes. Businesses that do not enforce the ban will face fines of up to £2,500.

Minimum wage

Should economic conditions permit, the National Minimum Wage (NMW) may increase again in October 2007. Currently, the adult rate (22 and over) is £5.35, the development rate (18 to 21) is £4.45 and the young workers rate (16 and 17) is £3.30 per hour. The Low Pay Commission will review the impact of the NMW upon the economy and will prepare a report for the Government in 2007, which will make any appropriate recommendations for changes to the rates. It is noteworthy that the TUC is lobbying for an increase in the adult rate to £6.00 per hour by October 2008 with the abolition of the development rate, thus reducing the qualifying age for the adult rate to 18.

With important legislative changes planned, it is anticipated that 2007 will be another busy year of developments in employment law. We will also see further case law development and guidance in a number of recently implemented areas, for example age discrimination and the practical impact of the minimum statutory procedures for dealing with internal discipline and grievance issues.

For more information please contact Andrew Masters, Partner & Head of Employment.
 

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