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Employment law update – January 2016

Zero Hour Contracts

From 11th January 2016, protection has been introduced for zero hour contract workers under to provide that:

  • Any dismissal of a zero hour contract employee is automatically unfair (regardless of how long the employee has worked for their employer for under the zero hours contract) if the principal reason is that s/he breached a contractual clause prohibiting him/her from working for another employer; and
  • It is also unlawful to submit a zero hour worker to any detriment if they work for another employer in breach of a clause prohibiting them from doing so.

Employers who use zero hours contracts should therefore ensure that such contracts do not include any such exclusivity clauses preventing them from working for another employer and, if they do, not to dismiss or subject to a detriment any employee or worker if they do work for another employer.

Unpaid Awards and Settlements – Penalty Notices

The Government is intending to bring new “unpaid award penalties” into force from April 2016. Employer who fail to pay Employment Tribunal awards or settlements to employees will be issued with a “warning notice” and, if the monies still remain unpaid, the employer will be subject to a “penalty notice” of 50% of the outstanding amount, subject to a £100 minimum and £5,000 maximum. The money will be payable to the Secretary of State, not to the employee. The above is in addition to the financial penalty already in force, which have been payable in Employment Tribunal claims brought after April 2014 where “aggravating features” exist. In such cases, Employment Tribunal can order the employer to pay an additional 50% in compensation (subject to the same above-mentioned maximum and minimum).

More national minimum wage offenders to be named and shamed

1,004 investigations have been carried out so far into national minimum wage compliance since October 2013 and employers who have been issued with “underpayment notices” have been named and shamed. The Government is currently considering the next batch of cases and expects to name more employers shortly.

In the meantime, employers should ensure that they are paying their employees at last the national minimum wage (and national living wage from 1st April 2016 – see below). As a reminder, for the period from 1st October 2015 to 30th September 2016, there are currently four different rates of national minimum wage for four different categories of worker:

  • Standard adult rate (workers aged 21 or over (no upper age limit) £6.70
  • Development rate (workers aged between 18 and 20 inclusive) £5.30
  • Young workers rate (workers aged under 18 but above the compulsory school age of 16 who are not apprentices) £3.87
  • Apprenticeship rate (apprentices under 19 years of age or those aged 19 and over but in the first year of their apprenticeship) £3.30

From 1st April 2016, there will be a new rate for workers aged 25 and over, known as the “national living wage” which will be £7.20 per hour (an increase of 50p on the current national minimum wage for workers aged 21+).

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