Our weekly top five for employers: 26 February 2019

1. Getting ready for the next gender pay gap reporting deadline

With the next deadline for gender pay gap reporting approaching, around 40% of companies that have already published their latest gender pay gap reports are showing a wider median pay gap than last year. However, only 10% of employers have reported their figures ahead of the 4 April 2019 deadline so far.

The Equality and Human Rights Commission (EHRC) has indicated it will take robust enforcement action against those who do not comply, in the form of investigations, potential court action, the threat of unlimited fines, and naming and shaming. As a result, employers need to make sure they are taking a proactive approach to their gender pay reporting obligations.

There are a number of practical steps that employers should be taking now in readiness for the 4 April deadline. Please contact your usual OC Contact who will be happy to advise on how we can assist you in meeting your reporting obligations.

2. Are your salary sacrifice schemes impacting on NMW compliance?

The impact of salary sacrifice schemes on NMW compliance has recently been thrown into the spotlight with HMRC finding that salary deductions for the purposes of a Christmas savings schemes at a large retailer breached NMW regulations, despite the scheme being for the benefit of employees.  Whilst HMRC have been heavily criticised by some for interpreting the NMW regulations in an overly stringent manner, HMRC has argued that the rules are simple: if an employer deducts amounts from employees' wages, which leaves them with less than NMW in their pay packet, that employer will be in breach of the NMW regulations (provided the deductions do not fall within the specific exceptions). However, HMRC's approach in this case is in contrast to a recent tax tribunal decision where deductions from employees' wages made by a football club to cover the cost of season tickets were found not  to be in breach of NMW rules as they were for the benefit of the employees and not the club. We must now wait to see whether or not this decision will impact here.

It is clear that NMW compliance is a key priority for the government. Indeed, the government is currently consulting on whether NMW rules on salary sacrifice schemes are inadvertently penalising employers. The consultation closes on 1 March 2019.

3. TUPE: Dismissal on day of 'TUPE' transfer due to difficulties in the working relationship was automatically unfair

The Court of Appeal (CA) has highlighted the difficulties which can arise where an employee is dismissed at or around the time of a TUPE transfer.  Here the CA held that an employee dismissed on the day of a TUPE transfer, ostensibly due to difficulties in her working relationship with a colleague, was automatically unfairly dismissed.

The claimant's former employer ceased trading due to unforeseen circumstances and the business and employees were transferred as a going concerned to a new company HW Ltd.  The claimant had a strained relationship with one of her colleagues at her former employer who was due to become a director of HW Ltd.  The claimant was subsequently dismissed on the transfer day.

The CA agreed with both the Employment Tribunal and Employment Appeal Tribunal that HW Ltd did not want the claimant working for it as it anticipated there would be on-going relationship difficulties.  The timing of her dismissal, against the backdrop that the claimant and her colleague had had a poor relationship for some time, was strong evidence that the sole or principal reason for dismissal was the transfer. Her dismissal was therefore automatically unfair.  The employer's argument that the claimant had in fact objected to the transfer as she did not want to work for HW Ltd, and which would have meant her employment terminated without a dismissal, was rejected.

Dismissals made at or around the time of a TUPE transfer will inevitably face scrutiny as to what the real purpose of the dismissal is.  Where any dismissals are contemplated, legal advice should be sought on the potential risk of claims and appropriate protection against those risks by way of warranties and indemnities included in the acquisition documentation as appropriate.

Hare Wines Ltd v Kaur (CA)

4. Brexit: Do your employees need to renew their passports?

UK employers are being encouraged to ensure employees who travel to the EU for work purposes renew their passports now if they have less than 6 months on them.  It has been reported that in the event of a 'no deal' Brexit on 29 March 2019, UK passports with fewer than 6 months could encounter difficulties when arriving in the Schengen area. The new 'Passport rules for travel to Europe after Brexit' on the gov.uk website state that in the event of no deal, UK passport holders will need to have 6 months left on their passport from their date of arrival. If passports are renewed before their expiry date, up to 9 extra months may be added.

An estimated 4.8 million people travelled from the UK to the EU for business in 2017 and around 5 million renewed their passports in 2009 (which are likely to require renewal this year). Employers are advised not to leave renewals until the last minute to avoid processing delays.

5. Call for parents of premature babies to get more time off

A survey carried out this month by neonatal charity Bliss and BBC Radio 5 Live Investigates has shown that a third of fathers of premature and sick babies have to return to work whilst the child is still in intensive care. Of the 737 parents surveyed, who all had experience of neonatal care, 77% felt their parental leave was not long enough, rising to 90% among parents whose baby was in neonatal care for 10 weeks or more.

The government is currently reviewing rules in place for parents of premature and sick babies. This follows calls by David Linden, the SNP MP for Glasgow East, in November for the government to extend statutory paternity leave for fathers of premature babies. He explained the difficulty for new parents of spending weeks in neonatal intensive care units under the current leave arrangements. Campaigners are calling for parents of premature babies to have their parental leave extended by the amount of time their baby is in hospital.

Whilst we wait to see if the government moves forward with any proposals to change the current rules, employers should ensure parents are aware of what leave is available to them, such as dependant or parental leave.  Employers can also look to make specific provision in their own paternity policies and it may be appropriate in some cases for discretion to be exercised on a case by case basis.