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Employment & HR Update

This months employment update covers:

1. Increase to statutory rates
2. Gender Pay Gap
3.Fit for work scheme closure
4.PILON tax changes
5. Working Time Regulations
6. Equality Act – Discrimination

From 1 April 2018 National Living Wage and National Minimum Wage are set to increase as follows:

  • Workers aged over 25 years (NLW): from £7.50 to £7.83
  • Workers aged 21 to 24 years: from £7.05 to £7.38
  • Workers aged 18 to 20 years: from £5.60 to £5.90
  • Workers aged 16 to 17 years: from £4.05 to £4.20
  • Apprentices (under 19 years, or in the first year): from £3.50 to £3.70

From 9 April 2018 Family Friendly Payments and SSP are also set to increase as follows:

  • Statutory maternity pay, statutory paternity pay, statutory shared parental pay and statutory adoption pay: from £140.98 to £145.18 pw
  • Statutory sick pay: from £89.35 to £92.05 pw

Employers should ensure that such payments are correctly increased from the relevant dates.

Under the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 if an organisation has 250 or more employees it must publish the following six calculations each year showing how large the pay gap is between male and female employees:

  1. The difference between the mean hourly rate of pay for full-pay male and full-pay female employees;
  2. The difference between the median hourly rate for pay for full-pay male and full-pay female employees;
  3. The difference between the mean bonus pay paid to male relevant employees and that paid to female employees;
  4. The difference between the median bonus pay paid to male relevant employees and that paid to female relevant employees;
  5. The proportion of male and female relevant employees who were paid bonus pay; and
  6. The proportion of male and female full-pay relevant employees in the lower, lower middle, upper middle and upper quartile pay bands.

The data should be based on ‘ordinary pay’ which includes, basic pay, allowances and pay for annual leave. Overtime, pay in lieu of annual leave, benefits in kind and payments relating to the termination of employment are excluded.

Employees who are paid a reduced rate because of annual, maternity, shared parental, sick or special leave are specifically excluded, to prevent the statistics from being distorted.

The deadline this year to report is 4 April 2018 (or 30 March 2018 for public sector employers). The results must be published on the employer’s website and a government website, and where applicable be confirmed in a written statement by an appropriate person, such as a chief executive.

So far 527 of the circa 9000 eligible organisations have published their data ahead of the 4 April 2018 deadline. From those who have already published their data notable results for some well-known companies include:

  • Easyjet – Women’s hourly pay rates are 52% lower than men’s
  • Ladbrokes – On average women earn 15% less per hour than men
  • Virgin Money – On average women earn 33% less per hour than men 

The government have now scrapped the ‘Fit for work’ assessment scheme. The scheme was launched 3 years ago and consisted of free information and occupational health assessment services for employees who had reached 4 weeks of sickness absence (i.e. long term).

The last referrals were taken on 15 December 2017, and the occupational health assessment service is due to close in England and Wales on 31 March 2018.

However, the ‘Fit for work’ advice line will remain open (0800 032 6235), as well as the website which offers a live chat facility (

Currently, if an employer makes a “PILON” (a payment in lieu of notice instead of the employee working their notice period) to a departing employee, and there is no right in the employee’s contract for the employer to make such a payment then, broadly, the payment can be made tax free, up to £30,000 as it is deemed to be a non-contractual payment.

However from 6 April 2018, this will change, and all PILONs (whether there is a PILON clause in the employee’s contract or not) will be treated as earnings (subject to tax and class 1 NICs). Effectively, following section 5 of the Finance (No.2) Act 2017, employers will be required to subject to tax an amount equivalent to the employee’s basic pay if notice is not worked.

Going forward this change will perhaps encourage the inclusion of PILON clauses in contracts of employment more than previously as any tax advantages of non-inclusion will now go.

Following the decision of the EAT in Crawford v Network Rail Infrastructure Ltd, no.

Mr Crawford (C) worked as a signalman for Network Rail at various signal boxes which were single manned. He worked eight hour shifts and was expected to take breaks as and when he was able to but would need to remain on call during his breaks.

Regulation 12 (f) of the Working Time Regulations confirms that the 20 minute rest break for those working more than 6 hours under regulation 12 does not apply to workers in the railway transport industry, such as C. Instead regulation 24(a) applies, and such workers are instead entitled to an equivalent period of compensatory rest, meaning C should have taken rest when possible for a minimum of 20 minutes.

C would rest when possible, taking breaks which were no longer than 20 minutes individually but which in aggregate lasted much more than 20 minutes.

The EAT drew on the case of Hughes v The Corps of Commissionaires Management Ltd in which it was set out that a rest period should be full and uninterrupted. The rest period should therefore last at least 20 minutes in one complete rest break, and employers cannot point to the aggregate of various breaks making up this time period as this would not be considered an equivalent period of compensatory rest.

As a result it was held that Network Rail had breached the Working Time Regulations and the EAT has remitted the case to the Tribunal to consider remedies.

Employers should now be mindful of the requirement to allow employees rest which should last at least 20 minutes (for those working more than 6 hours) during at least one break.

Following the decision of the Court of Appeal in Rochford v WNS Global Services, no.

Mr Rochford (R) was employed by WNS in a vertical sales lead role. R suffered from a serious back condition which was considered as a disability under the Equality Act 2010. Following surgery R was off work for almost a year. On his return to work WNS would not allow R to return to his full role and he was instead placed in a less senior role albeit his pay remained the same. There was no medical evidence to suggest R was unable to carry out his original role, and it appeared WNS demoted R in order for him to get back to speed and prove himself after such a long absence.

However, on his return to work, R refused to work arguing that his demotion and failure by WNS to give an indication as to when he could resume his original role amounted to discrimination. WNS treated the refusal to work as misconduct and later dismissed R.

The Court of Appeal confirmed the decision of the tribunal and the EAT setting out that R had been indirectly discriminated against (because of the demotion with no indication as to when he could return to his full role). However, even though R’s dismissal was procedurally unfair, his refusal to work did amount to misconduct therefore justifying the dismissal. In particular the Court stated: “it is not the law that an employee who is the victim of a wrong can in all circumstances refuse to do any further work unless and until that wrong is remedied. He may in some circumstances have to seek his remedy in the courts”.

Therefore R’s refusal to work was not considered to be a reasonable response to the discrimination; he could have instead resigned, worked under protest, or brought tribunal proceedings against WNS.

Employers should be aware of the need to properly plan an employee’s return to work following long term sickness absence.

If you would like further information on any of the above or advice on how they apply to your business then please contact Tom Evans, Associate, Employment & HR Team on or 0151 230 1217.

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