Employment law in review

Posted on 27 May 2011 by The Manufacturer

Eversheds' industrial engineering sector group provides an overview of employment law updates.

In the UK, the government introduces changes to employment law in April and October each year. An overview of this spring’s employment law changes, which took effect from April 6, (unless otherwise stated), are set out below.

Equality Act

Positive action on recruitment and promotion

The controversial power for employers to take positive action on recruitment and promotion contained in the Equality Act 2010 came into force, thereby allowing employers to recruit or promote employees because they have under-represented characteristics, for example, their sex or race if they are ‘as qualified as’ other candidates, provided this is done on a case-by-case basis rather than as a matter of policy.

Codes of practice
The Equality and Human Rights Commission’s new statutory codes of practice on equal pay and employment will come into force and the various statutory codes of practice concerning the pre-October 2010 discrimination legislation will be revoked.

View Equality Act codes of practice here

Longer paternity leave
Industrial Engineering companies frequently have more male workers than female workers. This law therefore has potential impact for the sector as it grants new rights to fathers, although there is speculation about how often these rights will be taken up. Regulations will enable mothers of children due on or after 3 April 2011 to transfer up to six months of their maternity leave to eligible employees (usually fathers) when they return to work. This may or may not be paid leave, depending upon the amount of statutory maternity pay already received by the mother, so that the pay eligibility will be determined by reference to the mother’s earnings. Similar provisions will apply to adoptive parents.

The regulations do not affect the maternity (or adoption) pay period and there are no plans to increase this period to 12 months, in line with the period of leave.

New measures to control the number of migrants that can come to the UK from outside Europe will come into force. These include an annual limit of 20,700 on those coming to the UK under Tier 2 (general) and abolishing the existing Tier 1 (general) category and replacing it with a new Tier 1 (exceptional talent) category, which will be limited to 1,000 people.

Maternity, paternity, adoption and sick pay rates
Weekly rates of statutory maternity, paternity and adoption leave pay will increase from £124.88 to £128.73 and the rate of statutory sick pay will increase from £79.15 to £81.60.

Taxation changes
Significant changes will be made to the operation of PAYE on both payments made to employees following the termination of their employment and on the engagement of new employees who fail to provide a P45. From that date, employers will be required to operate PAYE on payments made using an ‘OT’ tax code, which will require deductions to be made at the basic, higher or additional rates as appropriate.