Employers should be aware of several key legal areas which are likely to affect their businesses during 2015 and beyond, says employment law specialist Shoosmiths.
Shared parental leave
Although shared parental leave officially became law on December 1st 2014, the new rules won’t kick in until April 2015. Parents of babies which are due on or after 5th April, or parents of children due to be adopted will be entitled to split their maternity and/or paternity leave between them or choose to take some time off together.
Under the new rules, shared parental leave can begin after an initial two weeks of leave has been taken by either parent, after which parents can opt to share up to 50 weeks of leave and up to 37 weeks of pay.
The schedule of leave must be planned up to eight weeks in advance and with prior agreement between employer and employee.
The debate around holiday pay calculations is likely to continue well into 2015, Shoosmiths law firm warn. Confusion has arisen due to ambiguity around the EU Working Time Directive which states that staff are entitled to four weeks’ holiday pay, but it failed to stipulate how pay should be calculated. Up until now, UK businesses calculated holiday pay at the employer’s most basic rate of pay, but in November, the Employment Appeal Tribunal ruled that some type of overtime should now be included in these calculations, too.
Currently, whether or not to include commission into holiday pay is still being considered.
Zero hours contracts
In June last year, the government announced a ban on employers preventing staff on zero hours contracts from seeking work elsewhere. A consultation into the potential loopholes employers could use to avoid the ban was also launched. However, the government ruled out an out-right ban on zero hours contracts all together, despite trade union criticism that such contracts were exploitative. Business Secretary Vince Cable described zero hour contracts as ‘flexible’ but acknowledged that some ‘unscrupulous’ firms had abused them. The government’s response to their zero-hours contract consultation which closed last November is due during 2015.
Commenting on the key legal areas highlighted by Shoosmiths, Martha How, Reward Partner at Aon Employee Benefits said: “In terms of business impact, holiday pay and zero hours contracts (for certain sectors) are going to be much more significant for employers. Holiday pay legislation in particular is going to have an enormous impact, especially because it depends entirely on the type of employees, whether they work overtime as part of a contractual commitment and whether they routinely earn commission. The lack of clarity on how holiday pay should be calculated adds another level of concern.”
She added: “Shared parental leave on the other hand, whilst a very important and good thing for employees, in practical terms, how many young, aspiring 35-year-olds with young families are going to feel comfortable taking flexible parental leave when they are worried about their career prospects and the financial impact? The only way for shared parental leave to make a huge impact on employees and employers, is if the culture of the organisation is extremely positive and flexible to allow parental leave to happen without it damaging career prospects.”
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