Review of IR35
With the news that Liz Truss has become the new Prime Minister comes a promise of a review of the off-payroll working rules. Mrs Truss made the promise as part of her campaign to be chosen for the top job. She believes IR35 results in the genuinely self-employed being taxed in the same way as employees without receiving the same benefits. Given the current backlog of employment related legislation which is to be brought forward "when parliamentary time allows" it remains to be seen whether any meaningful changes will be made and if so in what timescale.
New report on zero hours contracts published
The CIPD has published a report looking at the benefits, drawbacks and general usage of zero hours contracts based on a survey of employers carried out in 2021. Key points arising from the report included recommendations for creating a right to request a more stable contract and improving labour market enforcement via a single enforcement body, both proposals being similar to what is contained in the delayed Employment Bill. In addition, it recommends that a Code of Practice on responsible management of zero hours workers should be created, including a right to compensation for shifts that are cancelled at the last minute, and abolition of worker status to help clarify and enhance employment rights for zero hours workers more widely. The latter though has been ruled out by the recent UK Government response to the 2018 consultation on employment status. The report also found that only 3% of workers are engaged on zero hours contracts, a figure that has not changed much since 2015.
Changes to legislation on striking
The Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022 came into force on 21 July 2022. The effect of the Regulations is to allow employers to replace workers who are on strike or taking official industrial action with agency workers, or to replace any other worker who has been assigned to cover the striking worker. On the same date the Liability of Trade Unions in Proceedings in Tort (Increase of Limits on Damages) Order 2022 also came into force. This significantly increases the maximum damages that can be awarded against a trade union when industrial action is found to be unlawful. The new maximums are as follows:-
- For unions with less than 5,000 members - £40,000
- For unions with 5,000 to 24,999 members - £200,000
- For unions with 25,000 to 99,999 members - £500,000
- For unions with 100,000 or more members - £1,000,000
The union Unison has intimated an intention to seek a judicial review of these Regulations.
Administrative controls proposed for public sector exit payments
Following an unsuccessful attempt to put in place legislation controlling public sector exit payments in 2020/21, a consultation has been opened by the UK Government seeking views on a new administrative control process for public sector exit payments over £95,000 as well as on amendments to the process for special severance payments. An expanded approvals process for employee exits and special severance payments together with additional reporting requirements in relevant parts of the public sector is being proposed. These proposals will not impact devolved bodies in Scotland who have been subject to a £95,000 cap on exit payments since this was introduced under the Scottish Public Finance Manual in September 2019.
