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Law for Business

Knowhow - guidance - precedents

13 MAY 2015

Upcoming changes to employment law that impact your family business

Mark Stevens
Associate, Veale Wasbrough Vizards

The rules and regulations that impact upon employees are constantly changing. In this article, Mark Stevens outlines the key changes due to come into force this year that are likely to impact family businesses.

1. Shared Parental Leave

Parent employees will have the option (subject to eligibility) to take maternity leave and ordinary paternity leave together, or to opt-in to take Shared Parental Leave (SPL).

SPL will allow eligible parents to share the balance of the mother's untaken maternity leave (50 weeks in most cases). It can be taken by either partner consecutively or simultaneously, and continuously or discontinuously. A partner can also take SPL at the same time as the mother is taking her compulsory maternity leave.

Shared Parental Pay whilst on SPL may also be available - at the same rates as statutory maternity pay - for a maximum of 39 weeks.

What should you do now?

It is important to start thinking about SPL now and the potential impact it may have on your family business. Policies will need to be updated and managers will need to receive appropriate training so that they are ready to deal with any requests for SPL.

2. Holiday pay - should you count overtime and commission?

In the recent case of British Gas v Lock, the European Court of Justice ruled that when calculating what pay a worker should receive during a period of statutory leave, any commission received should also be taken into account.

In the much publicised Bear Scotland decision, the Employment Appeal Tribunal (EAT) determined that non-guaranteed overtime should also be taken into account when calculating pay received during periods of leave taken under the Working Time Directive.

What should you do now?

Employers should evaluate their workforce and assess whether their holiday pay calculations need to be varied to include commission and/or overtime. Consideration should also be given to potential exposure to back pay.

Employers who fail to make the appropriate payment to an employee during a period of annual leave could face a claim for unauthorised deductions from wages at the Employment Tribunal.

3. Zero hours contracts - are they lawful?

On 25 June 2014, the government announced that it will be banning the use of exclusivity clauses in zero hour contracts.

Clauses of this kind prevent employees from working for other employers, even during periods when they are not receiving any work.

What should you do now?

There are undoubtedly situations where zero hour contracts are appropriate. Zero hours contracts, if used responsibly, can offer welcomed flexibility to employers and employees. However, this announcement highlights that the government intends to clamp down on the abuse of zero hour contracts. Employers who use zero hour contracts should therefore be mindful of the forthcoming ban on exclusivity clauses and amend any existing contracts of templates accordingly, in order to ensure that they remain enforceable.

As the government has also reserved the right to regulate the use of zero hour contracts further, family businesses should keep their use under careful review to ensure they are ready to respond to any future changes to the rules.
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