The key ideas that make up the Small Business, Enterprise and Employment Bill 2014-15 (the "SBEEB") were announced with great fanfare in the Queen's speech in June 2014. Problems with enforcing tribunal awards? We'll fix that! National Minimum Wage not being taken seriously? No problem! Zero Hours Contracts? Easy! But does the current draft of the SBEEB, which reached the committee stage in the House of Lords on 7 January 2015, achieve what was promised, and what impact will it have on your business when it becomes law in the next few months? We discuss the SBEEB's employment provisions, and what this means for your business, below.
Zero Hours Contracts and exclusivity clauses
Zero Hours Contracts ("ZHCs") have been all over the news for quite some time now. This includes the revelations that Sports Direct workers on ZHCs who were excluded from the 2013 bonus payout have brought contractual claims against the company in an attempt to recover what they believe to be their fair share. Current estimates suggest Sports Direct could face a bill of up to £4m for this treatment.
So what's being done about ZHCs? They aren't being outlawed altogether, but the Government has exclusivity clauses in ZHCs firmly in its sights and intends to make them unenforceable under the SBEEB. This means that as an employer you would be unable to require the worker to be ever-available to you regardless of whether you want them to work or not.
Increased penalties for failure to pay the NMW
Unfortunately there are employers who still don't pay their workers the National Minimum Wage ("NMW") of £6.50 per hour. Not to mention the thorny issue of engaging unpaid interns.
Currently the financial penalty for failing to pay workers the NMW is subject to a cap of £20,000. The new provisions in the SBEEB, however, mean that employers who breach the requirement to pay NMW could face a potential financial penalty of up to £20,000 per worker who has not been paid their statutory entitlement to the NMW. This marks quite a shift, and will send out a strong message to all those out there not taking the NMW seriously.
There is still time for unruly employers to get their houses in order: the increased fines will only apply to pay reference periods that commence after the SBEEB's new provisions come into effect (expected to be after the General Election).
So what's the catch? Well, first HMRC have got to catch the employers at it and, whilst there has been a renewed focus on...