Death, Taxes and Employment Law - an update

Ben Franklin said there are only two certainties in this life; death and taxes. Ben Stanton of Franklins adds a third; “and annual changes to employment law.”. This April is no different and sees a number of significant changes of which both employers and employees should be aware. The following changes are taking effect from 6th April 2018:

Ben Stanton, Managing Director of Franklin
Ben Stanton, Managing Director of Franklin's Solicitors

Notice Payments now to be taxed

Historically, if an employer wanted to make a payment in lieu of notice to an employee, they could pay this free of tax if it was deemed to be non-contractual (i.e. if it was not written in to the contract of employment or implied through prior custom and practice). However, Section 5 of the Finance (No.2) Act 2017 now confirms that all payments made to an employee in lieu of their notice will have to be taxed. HMRC’s aim was to both clarify the law and ensure that it would always receive the applicable tax, a move which now removes the potential tax-saving incentive for both employers and employees to be paid in this manner.

Minimum Wage increases

The National Minimum Wage (Amendment) Regulations 2018 has confirmed the increased minimum payments that workers are entitled to receive:

In March 2018, 179 employers were ‘named and shamed’ for failing to pay their staff National Minimum Wage. Among these were the restaurant chains Wagamamma and TGI Fridays, and the Premiership Football Club Stoke City, who variously blamed their failure on misunderstandings and accounting errors. Even the biggest employers can fall foul of this legislation.

Redundancy Payments

The limit on a week's pay for the purposes of calculating statutory redundancy payments will increase from £489 to £508.

Increase in Tribunal Claims and Payments

Since the abolition of tribunal fees in July 2017, Employment Tribunals have reported a surge in new claims, a 90% increase between October to December 2017. The Employment Rights (Increase of Limits) Order 2018 will increase the maximum Unfair Dismissal “Compensatory Award” that can be awarded by a tribunal from £80,541 to £83,682. The removal of an often preventative tribunal fee, and the obvious increase in claims being brought, makes it particularly important for employers to seek legal advice at an early stage to prevent any issues escalating into a tribunal claim.

Gender Gap Pay Reporting

Employers with more than 250 staff will be required to publish the difference in pay and bonuses between men and women. This information has to be published on both their company and a Government website. Barclays Bank has also already published its data, showing females receive 43% less pay than males and it is likely that many other employers will highlight similar disparities in pay.

General Data Protection Regulation (GDPR)

On 25th May 2018, the GDPR comes in to force in the U.K. This overrides the Data Protection Act 1998 and is applicable to all organisations, regardless of their size. GDPR imposes greater obligations on data controllers and requires them (amongst other things) to demonstrate that they have the express consent of the individual to hold their data. Employers should therefore now consider whether the data they collect and process is strictly necessary to the operation of their business and whether they have the individual’s consent to do this. Particular consideration should be given to the retention of CVs, staff files and references, and employers should also ensure that adequate training is provided to their employees in respect of the collecting, handling and storing of third party data.

If you would like further information about these or any other employment issues please contact Ben Stanton, Employment Partner at Franklins Solicitors LLP at, 01604 828282, or via our website: