Regulatory Matters for NI EmployersPosted in : Back to Basics on 26 February 2019
In the first instalment of our brand new video series in partnership with A&L Goodbody, Gareth Walls, partner and head of the Employment and Incentives team in Belfast, discusses regulatory matters for employers in Northern Ireland, particularly new entrants to the market with foreign direct investment.
In this video, Gareth outlines the obligations of employers with regard to different legislative areas, including, pensions and auto-enrolment, gender pay gap reporting, and modern slavery, highlighting the growing trend that the responsibility for employees at work is moving away from the state and into the public and private sectors.
So today, I'm going to talk about regulation matters for employers in Northern Ireland and particularly, new entrants to Northern Ireland with foreign direct investment. We all know that the contract of employment has historically dealt with the way of the particulars of employment and everything that that entails. Predominantly, we need to understand of course that the particulars for employment are never actually static. We have the employer-derived terms and conditions of employment but in relation to that as well, we also have all the other jurisdictional legislation which applies—the health and safety legislation, the public liability insurance, the employer's liability insurance, and of course, the DDA in 1995.
Disability Discrimination Act 1995
The Disability Discrimination Act 1995 is a particularly good example to see how regulation applies. For example, because it is so far removed from what actually the initial legislation was like in '95. But in any event, what I'm really illustrating today is that the trending and the responsibility for employees at work is moving far, far away from the state and into the public and private sectors and particularly, in Northern Ireland as we move away from reliance in the public sector to the private sector.
We've seen that in the past again in relation to pension contributions whereas most of us would have started our employment with the SERPS pension scheme or indeed, the State Second Pension. Those have been grossly underfunded. So the responsibility has passed again from public to private sector. Not only was the stakeholder scheme introduced, it didn't really work. We moved on to the NEST pension scheme, again, didn't really work.
So now, we're into auto-enrolment. And over the last few years, all employers have now become effectively auto-enrolled in relation to that scheme. So you can expect and anticipate the change in that regard will now be where employers are expected to increase the percentage contributions in relation to everything.
Fair Employment and Treatment Order 1998
But it's not just pensions. Equality monitoring is a very Northern Irish thing and while the Equality Act 2010 doesn't apply here, we still have the Fair Employment and Treatment Order 1998 and it's still really quite invasive in relation to the regulation that an employer needs to follow when setting up in Northern Ireland when monitoring its workforce.
General Data Protection Regulation
But of course, 2018, saw a massive change in relation to the GDPR, massively heralded in May 2018, we saw the development of that and an awful lot of correspondence in and around that. But to be fair, the GDPR was actually a little bit more of just an expansion of the existing regime in relation to data protection, and again, you can see how the desire and the need to control data and to protect it and to conserve it as confidential for all parties is becoming an entirely new legal discipline in its own right. You now have GDPR specialists whereas before, that just simply wasn't a necessity.
And of course, it is also very much a litigation tool in relation to the subject access requests which most lawyers are using in the employment sphere as an extension of the discovery exercise. So you can see again how very well-intentioned legislation is having an impact on how we practice.
Gender Pay Gap Reporting
But then of course, we also have GPGR. Now, people will say, well, actually, that doesn't necessarily apply in Northern Ireland quite yet, and that's true but there are two points I need to make in that. First of all, the Northern Irish bill is in play. Once Stormont is up and running, we expect gender pay gap reporting to be introduced really quite quickly and furthermore, the regime that Northern Ireland anticipates is going to be much more excessive in a sense, much more invasive again than the regime as it applies in GB currently. And in particular, that's going to be in relation to the threshold for which employers must comply with which is going to drop from 250 in GB to probably 50 in Northern Ireland and also, the monitoring of the workforce will be different in terms of the categories of employee and the categories of information which is recovered.
We'll talk about that in other videos, so I'll leave that. I won't go into that in any more detail today.
And of course, the second point in GPGR is that it's effectively already here. A lot of our employers in Northern Ireland are GB headquartered and because of their numbers already, the employees who are physically based in Northern Ireland but are working to a GB headquartered company are already being monitored and regulated in relation to GPGR requirements.
Modern Slavery Act 2015
But of course, we also have modern slavery, modern slavery as a piece of legislation came in in 2015. Its principal focus quite rightly was in relation to human trafficking and seeking to try and deal with that. But Section 54 of the Modern Slavery Act 2015 brought in a corporate responsibility and that was directly in relation to transparency and supply chains.
On the face of it, that doesn't actually mean very much for employers in Northern Ireland but whenever you unpack that just a little, you see actually there is an obligation for any entity in Northern Ireland which either has a turnover of 36 million north of that or indeed, and this is probably more germane, any entity who operates within the supply chain off an entity with a turnover of north of 36 million per annum. It means that neither has to be a statement in relation to MSA compliance, consideration of training which is to be cascaded down from senior management through the entire teams within an organisation and fundamentally, accountability.
The last thing to be remembered about modern slavery is that it is very much an iterative piece of legislation. There are entry-level compulsory requirements where your turnover is 36 million north but the home office roll out to the vast majority of employers in Northern Ireland and in GB in October 2018, to indicate that they would anticipate consensual compliance with the Modern Slavery Act and then, the legislation will move from there. Year on year, there needs to be change and increased audits, increased sampling, and better responses to your questionnaires.
And finally, I suppose, where would we be without Brexit? Brexit is going to bring with it an awful lot of uncertainty. We know that already. But regardless of what happens, whether there is a hard Brexit or soft Brexit, whatever, what is clear is that the visas and immigration regime is, which is already fairly heavily regulated, is going to continue to expand. We know that there will be additional rights to work checks and whilst those exist in contracts at the minute, very light touch, almost no one in practice ever actually applies them or deals with them. That is going to change under Brexit one way or the other.
And even if there is a two-year transition and even if there will be free movement of workers and even if all the current EU residents who are working here will have an ability to stay, etc., etc, nevertheless, we can expect change. That is not necessarily a Brexit piece, that is just a continuation of the current trend.
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