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ent laws are occupying lawyers as much as new package travel rules. Ian Taylor reports

Pay: Employers ‘face challenges over salary rules’

Employers face a series of challenges on pay in light of government policy and recent legal cases.

The national living wage for

workers aged 25-plus, introduced on April 1, will add billions to the wage bill. But businesses also have to deal with an expanded definition of holiday pay and requirements for larger firms to report pay differentials between men and women. Rebecca Thornley-Gibson,

partner at asb Law, identified the retail, hospitality and leisure sectors as “feeling the greatest impact” of the national living wage, with retail alone estimated to need £3 billion by 2020 to fund the proposed increase. Thornley-Gibson told the Abta

travel law seminar: “That is a significant amount of money when the retail sector is not looking very healthy.” The national living wage is set

at £7.20 an hour this year and should rise to £9 by 2020. Women workers, those aged 25-30 and staff over 66 are most likely to

benefit, along with workers in low-pay “hotspots”. Thornley-Gibson noted

employers can be fined £20,000 per employee for not complying, but she suggested firms could “restructure remuneration to mitigate the effect”. She also identified holiday pay

as an issue, saying: “It used to be employers thought they just had to pay the annual salary.” That changed in 2010 when a case brought by British Airways pilots determined that additional payments should be included in holiday pay calculations. A subsequent case against

British Gas determined employers should also include commission in holiday pay for those in commission-based roles. Thornley-Gibson said: “The


Fine per employee for firms not paying NLW

A vote to leave the EU should have little impact on travel regulations but could be “significant for the industry” in other ways, according to Neil Baylis, partner at law firm K&L Gates. Baylis told the Abta travel law seminar: “There are significant benefits for the industry from the EU, such as visa-free travel. It was the European Open Aviation Area which, in effect, created the budget airline market. And it’s hard to imagine the restaurant and

ADDING UP: Firms are counting cost of new pay requirements

financial implications are high. So 60%-70% of our clients are waiting to see what others do and not being proactive about informing employees. They are worried about backdated claims.” The government has imposed

a two-year limit on backdated claims, but Thornley-Gibson said: “A lot of employers still feel they don’t want to alert employees to the issue.” She warned: “There is probably six years of litigation to come on holiday pay issues.” Companies with 250 or more staff will also soon be required to report on gender pay differences. Thornley-Gibson said: “If your gender-pay differential looks out of kilter, someone is going to make a headline out of it.” The requirement comes into force on October 2016, with a deadline of April 2018 to comply.

EU: Brexit ‘unlikely to affect key legislation’

hotel trades managing if a leave vote were to shut off immigration from the rest of Europe.” But he said: “There would be no immediate regulatory

change. Key legislation would remain applicable. “Ten years is a reasonable estimate of how long it

would take the UK [to leave]. There would be long-term uncertainty. I don’t see any changes to travel law. Companies doing business across Europe would need to comply with regulations coming out of Europe.”

Consultations: Trade views sought on PTD and Atol

The industry faces consultations on package travel regulations and Atol reform either side of the summer following a delay in consulting on changes required by the new Package Travel Directive (PTD). However, a vote to leave the EU in the June 23 referendum should not stop the government implementing the directive. The Department for Business,

Innovation and Skills (BIS) is preparing to consult on PTD im- plementation, and the Department for Transport (DfT) will consult on changes to the Atol regime. It was hoped these consultations

would appear together before the summer. But Stephen Powton, a member of the DfT’s consumer financial protection and consumer division, said the consultations are now likely to be separate. He said: “We’re working on the

basis the first consultation will be before the summer. I would expect the second to be in the autumn.” Powton implied it is possible the

DfT consultation could come first, saying: “There is a hard deadline of January 2018 we have to meet.” Robert Scott, policy adviser to

BIS, declined to say what might happen if there is a referendum vote to leave. But Abta head of public affairs Stephen D’Alfonso said: “I can’t see the UK government looking to push back on a measure it has pushed for.” D’Alfonso described the PTD

as a “UK-focused travel directive”. But he warned: “The timetable is getting tight and we need time to prepare businesses.” He said the delay caused by

the referendum made radical change unlikely, arguing: “We will probably see a phased implementation, with just what is necessary for compliance first.”

19 May 2016 69

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