Small Business, Enterprise and Employment Bill (HL Bill 57)

37H Interest and recovery

(1) This section applies if all or part of a financial penalty which an
employer is required by a penalty notice to pay is unpaid at the end of
the relevant period.

(2) 5The relevant period is—

(a) if no appeal is made under section 37G(1) relating to the penalty
notice, the period specified in the penalty notice under section
37F(3)(e);

(b) if such an appeal is made, the period ending when the appeal is
10withdrawn or finally determined.

(3) The outstanding amount of the financial penalty for the time being
carries interest—

(a) at the rate that, on the last day of the relevant period, was
specified in section 17 of the Judgments Act 1838,

(b) 15from the end of the relevant period until the time when the
amount of interest calculated under this subsection equals the
amount of the financial penalty,

(and does not also carry interest as a judgment debt under that section).

(4) The outstanding amount of a penalty and any interest is recoverable—

(a) 20in England and Wales, if the county court so orders, under
section 85 of the County Courts Act 1984 or otherwise as if the
sum were payable under an order of the county court;

(b) in Scotland, by diligence as if the penalty notice were an extract
registered decree arbitral bearing a warrant for execution issued
25by the sheriff court of any sheriffdom in Scotland.

(5) Any amount received by the Secretary of State under this Part is to be
paid into the Consolidated Fund.

37I Withdrawal of warning notice

(1) Where—

(a) 30a warning notice has been given (and not already withdrawn),

(b) it appears to an enforcement officer that—

(i) the notice incorrectly omits any statement or is incorrect
in any particular, or

(ii) the warning notice was given in contravention of section
3537E(3), and

(c) if a penalty notice has been given in relation to the warning
notice, any appeal made under section 37G(1) has not been
determined,

the officer may withdraw the warning notice by giving notice of
40withdrawal to the employer.

(2) Where a warning notice is withdrawn, no penalty notice may be given
in relation to it.

(3) Where a warning notice is withdrawn after a penalty notice has been
given in relation to it—

(a) 45the penalty notice ceases to have effect;

(b) any sum paid by or recovered from the employer by way of
financial penalty payable under the penalty notice must be

repaid to the employer with interest at the appropriate rate
running from the date when the sum was paid or recovered;

(c) any appeal under section 37G(1) relating to the penalty notice
must be dismissed.

(4) 5In subsection (3)(b), the appropriate rate means the rate that, on the
date the sum was paid or recovered, was specified in section 17 of the
Judgments Act 1838.

(5) A notice of withdrawal under this section must indicate the effect of the
withdrawal (but a failure to do so does not make the notice of
10withdrawal ineffective).

(6) Withdrawal of a warning notice relating to a relevant sum does not
preclude a further warning notice being given in relation to that sum
(subject to section 37E(3)).

37J Withdrawal of penalty notice

(1) 15Where—

(a) a penalty notice has been given (and not already withdrawn or
cancelled), and

(b) it appears to an enforcement officer that—

(i) the notice incorrectly omits any statement required by
20section 37F(3), or

(ii) any statement so required is incorrect in any particular,

the officer may withdraw it by giving notice of the withdrawal to the
employer.

(2) Where a penalty notice is withdrawn and no replacement penalty
25notice is given in accordance with section 37K—

(a) any sum paid by or recovered from the employer by way of
financial penalty payable under the notice must be repaid to the
employer with interest at the appropriate rate running from the
date when the sum was paid or recovered;

(b) 30any appeal under section 37G(1) relating to the penalty notice
must be dismissed.

(3) In a case where subsection (2) applies, the notice of withdrawal must
indicate the effect of that subsection (but a failure to do so does not
make the withdrawal ineffective).

(4) 35In subsection (2)(a), “the appropriate rate” means the rate that, on the
date the sum was paid or recovered, was specified in section 17 of the
Judgments Act 1838.

37K Replacement penalty notice

(1) Where an enforcement officer—

(a) 40withdraws a penalty notice (“the original penalty notice”)
under section 37J, and

(b) is satisfied that the employer failed to pay the specified amount
in full before the specified date in accordance with the warning
notice in relation to which the original penalty notice was given,

45the officer may at the same time give another penalty notice in relation
to the warning notice (“the replacement penalty notice”).

(2) The replacement penalty notice must—

(a) indicate the differences between it and the original penalty
notice that the enforcement officer reasonably considers
material, and

(b) 5indicate the effect of section 37L.

(3) Failure to comply with subsection (2) does not make the replacement
penalty notice ineffective.

(4) Where a replacement penalty notice is withdrawn under section 37J, no
further replacement penalty notice may be given under subsection (1)
10pursuant to the withdrawal.

(5) Nothing in this section affects any power that arises apart from this
section to give a penalty notice.

37L Effect of replacement penalty notice

(1) This section applies where a penalty notice is withdrawn under section
1537J and a replacement penalty notice is given in accordance with
section 37K.

(2) If an appeal relating to the original penalty notice has been made under
section 37G(1) and has not been withdrawn or finally determined
before the time when that notice is withdrawn—

(a) 20the appeal (“the earlier appeal”) is to have effect after that time
as if it were against the replacement penalty notice, and

(b) the employer may exercise the right under section 37G to appeal
against the replacement penalty notice only after withdrawing
the earlier appeal.

(3) 25If a sum was paid by or recovered from the employer by way of
financial penalty under the original penalty notice—

(a) an amount equal to that sum (or, if more than one, the total of
those sums) is to be treated as having been paid in respect of the
replacement penalty notice, and

(b) 30any amount by which that sum (or total) exceeds the amount of
the financial penalty payable under the replacement penalty
notice must be repaid to the employer with interest at the
appropriate rate running from the date when the sum (or, if
more than one, the first of them) was paid or recovered.

(4) 35In subsection (3)(b) “the appropriate rate” means the rate that, on the
date mentioned in that provision, was specified in section 17 of the
Judgments Act 1838.

37M Enforcement officers

The Secretary of State may appoint or authorise persons to act as
40enforcement officers for the purposes of this Part.

37N Power to amend Part 2A

(1) The Secretary of State may by regulations—

(a) amend subsection (5) or (6) of section 37F by substituting a
different amount;

(b) 45amend subsection (4) or (8) of that section by substituting a
different percentage;

(c) amend section 37E(4) or 37F(7) or (9) by substituting a different
number of days.

(2) Any provision that could be made by regulations under this section
may instead be included in an order under section 12A(12).

37O 5Modification in cases of multiple financial awards or settlement sums

(1) The Secretary of State may by regulations make provision for this Part
to apply with modifications in cases where—

(a) two or more financial awards were made against an employer
on claims relating to different workers that were considered
10together by an employment tribunal, or

(b) settlement sums are payable by an employer under two or more
settlements in cases dealt with together by a conciliation officer.

(2) Regulations under subsection (1) may in particular provide for any
provision of this Part to apply as if any such financial awards or
15settlement sums, taken together, were a single relevant sum.

37P Giving of notices

(1) For the purposes of section 7 of the Interpretation Act 1978 in its
application to this Part, the proper address of an employer is—

(a) if the employer has notified an enforcement officer of an
20address at which the employer is willing to accept notices, that
address;

(b) otherwise—

(i) in the case of a body corporate, the address of the body’s
registered or principal office;

(ii) 25in the case of a partnership or an unincorporated body
or association, the principal office of the partnership,
body or association;

(iii) in any other case, the last known address of the person
in question.

(2) 30In the case of—

(a) a body corporate registered outside the United Kingdom,

(b) a partnership carrying on business outside the United
Kingdom, or

(c) an unincorporated body or association with offices outside the
35United Kingdom,

the references in subsection (1) to its principal office include references
to its principal office within the United Kingdom (if any).

37Q Financial penalties for non-payment: interpretation

(1) In this Part, the following terms have the following meanings—

• 40“claim”—

  (a)

  means anything that is referred to in the relevant
  legislation as a claim, a complaint or a reference, other
  than a reference made by virtue of section 122(2) or
  128(2) of the Equality Act 2010 (reference by court of
  45question about a non-discrimination or equality rule
  etc), and

  Small Business, Enterprise and Employment BillPage 134

  (b)

  also includes an application, under regulations made
  under section 45 of the Employment Act 2002, for a
  declaration that a person is a permanent employee;

• “employer” has the same meaning as in section 12A;

• 5“enforcement officer” means a person appointed or authorised to
  act under section 37M;

• “financial award” has the meaning given by section 37A;

• “penalty notice” has the meaning given by section 37F;

• “relevant sum” has the meaning given by section 37A;

• 10“settlement sum” has the meaning given by section 37A;

• “specified amount” and “specified date”, in relation to a warning
  notice or a penalty notice given in relation to it, have the
  meanings given by section 37E(2);

• “unpaid amount”—

  (a)

  15in relation to a financial award, has the meaning given
  by section 37B;

  (b)

  in relation to a settlement sum, has the meaning given
  by section 37C;

  subject, in each case, to section 37D;

• 20“warning notice” has the meaning given by section 37E(2);

• “worker” has the same meaning as in section 12A.

(2) References in this Part to an employer, in relation to a warning notice
or penalty notice, are to the person to whom the notice is given
(whether or not the person is an employer at the time in question).

(3) 25For the purposes of this Part, a penalty notice is given in relation to a
warning notice if it is given as the result of a failure by the employer to
pay the specified amount before the specified date.

(4) The Secretary of State may by regulations amend this section so as to
alter the meaning of “claim”.

(5) 30Any provision that could be made by regulations under subsection (4)
may instead be included in an order under section 12A(12).”

(3) In section 12A (financial penalties), after subsection (12) insert—

“(12A) Any provision that could be made by an order under subsection (12)
may instead—

(a) 35in the case of provision that could be made under paragraph (a)
or (b) of that subsection, be included in regulations under
section 37N;

(b) in the case of provision that could be made under paragraph (c)
of that subsection, be included in regulations under section
4037Q.”

(4) In section 19A (conciliation: recovery of sums payable under settlements), after
subsection (10) insert—

“(10A) A term of any document which is a relevant document for the purposes
of subsection (1) is void to the extent that it purports to prevent the
45disclosure of any provision of any such document to a person
appointed or authorised to act under section 37M.”

(5) In section 41(2) (orders, regulations and rules)—

(a) after “38(4),” omit “and”;

(b) after “40,” insert “and no regulations are to be made under section 37N,
37O or 37Q(4),”;

(c) for “or order” substitute “, order or regulations”.

(6) 5In section 42(1) (interpretation), after “In this Act” insert “(except where
otherwise expressly provided)”.

(7) In section 251B of the Trade Union and Labour Relations (Consolidation) Act
1992 (prohibition on disclosure of information by ACAS), in subsection (2),
after paragraph (c) insert—

“(ca) 10the disclosure is made for the purpose of enabling or assisting
an enforcement officer within the meaning of Part 2A of the
Employment Tribunals Act 1996 to carry out the officer’s
functions under that Part;”.

(8) The amendments made by this section have effect only in relation to relevant
15sums where—

(a) in the case of a financial award, the decision of the employment tribunal
on the claim to which the financial award relates is made on or after the
day on which this section comes into force;

(b) in the case of a settlement sum, the certificate under section 19A(1) of
20the Employment Tribunals Act 1996 in respect of the settlement under
whose terms it is payable is issued on or after that day.

Employment tribunals: postponements

146 Employment tribunal procedure regulations: postponements

(1) The Employment Tribunals Act 1996 is amended as follows.

(2) 25In section 7 (employment tribunal procedure regulations), after subsection
(3ZA) insert—

“(3ZB) Provision in employment tribunal procedure regulations about
postponement of hearings may include provision for limiting the
number of relevant postponements available to a party to proceedings.

(3ZC) 30For the purposes of subsection (3ZB)—

(a) “relevant postponement”, in relation to a party to proceedings,
means the postponement of a hearing granted on the
application of that party in—

(i) the proceedings, or

(ii) 35any other proceedings identified in accordance with the
regulations,

except in circumstances determined in accordance with the
regulations, and

(b) “postponement” includes adjournment.”

(3) 40In section 13 (costs and expenses), after subsection (2) insert—

“(3) Provision included in employment tribunal procedure regulations
under subsection (1) must include provision for requiring an
employment tribunal, in any proceedings in which a late postponement
application has been granted, to consider whether to make an award

against the party who made the application in respect of any costs or
expenses connected with the postponement, except in circumstances
specified in the regulations.

(4) For the purposes of subsection (3)—

(a) 5a late postponement application is an application for the
postponement of a hearing in the proceedings which is made
after a time determined in accordance with the regulations
(whether before or after the hearing has begun), and

(b) “postponement” includes adjournment.”

(4) 10In section 13A (payments in respect of preparation time), after subsection (2)
insert—

“(2A) Provision included in employment tribunal procedure regulations
under subsection (1) must include provision for requiring an
employment tribunal, in any proceedings in which a late postponement
15application has been granted, to consider whether to make an order of
the kind mentioned in subsection (1) against the party who made the
application in respect of any time spent in connection with the
postponement, except in circumstances specified in the regulations.

(2B) For the purposes of subsection (2A)—

(a) 20a late postponement application is an application for the
postponement of a hearing in the proceedings which is made
after a time determined in accordance with the regulations
(whether before or after the hearing has begun), and

(b) “postponement” includes adjournment.”

25National minimum wage

147 Amount of financial penalty for underpayment of national minimum wage

(1) Section 19A of the National Minimum Wage Act 1998 (notices of
underpayment: financial penalty) is amended as follows.

(2) In subsection (4), for the words following “to be” substitute “the total of the
30amounts for all workers to whom the notice relates calculated in accordance
with subsections (5) to (5B).”

(3) For subsection (5) substitute—

“(5) The amount for each worker to whom the notice relates is the relevant
percentage of the amount specified under section 19(4)(c) in respect of
35each pay reference period specified under section 19(4)(b).

(5A) In subsection (5), “the relevant percentage”, in relation to any pay
reference period, means 100%.

(5B) If the amount as calculated under subsection (5) for any worker would
be more than £20,000, the amount for the worker taken into account in
40calculating the financial penalty is to be £20,000.”

(4) Omit subsection (7).

(5) In subsection (8)—

(a) in paragraph (a), for “(4)” substitute “(5A)”;

(b) in paragraph (b), for “(6) or (7)” substitute “(5B) or (6)”.

(6) The amendments made by this section have effect in relation to notices of
underpayment which relate only to pay reference periods commencing on or
after the day on which this section comes into force.

5Exclusivity in zero hours contracts

148 Exclusivity terms unenforceable in zero hours contracts

(1) The Employment Rights Act 1996 is amended as follows.

(2) After section 27 insert—

“ Part 2A 10Zero hours workers

27A Exclusivity terms unenforceable in zero hours contracts

(1) In this section “zero hours contract” means a contract of employment or
other worker’s contract under which—

(a) the undertaking to do or perform work or services is an
15undertaking to do so conditionally on the employer making
work or services available to the worker, and

(b) there is no certainty that any such work or services will be made
available to the worker.

(2) For this purpose, an employer makes work or services available to a
20worker if the employer requests or requires the worker to do the work
or perform the services.

(3) Any provision of a zero hours contract which—

(a) prohibits the worker from doing work or performing services
under another contract or under any other arrangement, or

(b) 25prohibits the worker from doing so without the employer’s
consent,

is unenforceable against the worker.

(4) Subsection (3) is to be disregarded for the purposes of determining any
question whether a contract is a contract of employment or other
30worker’s contract.

27B Power to make further provision in relation to zero hours workers

(1) The Secretary of State may by regulations make provision for the
purpose of securing that zero hours workers, or any description of zero
hours workers, are not restricted by any provision or purported
35provision of their contracts or arrangements with their employers from
doing any work otherwise than under those contracts or arrangements.

(2) In this section, “zero hours workers” means—

(a) employees or other workers who work under zero hours
contracts;

(b) 40individuals who work under non-contractual zero hours
arrangements;

(c) individuals who work under worker’s contracts of a kind
specified by the regulations.

(3) The worker’s contracts which may be specified by virtue of subsection
(2)(c) are those in relation to which the Secretary of State considers it
5appropriate for provision made by the regulations to apply, having
regard, in particular, to provision made by the worker’s contracts as to
income, rate of pay or working hours.

(4) In this section “non-contractual zero hours arrangement” means an
arrangement other than a worker’s contract under which—

(a) 10an employer and an individual agree terms on which the
individual will do any work where the employer makes it
available to the individual and the individual agrees to do it,
but

(b) the employer is not required to make any work available to the
15individual, nor the individual required to accept it,

and in this section “employer”, in relation to a non-contractual zero
hours arrangement, is to be read accordingly.

(5) Provision that may be made by regulations under subsection (1)
includes provision for—

(a) 20modifying—

(i) zero hours contracts;

(ii) non-contractual zero hours arrangements;

(iii) other worker’s contracts;

(b) imposing financial penalties on employers;

(c) 25requiring employers to pay compensation to zero hours
workers;

(d) conferring jurisdiction on employment tribunals;

(e) conferring rights on zero hours workers.

(6) Provision that may be made by virtue of subsection (5)(a) may, in
30particular, include provision for exclusivity terms in prescribed
categories of worker’s contracts to be unenforceable, in cases in which
section 27A does not apply.

For this purpose an exclusivity term is any term by virtue of which a
worker is restricted from doing any work otherwise than under the
35worker’s contract.

For this purpose an exclusivity term is any term by virtue of which a
worker is restricted from doing any work otherwise than under the
worker’s contract.

(7) Regulations under this section may—

(a) 40make different provision for different purposes;

(b) make provision subject to exceptions.

(8) For the purposes of this section—

(a) “zero hours contract” has the same meaning as in section 27A;

(b) an employer makes work available to an individual if the
45employer requests or requires the individual to do it;

(c) references to work and doing work include references to
services and performing them.

(9) Nothing in this section is to be taken to affect any worker’s contract
except so far as any regulations made under this section expressly
50apply in relation to it.”

(3) In section 236(3) (orders and regulations subject to affirmative procedure),
after “made under section” insert “27B,”.

Public sector exit payments

149 Regulations in connection with public sector exit payments

(1) 5The Treasury may by regulations make provision requiring the repayment of
some or all of any qualifying exit payment in prescribed circumstances (see
section 150).

(2) The regulations may make such other provision in connection with qualifying
exit payments as the Treasury think fit.

(3) 10A qualifying exit payment is a payment of a prescribed description—

(a) made to an employee of a prescribed public sector authority in
consequence of the employee leaving employment, or

(b) made to a holder of a prescribed public sector office in consequence of
the office holder leaving office.

(4) 15The descriptions of payment which may be prescribed by virtue of subsection
(3) include—

(a) any payment on account of dismissal by reason of redundancy (read in
accordance with section 139 of the Employment Rights Act 1996),

(b) any payment on voluntary exit,

(c) 20any payment to reduce or eliminate an actuarial reduction to a pension
on early retirement,

(d) any severance payment or other ex gratia payment,

(e) any payment in respect of an outstanding entitlement (such as to
annual leave or an allowance),

(f) 25any payment of compensation under the terms of a contract,

(g) any payment in lieu of notice, and

(h) any payment in the form of shares or share options.

(5) If more than one qualifying exit payment is payable to an employee or office
holder the provision made in the exit payments regulations is to apply in
30relation to the aggregated payments.

(6) Exit payment regulations are subject to negative resolution procedure.

(7) For the purposes of this section and sections 150 and 151—

• an “exit payee” is an employee or office holder to whom any qualifying
  exit payment is payable,

• 35the “exit payments regulations” are regulations under subsection (1),

• a “responsible authority” means an authority by which any qualifying exit
  payments are payable, and

• “prescribed” means prescribed by the exit payments regulations.

150 Section 149(1): further provision

(1) 40In making any provision by virtue of section 149(1), the exit payments
regulations may, in particular, require repayment where, within a prescribed
period, an exit payee becomes—