Employment law updates: important changes for employers

The latest UK employment law changes for employers, HR professionals and in-house lawyers

11 March 2020

COVID-19 is presenting an unprecedented challenge for business. With people at the heart of the crisis read our guide for employers on the key issues here. 

Employment law is constantly on the move. We keep track of the latest employment law changes so you don't have to. Below you'll find our regular round-up of legislation, case updates and helpful guides. For a list of key dates for 2020, see our employment law timeline. For a quick summary of the top five topics for HR teams to be thinking about in 2020, see the latest video by Adrian Martin, Head of the Employment team.

Woman holding phone

Employment law updates

Section 1 written statements

Employers will need to review their contracts to ensure that they comply with the new rules that come into effect for employees and workers engaged on or after 6 April 2020. The key changes are:

  • all workers and employees must be provided with a Section 1 written statement of terms on or before starting work (currently it must be provided within one month and only applies to employees)
  • the majority of details must be included in one document and a reference to a separate document is only permitted for certain information, for example, pensions or collective agreements
  • the Section 1 statement must set out new particulars, including the days and hours of work (and any variation) and any probationary period, paid leave, benefits and training.

In addition, on 6 April 2020 the reference period used to calculate holiday pay increases from 12 weeks to 52 weeks (or if a worker does not have 52 weeks’ service, however many weeks they have accrued). The government has now updated its guidance on calculating statutory holiday pay for workers without fixed hours or pay in anticipation of this change.

IR35

The government has announced that it plans to push ahead with implementing the changes to the off-payroll working rules in the private sector from 6 April 2020. It has also published its response to the review. Key points include:

  • the rules will only apply to services provided on or after 6 April 2020 (not to services that were provided before that date but invoiced after it)
  • the government will legislate in order to oblige clients to respond when agencies or workers request information about their size
  • HMRC will take a light-touch approach to enforcement in the first year and will not impose penalties for inaccuracies unless there is evidence to show that there has been deliberate non-compliance with the rules and will not use any information gathered from the implementation of the rules to open any historical enquiries

HMRC will run a campaign to raise awareness of the rules and provide support and guidance in various forms to enable companies and contractors to understand the changes.

COVID-19 (Coronavirus)

Whilst a very fast moving issue, both the government and Acas have now published guidance for employers and businesses on how to deal with issues in the workplace surrounding coronavirus.

As part of its strategy to contain coronavirus, the government has announced that it will bring forward emergency legislation temporarily amending the eligibility requirements for SSP, allowing the payment to be made from the first day of sickness absence and also making it available to those advised to self-isolate and those caring for others within the same household who self-isolate. The government has also committed in the Budget that the cost of providing SSP to any employee off work due to coronavirus will be refunded by the government in full for up to 14 days for businesses with fewer than 250 employees.

For further advice on these issues and your response to coronavirus please get in touch with your usual contact or a member of the wider employment team.

Statutory payments

The annual increases to various statutory compensation limits have been announced. These increases are of particular relevance to those making redundancies on or after 6 April 2020 as the maximum amount for a week’s pay (used to calculate statutory redundancy payments) will increase to £538 per week (from £525 per week).

The maximum compensatory award for unfair dismissal increases to £88,519 (from £86,444) where the effective date of termination is on or after 6 April 2020.


Update posted 26 February 2020 

New immigration system

The government has published its plans for the new points-based immigration system which will apply from 1 January 2021 to both EU and non-EU migrant workers.

Under the new system, all would be Tier Two (General) migrants must speak English and will need an offer from an approved sponsor, for a role at the required skill level (i.e. a role requiring qualifications equivalent to A levels) and at the required salary.

The minimum salary threshold will be set at £25,600 (with no regional variation across the UK). However, in certain circumstances, the minimum salary threshold will be reduced to £20,480. There will be no need to advertise a role and there will be no cap on Tier Two work visas.

Confidentiality and NDAs

Acas has published new guidance on non-disclosure agreements (NDAs). This is the latest in a series of developments and, although the guidance does not have the same force as a statutory code of practice, it may be used as evidence in legal proceedings.

 

The Acas guidance discourages the routine use of NDAs. It also states that a worker should be given reasonable time to carefully consider the agreement and makes it clear that NDAs should not be used to stop someone from:

  • reporting discrimination or sexual harassment at work or to the police
  • disclosing a future act of discrimination or harassment
  • whistleblowing

Although we are still awaiting details of the government’s proposed legislation on confidentiality clauses, employers should familiarise themselves with the guidance and review confidentiality provisions in contracts and settlement agreements.

Shared parental pay

The Supreme Court has refused Mr Hextall permission to appeal the decision of the Court of Appeal that it was not direct or indirect discrimination, nor a breach of the equal pay sex equality clause, for him not to be paid enhanced shared parental pay of an amount equivalent to the enhanced maternity pay available to female employees.

This means that the decision of the Court of Appeal in this case is binding. Therefore, it is not discriminatory to pay men on shared parental leave less than the enhanced rate of maternity pay that is paid to women on maternity leave.

(Hextall v Chief Constable of Leicestershire Police)


Future of UK immigration

The Migration Advisory Committee (MAC) has published its long-awaited report in which it makes various recommendations on the future of the UK immigration system after Brexit.

The new immigration system is expected to come into effect on 1 January 2021 and, although it remains to be seen how the government responds to the MAC report, employers should consider reviewing their resourcing arrangements well before then. This is particularly important for those employers who are dependent on low skilled workers from the EU, given the MAC’s recommendations that only medium-skilled, and not low-skilled workers, should be eligible to apply for a Tier 2 work visa.

Disability discrimination

The EAT has held that in a disability discrimination claim, an employee cannot rely on acts that occur before they have satisfied the definition of disability.

In this case, the employment judge had decided that the employee’s depression amounted to a disability as it had a substantial and long term adverse effect that had lasted for more than 12 months. However, the EAT held that she could only bring a claim based on acts that occurred after this 12 month period had elapsed in order for her to be classed as disabled at the date the act occurred. Before then, the effect had not lasted for 12 months and there was no evidence of a prognosis was that it was likely to last for more than 12 months.

(Tesco Stores Limited v Tennant)

Legal advice privilege

The Court of Appeal has held that legal advice privilege requires the party claiming the privilege to show that the relevant document or communication was created or sent for the dominant purpose of obtaining legal advice. This allows in-house lawyers some opportunity to provide strategic and/or commercial advice at the same time provided that the dominant purpose is still to provide legal advice.

The Court of Appeal also provided some guidance on the application of legal advice privilege to emails sent to multiple recipients simultaneously for their comments, including a lawyer. If the email is sent in order to circulate a draft and collect information, to obtain comments before instructing a lawyer or to get a commercial view, it will not be privileged, even if an in-house lawyer is copied in to the email.

In order to maximise the chance of internal communications attracting legal advice privilege, employers should have in place procedures to ensure commercial and legal emails are kept separate and staff are aware that they should avoid where possible copying emails to multiple recipients (mixing lawyers and non-lawyers).

(Civil Aviation Authority v R (on the application of Jet2.com Ltd))

Parental bereavement leave

The Parental Bereavement Leave Regulations 2020 and the Statutory Parental Bereavement Pay (General) Regulations 2020 are due to come into force on 6 April 2020.

Under the legislation, employed parents will be entitled to a statutory minimum of twommissioner was in breach of an implied duty owed to the officers to protect them from economic or reputational harm. The Supreme Court said it would not be fair, just and reasonable to impose such a duty.

Read article: Police commissioner owed no duty of care to officers when conducting litigation

Sexual harassment

The Women and Equalities Commission has produced its report on Sexual Harassment in the Workplace. Its recommendations include:

  • a mandatory duty on employers to protect employees from sexual harassment in the workplace
  • a duty for public sector employers to conduct risk assessments for sexual harassment and then mitigate risks
  • reintroducing employer liability for third party harassment
  • extending sexual harassment protection to interns and volunteers
  • extending the time limit for bringing a claim to 6 months
  • enabling tribunals to award punitive damages
  • limiting the use of confidentiality clauses in settlement agreements to government approved standard clauses.

It is now up to the government to consider these recommendations and decide which, if any, to implement.

Caste discrimination

The government has decided not to add ‘caste’ as a protected characteristic under the Equality Act 2010.

The government expects that emerging caselaw, such as Chandok v Tirkey in which the EAT held that caste could be protected under the Equality Act 2010 to the extent that it is bound up with ethnic origin, will continue to provide some measure of protection against caste discrimination.

Philosophical belief discrimination

Gray v Mulberry

Case: The EAT has held that a belief in the sanc20area open to the public, the ECtHR held that this did not exceed what was necessary. The employer’s reasonable suspicion of serious misconduct by employees in a concerted action over a number of months and the extent of the losses could also be a justification for the monitoring.

(López Ribalda and others v Spain)

Legal advice privilege

The Court of Appeal has held that legally privileged emails and gossip which the Claimant had overheard in a bar could not be used to support his discrimination and victimisation claims.

(R (on the application of the Independent Workers Union of Great Britain) v Central Arbitration Committee)

Disability discrimination

The Supreme Court has held that an ill-health early retirement pension awarded to a disabled employee, based on the part-time salary that he was earning before he retired, was not unfavourable treatment for the purposes of a disability discrimination claim.

The Supreme Court agreed with the Court of Appeal and held there was nothing intrinsically unfavourable or disadvantageous about the award of a pension, to which the employee was only entitled because of his disability. Although the employ0sector off-payroll working rules will be extended to the private sector from 6 April 2020. Private sector businesses who use contractors should review how these changes will impact them and plan accordingly.

The Chancellor also announced that the introduction of Class 1A National Insurance contributions on termination payments over £30,000 has been delayed until April 2020.


Company liable for data breach

(WM Morrison Supermarkets plc v Various Claimants)

The Court of Appeal has upheld the decision of the High Court that Morrisons was vicariously liable for the actions of a disgruntled employee who posted the payroll details of around 100,000 employees online.

The Court held that there was a sufficient connection between the employee’s actions and his employment to make Morrisons vicariously liable. He had received the data in the course of his employment as a senior IT internal auditor and had been asked to send it to the company’s external auditor. The fact that he had copied it and disclosed it in an unauthorised way was closely connected to what he had been asked to do and his motive was irrelevant.

Morrisons have been granted permission to appeal to the Supreme Court.

Company liable for assault

(Bellman v Northampton Recruitment Limited)

In another vicarious liability case, the Court of Appeal has overturn20of Appeal has held that it was direct disability discrimination to refuse a police officer’s request to transfer to a new role because of a perceived disability.

In this case the Claimant had some hearing loss but this did not have an adverse effect on her ability to carry out her duties. However, when she applied to transfer to a new role, her request was refused on the stereotypical and mistaken assumption about the effects of what was perceived to be a progressive condition which would mean that she would not be able to carry out her front-line duties in the future. This amounted to direct disability discrimination even though she was not currently disabled.

(Chief Constable of Norfolk v Coffey)

Off-payroll working

If you are an organisation which engages contractors, o be considered "in the course of employment" to render the employer vicariously liable.

Whistleblowing – non-executive directors liable

(Timis and anor v Osipov)

The Court of Appeal has held that an employee may make a whistleblowing detriment claim against individual workers for their conduct in relation to his dismissal after he made protected disclosures.

In this case, the CEO made protected disclosure and was then dismissed on the instruction of two non-executive directors. The CEO was found to have been unfairly dismissed but, as the employer was insolvent, the CEO sought to claim against the directors personally. The Court held that the non-executive directors were jointly and severally liable with the employer to compensate the CEO for the losses he suffered from his dismissal as a result of the detriment to which they subjected him.


Sexual orientation discrimination

(Lee v Ashers Baking Company Ltd and others)

As widely reported, the Supreme Court held on Wednesday that a bakery did not discriminate against a gay man when it refused, on the grounds of the owners’ religious beliefs, to bake a cake with a photo of Bert and Ernie from Sesame Street and the wording 'Support Gay Marriage'.

Mr Lee had previously been successful in his claim in the Northern Irish courts for direct discrimination on the grounds of sexual orientation and political beliefs. However, this decision now overturns the previous decisions.

The Supreme Court noted that the bakery had not refused to fulfil the order because of any personal characteristics of Mr Lee or of anyone with whom he was associated; they refused because they objected to the message on the cake.

The Supreme Court also considered the freedoms relating to religion and expression protected under Articles 9 and 10 of the European Convention on Human Rights. Those freedoms include a right not to be obliged to manifest a belief which you do not hold and the Court held that an infringement of those rights could not be justified by an obligation to supply a cake iced with a message with which the bakers profoundly disagreed.

Ethnicity pay reporting

The government has begun consultation on the introduction of mandatory ethnicity pay gap reporting for large employers and has asked for views on what ethnicity pay information should be reported in order to drive change without causing undue burdens on businesses. The consultation closes on 11 January 2019.

Alongside this consultation, the Prime Minister has also announced a Race at Work Charter, which has been designed with Business in the Community, and commits those businesses that sign up to the Charter to drive forward changes to increase the recruitment and progression of ethnic minority employees.

Tips, parental leave and flexible working

The government has announced new measures to support workers, businesses and entrepreneurs. These include plans to:

  • prevent employers keeping tips intended to go to workers and to ensure tips left for workers go to them in full. Details will be set out in new legislation but as yet we do not have details o the proposed timeframe for implementation
  • consult on requiring employers with more than 250 staff to publish their parental leave and pay policies
  • create a duty on employers to consider whether a role may be done flexibly and to make that clear when advertising the role.

Immigration

Following the recent publication of the final report on EEA migration in the UK by the Migration Advisory Committee (MAC), the government has announced more details of its skills-based immigration plans after Brexit and promised to publish a White Paper setting out the details in the autumn.

In the interim period, the EU settlement scheme is intended to apply to EU citizens resident in the UK before 31 December 2020 (and their family members), provided they apply for settled status before 20 June 2021.

Employers will need to evaluate the impact of new travel and work restrictions on their workforce after Brexit and ensure that any necessary applications for settled status are made within the deadline.

For more information, please read our article on the EU Settlement Scheme


Update posted 8 October 2018

Companions

(Talon Engineering Ltd v Smith)

The EAT has held that an employer acted unreasonably by refusing to postpone a rescheduled disciplinary hearing by 10 days so that the employee’s chosen trade union representative could attend.

This refusal to postpone for a short time rendered the subsequent dismissal procedurally unfair even though it was not in breach of the right to be accompanied provisions in s10 Employment Relations Act 1999 (which only require an employer to agree to a request to postpone a hearing if the suggested rescheduled date is within five working days of the original date).

This does not mean that an employer should always agree to a postponement in such circumstances but it is important to note that an employer’s overriding obligation is to act reasonably and this may involve a degree of flexibility in the process.

Corporate governance

The FRC has published the new 2018 UK Corporate Governance Code, which will apply to all premium listed companies for accounting periods beginning on or after 1 January 2019.

The key employment related changes include requirements for:

  • a board-monitored whistleblowing mechanism
  • a mechanism for workforce engagement
  • additional diversity reporting, covering senior managers
  • greater focus on gender, social and ethnic diversity in succession planning for both the board and senior managers
  • additional executive remuneration reporting.

Employment tribunal statistics

Parents with at least 26 weeks’ continuous service with their employer and weekly average earnings over the lower earnings limit will also be entitled to Statutory Parental Bereavement Pay (SPBP), paid at the statutory rate of £151.20 per week (from April 2020), or 90% of average weekly earnings where this is lower. SPBP will be administered by employers in the same way as existing family-related statutory payments.

 


Update posted 20 January 2020

Sexual harrassment

The Equality and Human Rights Commission (EHRC) has published new guidance for employers on sexual harassment and other forms of harassment at work which sets out best practice and gives practical examples on how to tackle and respond effectively to harassment. Although the guidance does not have the same force as a statutory code of practice, it may be used as evidence in legal proceedings.

See EHRC guidance, here.

IR35

The government has announced a review into the implementation of the changes to the off-payroll working rules which are due to come into force on 6 April 2020. The review will conclude in mid-February and is intended to address concerns from businesses in order to ensure a smooth implementation rather than review whether the reforms should go ahead.

For more information about the changes to the off-payroll working rules please see our briefing.

Age discrimination

An employment tribunal has held that the dismissal of a University professor under an Employer Justified Retirement Age policy at age 69 was unfair and unlawful age discrimination.

The University claimed that the policy was a proportionate means of achieving the legitimate aim of creating opportunities for younger and more diverse staff. However, whilst the University was successful in showing the policy was justified in a different case before a different tribunal panel earlier this year, the statistical evidence provided by the Claimant in this case indicated the policy had only created a small number of vacancies. The tribunal held that the University had not shown the policy contributed to the achievement of the legitimate aims to a sufficient extent to justify the discriminatory effect.

(Ewart v The Chancellor, Master and Scholars of the University of Oxford)

Philosophical belief - veganism

In contrast to a recent case relating to vegetarianism, an employment tribunal has held at a preliminary hearing that ethical veganism can amount to a philosophical belief that is capable of protection under the Equality Act 2010. The tribunal held that the beliefs were genuinely held by the Claimant in this case and met the necessary criteria:

  • it related to a weighty and substantial aspect of human life and behaviour.
  • it attained the required level of cogency, seriousness, cohesion and importance.
  • it was worthy of respect in a democratic society, not incompatible with human dignity and it did not conflict with the fundamental rights of others.

The case will now proceed to a full hearing to decide whether the Claimant was discriminated against because of his beliefs.

(Casamitjana v League Against Cruel Sports)

New statutory rates

The government have published the proposed new rates for statutory maternity pay (SMP), adoption pay (SAP) and paternity pay (SPP) and shared parental pay (ShPP).

SMP, SAP, SPP and ShPP are all expected to increase from £148.68 to £151.20 from 5 April 2020.

The rate of statutory sick pay is also proposed to increase from £94.25 to £95.85 on 6 April 2020.

The National Living Wage for workers aged 25 and over will increase from £8.21 per hour to £8.72 per hour from 1 April 2020. The National Minimum Wage rates will also increase from 1 April 2020:

  • from £7.70 to £8.20 for 21 to 24 year olds
  • from £6.15 to £6.45 for 18 to 20 year olds
  • from £4.35 to £4.55 for 16 and 17 year olds
  • from £3.90 to £4.15 for apprentices

Whistleblowing

The Supreme Court has held that it was automatically unfair to dismiss an employee where the person who took the decision to dismiss was not aware that the employee had made protected disclosures and had been misled by the employee’s line manager, who knew of the disclosure and had engineered a dismissal for poor performance.

The Supreme Court agreed with the EAT and overturned the decision of the Court of Appeal, summarising the position by stating “if a person in the hierarchy of responsibility above the employee determines that she (or he) should be dismissed for a reason but hides it behind an invented reason which the decision-maker adopts, the reason for the dismissal is the hidden reason rather than the invented reason.”

(Royal Mail Group Limited v Jhuti) 

Investigations

The EAT has held that the motivation of a senior manager, who was prejudiced against the Claimant because of his trade union activities, could be attributed to the employer even though he did not take the decision to dismiss.

In this case, the senior manager had manipulated the investigation to drive it towards dismissal, by withholding information, amending the terms of reference and making unnecessary and unexplained references to the Claimant’s trade union activities.

The EAT held that the investigation was inadequate and the dismissal was automatically unfair. Although the tribunal had found that the managers who conducted the disciplinary and appeal hearings were not motivated by prejudice towards the Claimant because of his trade union activities, this did not mean that it did not play a part in their decision to dismiss.

(Cadent Gas Limited v Singh)

TUPE and workers

An employment tribunal has held that TUPE applies to workers as well as employees. This is because the definition of employee under TUPE is “an individual who works for another person whether under a contract of service or apprenticeship or otherwise" and the tribunal concluded that the use of the term 'or otherwise' should include limb (b) workers as well as traditional employees.

Although it is only an employment tribunal decision, which is not binding on other tribunals and is likely to be appealed, employers may want to bear in mind the potential impact of the case and to consider workers when undertaking due diligence and complying with information and consultation requirements on a TUPE transfer.

(Dewhurst v Revisecatch Ltd t/a Ecourier and City Sprint (UK) Ltd)

Annual leave - carry over

The ECJ has confirmed that Member States are not obliged to allow annual leave in excess of the four weeks’ annual leave under the Working Time Directive (WTD) to be carried forward to the next leave year if it has been untaken due to sickness.

The ECJ held that the WTD does not preclude national rules or agreements which provide paid annual leave which exceeds the minimum period of four weeks. Any additional paid annual leave is ruled by national law, not the WTD, and, therefore, it is up to Members States to decide whether to allow or exclude the carry over of leave in circumstances where the worker has been unable to take the leave due to sickness.

Although the decision was in relation to two Finnish cases, it confirms the decision of the EAT in Sood Enterprises Ltd v Healy was correct and that the extra 1.6 weeks of leave granted by our national Working Time Regulations 1998 need not be carried forward, unless there is a contractual agreement to the contrary.

(TSN v Hyvinvointialan)


Update posted 14 November 2019

Confidentiality and NDAs

The government has published its response to the Women and Equalities Committee report on the use of non-disclosure agreements in discrimination cases. It restates a number of points set out in the government’s response to its consultation on the misuse of confidentiality clauses, including the proposed new legislation on the use of non-disclosure agreements.

The government also proposes to:

  • consult on whether to introduce a statutory obligation on employers to provide a basic factual reference
  • consider whether to require employers to investigate all discrimination and harassment complaints regardless of whether a settlement is reached
  • investigate the possible adverse effect on individuals of publishing employment tribunal judgments online.

Now that a general election has been called, it may still be some time before the proposals are implemented.

Click here to read the response.

Third-party harassment

The EAT has re-affirmed that an employer cannot be liable for failing to prevent third-party harassment of its employees in the workplace, unless the employer’s own conduct or inaction amounts to harassment relating to a protected characteristic.

The harassment complaint in this case was based on the employer’s failure to take steps to prevent an employee suffering racial abuse by a patient and its failure to ensure staff reported incidents of racial abuse. Although the employer was held not liable for the third-party harassment, the tribunal was critical of the employer’s failure to create a culture where all incidents of racist abuse were formally reported, the lack of feedback when a report was made and the lack of staff training to reinforce the message that such incidents were unacceptable.

(Bessong v Pennine Care NHS Foundation Trust)

However, the government is considering whether the third-party harassment provisions should be re-introduced into the Equality Act 2010 and its consultation closed on 2 October 2019, so we await the response.

Redundancy - trial periods

A recent decision of the EAT is a useful reminder of the importance of following the correct process in a redundancy situation when making an offer of suitable alternative employment which is subject to a statutory trial period.

In this case, the employee was informed that he was at risk of redundancy as his role was going to be deleted. He was offered a trial period in a different role but he did not regard this as suitable alternative employment and raised a grievance. When he was eventually dismissed, the employer refused to pay a redundancy payment to him on the basis that he had unreasonably refused an offer of suitable alternative employment and his right to reject the role during the statutory trial period had passed.

However, the EAT held that, as the employer had not issued notice to terminate his employment after he was put at risk of redundancy, the statutory trial period in the new role had not started. It will now be for the tribunal to decide whether his eventual dismissal was on the grounds of redundancy and whether he is entitled to a redundancy payment.

(East London NHS Foundation Trust v O’Connor)

Menopause guidance

Acas has published new guidance to help employers and managers support employees who are affected by menopause symptoms at work. Click here to read the guidance.

 


Update posted 25 October 2019

Covert recording

The Grand Chamber of the European Court of Human Rights (ECtHR) has held that it was not a breach of Article 6 (right to a fair trial) or Article 8 (right to respect for a private life) of the European Convention on Human Rights, to covertly record employees as part of an investigation into suspected theft and for the recording to be used at trial.

The ECtHR considered a number of factors regarding the proportionality of the video-surveillance, including whether the employees had been notified, the extent of the monitoring, the degree of intrusion and whether the employer had legitimate reasons. As the surveillance in this case was only for 10 days and limited to the checkout in an%timate place in employment contracts and settlement agreements, the government states that using these clauses to silence and intimidate victims of harassment and discrimination cannot be tolerated, and therefore itd that, when assessing whether workplace conduct amounts to harassment, it is appropriate to assess that conduct within the context in which it takes place.

In this case, the Claimant brought a harassment claim on the ground that he had been called a “fat ginger pikey”. He was diabetic and had strong links with the traveller community. The Employment Tribunal noted that the comment is potentially discriminatory but that the office culture in question was one of good natured jibing and teasing among competitive sales people and, at the time, the Claimant did not take the remark amiss. The EAT confirmed that the Employment Tribunal was entitled to make this finding.

Notably, the EAT stressed that harassment claims are highly fact sensitive and context specific. Employers should, therefore, remain wary of tolerating potentially discriminatory comments dressed up as workplace “banter”.

Autumn 2018 Budget

The key employment-related announcement in this Autumn’s Budget is that, as expected, the public%2September 2018

Victimisation

Saad v Southampton University Hospitals NHS Trust

Case: The EAT has held that an employee will be protected from victimisation if they wrongly but honestly believed the allegations they made to be true, even if they had an ulterior motive for making those allegations.

The claimant had made an allegation of racial or religious discrimination. The tribunal found that the allegation had been made in order to postpone an assessment of his skills and that the allegation itself was false, but because the claimant subjectively (albeit unreasonably) believed his allegation to be true, the tribunal concluded that it had not been made in bad faith. The claimant was therefore entitled to protection from victimisation.

Employment contracts and resignation

Brown & another v Neon Management & another

Case: The High Court has held that resignation on a lengthy notice period could constitute affirmation of an employment contract. The claimants in this case had resigned in response to breaches of their employment contracts, but did so on notice periods of six months and 12 months respectively.

The High Court found that it would be unconscionable to keep one’s right to discharge a repudiated contract for that length of time – in the face of a repudiatory breach of contract, the employee must not leave it too long before resigning. By resigning on such lengthy notice periods, the claimants in this case had affirmed their contracts.

Agency workers

Brooknight Guarding Ltd v Matei

Case: The EAT has held that an employee on a zero hours contract was an agency worker due to the temporary nature of his assignment.

Mr Matei was employed by the respondent on a zero hours contract and was assigned to work as a security guard for different clients, but mainly worked for one client. Mr Matei claimed he was an agency worker, but the respondent argued that he worked permanently for one client and was therefore not an agency worker.

The EAT said that the question of whether Mr Matei was an agency worker came down to whether he was working temporarily and concluded that he was – the position was not indefinite. Mr Matei was therefore an agency worker and entitled, after 12 weeks service, to the same terms and conditions as someone employed directly by the client.

Brexit update

The government has published a technical notice on workplace rights in the event of a no-deal Brexit. The notice states that there will be minimal change to UK legislation derived from EU law and existing employment rights would not be changed.

However, there may be changes in relation to employee rights on an employer’s insolvency and in respect of European Works Councils. In that regard, the notice recommends that:

  • UK and EU employees working in an EU country should make themselves aware of the relevant implementing legislation in that country to confirm whether they will still be protected in the event of their employer's insolvency under the national guarantee fund established in that country
  • UK businesses with EWCs may need to review those agreements in light of there no longer being reciprocal arrangements between the UK and the EU.

Update posted 20 August 2018

Employment status and personal service companies

Sprint Electric Ltd v Buyer’s Dream Ltd and another

Case: The High Court has expressed concern about the level of artificiality involved with the use of personal service companies for tax avoidance reasons in an employment context.

In this case neither party had questioned the status of their relationship, which was governed by a service company arrangement. However, the High Court said that where a court had concerns that labels chosen by the parties to apply to their relationship were untrue and had been applied as a tax avoidance scheme, it could and should consider the issue of its own motion.

The dispute in this case primarily concerned the ownership of intellectual property. The High Court determined that the relationship was really an employer-employee relationship, and decided the intellectual property dispute accordingly. The case illustrates that courts are prepared to challenge the use of personal service companies of their own volition and in wide-ranging contexts.

EU settlement scheme

The Home Office has published an employer toolkit  to help guide employers through the new EU settlement scheme.

The toolkit includes a briefing pack for communicating key facts to employees, a leaflet with important info for EU citizens in the UK, a leaflet with steps to apply for settled status, a leaflet with key terminology, and various posters with important dates, the benefits of applying and steps to apply.

Read article: Settled status: the Home Office announces further details of the EU Settlement Scheme

Gender pay gap reporting

The House of Commons’ BEIS Committee has published a report which includes a number of recommendations for strengthening gender pay gap reporting and closing the gender pay gap, including:

  • reporting obligations to extend to companies with 50 or more employees
  • reporting to include a narrative explanation for pay disparity and an action plan to tackle the gender pay gap
  • partner remuneration to be include in reported figures
  • salary quartiles to be replaced by deciles (to allow a more nuanced analysis)
  • further guidance to be provided to clarify areas of ambiguity (e.g. how bonus figures are calculated)
  • giving the EHRC specific enforcement powers to levy fines for non-compliance.

It is now up to the government to consider these recommendations and decide which, if any, to implement.

Meanwhile, the Government Equalities Office has also published guidance setting out recommendations on how employers can close the gender pay gap.

Enforcement of the Equality Act 2010

The Women and Equalities Committee has launched an inquiry into the enforcement of the Equality Act 2010.

Among other things, it has invited evidence on how easy it is for the public to understand and enforce their statutory rights, and whether enforcement of the Equality Act 2010 succeeds in securing change.


Update posted 02 August 2018

Implied term of trust and confidence

James-Bowen v Commissioner of Police of the Metropolis

Case: The Supreme Court has found that an employer does not owe a duty of care to conduct litigation in a manner which protects its employees from economic or reputational harm.

This case arose from the arrest of a suspected terrorist who made allegations of serious assault against the arresting officers and argued that the Commissioner of Police was vicariously liable for their actions. As part of a settlement, the Commissioner made an admission of liability and apologised for the officers’ actions.

The officers then claimed that, in entering such a settlement, the Cp>The latest quarterly statistics published by the Ministry of Justice for the period April to June 2018 show:

  • there has been an increase of 165% in the number of single employment tribunal claims lodged compared to the same period in 2017 (the last quarter when fees were in force)
  • there has been an increase of 344% in the number of multiple claims lodged compared to the same period in 2017.

Parental bereavement leave

The Parental Bereavement (Leave and Pay) Act 2018 has received Royal Assent and is expected to come into force in 2020.

The Act will give all employed parents who lose a child under the age of 18, or suffer a stillbirth from 24 weeks of pregnancy, a right to two weeks' leave and statutory parental bereavement pay, if they meet the eligibility criteria. Details of how and when the leave may be taken will be set out in regulations in due course.


Update posted 21 September 2018

Legal privilege

The Director of the SFO v Eurasian Natural Resources Corporation Limited

Case: The Court of Appeal has held that documents, prepared during the course of an internal investigation by lawyers and a firm of forensic accountants, for the purpose of resisting or avoiding contemplated legal proceedings or criminal prosecution, were protected by litigation privilege.

This important decision overturns the previous High Court decision and will be welcome news for any organisation faced with conducting an internal investigation into allegations of wrongdoing but it will be important to note that the application of legal privilege is fact-sensitive and will depend on the circumstances of each case. For more details see our briefing.

TUPE transfers

HMRC has changed its enforcement of national minimum wage (NMW) liabilities where there has been a TUPE transfer. With effect from 2 July 2018, all NMW liabilities will be enforced against the transferee employer. Penalties triggered by arrears that accrued before employees transferred under TUPE will also be enforced against the transferee rather than against the transferor (as was previously the case).

Calculating the correct NMW is notoriously difficult and the penalties for getting it wrong can be substantial (currently 200% of the total NMW underpayment, with an overall maximum penalty of £20,000 per underpaid worker), so organisations taking on employees under TU/p>

The emails contained legal advice about whether the Claimant, who had an existing disability discrimination claim against his employer, could be dismissed on the grounds of redundancy during a planned reorganisation. The emails were legally privileged and, although privilege can be lost if there is an iniquitous purpose, the Court of Appeal did not agree with the EAT that it was advice to act in an underhand or iniquitous way by 'cloaking' a discriminatory dismissal as redundancy. It was the sort of advice which employment lawyers give 'day in, day out' about the risks involved where an employer wanted to consider an underperforming employee for redundancy.

(Curless v Shell International Limited)

Religious and philosophical beliefs

The belief in the right to own the copyright of your own creative work has been held not to be a philosophical belief protected by the Equality Act 2010.

The Claimant’s refusal to sign a Copyright Agreement, which assigned to her employer the copyright in any work she created during the period she was employed, led to her subsequent dismissal when no resolution could be reached. Although the Claimant claimed this was discrimination on the grounds of her belief in the right to own the copyright of your own creative work, the Court of Appeal held that this dispute about the wording and interpretation of an agreement could not be a philosophical belief.

(Gray v MulberryCompany (Design) Ltd)

Confidentiality and NDAs

The Equality and Human Rights Commission has published guidance for employers on the use of confidentiality agreements in discrimination cases. The guidance sets out best practice and, although it does not have the same force as a statutory code of practice, it may be used as evidence in legal proceedings.

The guidance states that a confidentiality agreement should spell out the details of what information is confidential and it should not be used to stop employees from whistleblowing, reporting criminal activity or disclosing other information as required by law. It should also not prevent a worker from discussing a discriminatory incident unless, for example, the victim has requested confidentiality around their discriminatory experience.

Workers should be given time to read and fully understand the terms of a confidentiality agreement and be given a copy. Employers are also encouraged to monitor the use of confidentiality agreements in their organisation.

 


Update posted 11 October 2019

Religious discrimination

An employment tribunal has held that a Christian doctor, who claimed that he was unfairly dismissed for refusing to address transgender individuals by their preferred pronoun, was not discriminated against on the grounds of his religious beliefs.

The tribunal found that the doctor’s particular views were incompatible with human dignity and conflicted with the fundamental rights of others so they were not protected religious or philosophical beliefs under the Equality Act 2010.

(Mackereth v The Department for Work and Pensions and another)

Investigations

The EAT has held that the removal of evaluative conclusions from a draft investigation report did not make the dismissal procedurally unfair.

The draft investigation report had been amended following advice from the employer’s in-house solicitor that it should not set out evaluative conclusions as those judgments should properly be left to the disciplinary panel. There was no suggestion that any evidential material had been withheld from the disciplinary panel and submissions about the changes in the report were considered during the appeal hearing.

This case is a useful reminder that the role of an investigator is to decide whether there is a prima facie case to answer and it is then for the disciplinary panel to make their own evaluations.

(Dronsfield v The University of Reading)

IR35

The First-tier Tribunal (Tax) has held that IR35 applied to the successive contracts of three news presenters working for the BBC.

The tribunal held that there was mutuality of obligation because the BBC was obliged to provide and pay for a minimum number of days' work and the presenters were obliged to be available on a 'first-call basis'. There was no meaningful right of substitution in the contracts and the BBC exercised a degree of control consistent with employment as it determined the place of work and the presenters were obliged to attend meetings, training and appraisals and adhere to the BBC’s editorial guidelines. The presenters were also subject to restrictions on outside activities, including working for others.

(Paya Limited and others v HMRC)

Changes to IR35 in the private sector are due to come into force in April 2020.

Adrian Martin shares his top five tips to help you prepare in the video here.

Inclusive workspaces

The CIPD has published a report on Building Inclusive Workspaces which sets out some of the key actions employers can take to enhance workplace inclusion.

 


Update posted 26 September 2019 

Is vegetarianism a philosophical belief?

An employment tribunal has held at a preliminary hearing that vegetarianism is not a philosophical belief that is capable of protection under the Equality Act 2010. The tribunal held it did not meet the necessary criteria because:

  • it did not relate to a weighty and substantial aspect of human life and behaviour. The tribunal’s view was that it was a lifestyle choice.
  • it did not attain the required level of cogency, seriousness, cohesion and importance. There were numerous, differing reasons for being vegetarian and the tribunal contrasted this with veganism where the reasons for adopting veganism are largely the same and there was a clear cogency and cohesion in the belief.
  • it did not have a similar status and cogency to religious beliefs.

(Conisbee v Crossley Farms Limited)

Rest breaks and detriment

The EAT has held that it was an unlawful detriment for an employer to threaten a worker with dismissal for refusing to work at a client’s premises because on a previous occasion the client had not allowed him to take a rest break as required by the Working Time Regulations.

In addition to the right to specified rest breaks, workers are protected against suffering a detriment on the grounds that they refuse to comply with a requirement in breach of the Working Time Regulations or allege that the employer had infringed their rights.

This case serves as a useful reminder of workers’ rights and the fact that they apply even if the worker is working at another premises.

(Pazur v Lexington Catering Services Ltd)

Sexual harassment

The EAT has held that, when a female manager briefly massaged the shoulders of a male colleague whilst he was sitting at his desk in an open-plan office, it did not amount to sexual harassment. There was no evidence that the conduct was related to sex and, although the conduct was unwanted, it was a one off isolated incident which the tribunal held to be a misguided attempt at encouragement.

Although the conduct did not amount to sexual harassment on the facts of this case, it highlights the need for employers to have a clear policy and training for employees and managers setting out what is and is not acceptable conduct in the workplace.

(Raj v Capita Business Services Limited)

Health at work

Senior Associate Annelise Tracy Phillips writes for People Management on the government’s plans for health at work and the latest consultation on how employers can better support employees experiencing long-term ill-health.


Updated posted 05 September 2019

Holiday pay

The Court of Appeal has held that permanent workers on a part-year contract, for example term-time only, should not have their 5.6 weeks’ statutory holiday entitlement under the Working Time Regulations pro-rated to reflect the fact that they do not work for the full year.

Legislation requires a worker’s holiday pay to be calculated as a week's pay for each week of leave and, if a worker does not have normal working hours, a week's pay is taken to be the worker's average weekly pay in the 12 weeks before the calculation date (which is the first day of the relevant period of leave excluding any weeks in which no remuneration was payable). This reference period is due to be increased to 52 weeks with effect from 6 April 2020.

The government has now updated its guidance for employers and employers who have been using 12.07% of earnings as a basis for the calculation of holiday pay for casual workers may want to carry out a review of this and obtain further advice.

(The Harpur Trust v Brazel)

Data subject access requests

The Information Commissioner's Office (ICO) has updated its guidance on timescales for responding to data subject individual rights requests. The guidance makes clear that, when calculating the one-month period for response, the day of receipt is day one rather than the day after receipt.

Employers should have in place procedures to ensure requests are dealt with appropriately and that those responsible for dealing with requests are aware of the time limit (although the time limit may be extended by a further two months in certain circumstances where the requests are numerous and/or complex).

Read the ICO guidance

Guidance for Sponsors

The Home Office has recently updated its document retention requirements for Sponsors.

One significant change is that employers must now keep evidence of a migrant’s date of entry to the UK. In most cases, employers can check the date of entry by looking for an entry stamp from an immigration officer on the migrant’s passport/visa. For those who may not have an entry stamp (e.g. those who can use an automated ePassport gate), employers must ask for other evidence including travel tickets or a boarding pass and they must then make a record of the date that the migrant entered the UK.

Read the new guidance for Sponsors


Updated posted 25 July 2019

NDAs and confidentiality clauses

The government has published a response to its consultation on confidentiality clauses: measures to prevent misuse in situations of workplace harassment or discrimination.

Whilst acknowledging that confidentiality clauses have a legitity of copyright law was not sufficiently cogent to qualify as a protected belief under the Equality Act 2010.

Even if it was a protected belief, the EAT held that an indirect discrimination claim could not succeed since the claimant was the only person known to hold such a belief. As a result there could be no ‘group disadvantage’, which is required for a successful indirect discrimination claim.


Update posted 23 July 2018

Holiday pay and voluntary overtime

Flowers and others v East of England Ambulance Trust

Case: Following its earlier decision in Dudley Metropolitan Borough Council v Willetts, the EAT has confirmed that voluntary overtime can qualify as “normal remuneration” for the purposes of calculating holiday pay under the Working Time Directive, if it is paid over a sufficient period of time on a regular basis.

In this case, the EAT also held that a clause in the NHS Terms and Conditions of Service, which stipulates that holiday pay is calculated on the basis of what an employee would have received had he/she been at work, gives the employees a contractual entitlement to have non-guaranteed and voluntary overtime included in the calculation of holiday pay.

Brexit update

The government has published its White Paper "The Future Relationship between the United Kingdom and the European Union" (PDF), in which it proposes that there be no regression in employment laws.

This would mean that EU based laws (such as TUPE, the Working Time Regulations and collective consultation requirements) would not be repealed. However, the eventual outcome remains subject to the terms of any Brexit deal reached with the EU.

Discrimination arising from disability

Ali v Torrosian and others t/a Bedford Hill Family Practice

Case: The EAT has provided a reminder that employers should always ensure that there is not a less discriminatory way of achieving a legitimate aim before taking action such as dismissal.

In this case, for example, the employer should have considered whether its aims could have been achieved by permitting Dr Ali – who had been absent on long-term sick leave following a heart attack – to return to work on a part time basis.

Minimum wage for on-call carers

MenCap v Tomlinson-Blake

Case: The Court of Appeal has held that carers who are required to sleep-in at work are not entitled to the national minimum wage while they are asleep.

Overturning the previous EAT decision, the Court of Appeal held that only time spent awake and working should be included in the calculation of national minimum wage entitlements, even if facilities for sleeping are provided by the employer.

 


 Update posted 16 May 2018

Knowledge of disability

The EAT has held that, in relation to a claim of discrimination arising from disability relating to dismissal, it was necessary to consider whether an employer had actual or constructive knowledge of an employee’s disability at the time of the appeal against dismissal, not just at the time the decision was taken to dismiss.

In this case, the employee was dismissed at the end of her six-month probation period as a result of a number of concerns about her performance, including her communication style. When she appealed against her dismissal she mentioned that she suffered from depression and that this sometimes caused her to behave unusually and had an effect on her short-term memory. The EAT held that the appeal decision may have been discriminatory as the employer had by then acquired actual or constructive knowledge of the employee’s disability and the performance issues may have arisen in consequence of the employee’s disability.

Employers should note that an appeal against a dismissal forms part of the dismissal process and any new information that comes to light at the appeal stage should be taken into account in deciding whether or not to reject an employee’s appeal.

(Baldeh v Churches Housing Association of Dudley and District Ltd)

Recording working time

The ECJ has held that the Working Time Directive requires employers to set up a system which records the actual number of hours worked by workers each day in order to ensure the limits set out in the Directive (in relation to maximum weekly working time, rest breaks, daily and weekly rest periods etc) are actually observed and that workers are able to exercise their rights.

Currently under the Working Time Regulations (WTR) employers in the UK are obliged to keep records for two years that are adequate to show that the statutory limits are not being exceeded, for example, to show a worker’s working time does not exceed 48 hours per week on average (unless the worker has opted out).

This decision casts doubt on whether the WTR properly implement the Directive and employers may be required to set up a system to more closely monitor their workers in order to keep more detailed records of their working time.

(Federación de Servicios de Comisiones Obreras v Deutsche Bank SAE)

Unfair dismissal and religion

The Court of Appeal has held that a nurse was not unfairly dismissed for gross misconduct when she disobeyed a management instruction to refrain from initiating conversations with patients about religion.

The Claimant did not claim that she had been discriminated on the grounds of the religion but in her appeal she argued that, when assessing the fairness of the dismissal, the employment tribunal had not taken account of her right to manifest her religion under Article 9 of the European Convention of Human Rights.

The Court of Appeal dismissed her appeal on the basis that the employer had carried out the disciplinary process fairly, she had failed to comply with a lawful management instruction and she had acted inappropriately by initiating unwanted discussions about religion with patients. It was the improper manifestation of her beliefs that led to her dismissal.

(Kuteh v Dartford and Gravesham NHS Trust)

Racial harassment

An employment tribunal has held than an employee was subjected to racial harassment at an equality, diversity and inclusion training exercise in which participants were encouraged to shout out offensive words.

The tribunal accepted that the purpose of the training was appropriate and that the employer had taken protective measures to try and ensure the training was carried out sensitively. However, in the circumstances the method of delivery was highly risky and it was entirely reasonable for the claimant to be offended by the encouragement of the use of a 'deeply loaded and offensive word with distressing racial connotations'.

(Georges v Pobl Group Ltd)


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