This month’s case law shines a light on a less-common area of worker status – where a partnership is providing a service to a company and how to ensure no employee relationship is found, and provides a useful insight into using comparators for discrimination claims.
This month’s news provides an update on the effect of the Retained EU Law Bill and the scrapping of the sunset clause, a new smart regulation from the DBT, a report on the post-pandemic economic growth in the UK labour markets, new guidance from ACAS on both managing stress at work and making reasonable adjustments for mental health at work, a new podcast from the HSE to support disabled people in the workplace and a consultation from the EBA on the benchmarking of diversity practices. Lastly, we have the results of research carried out on unfair treatment of parents following fertility treatment.
- Brexit: Government scraps the proposed sunset clause from the Retained EU Law Bill and Minister confirms effect of the Bill on equality and employment rights
- Employment Law: Department for Business and Trade – Smart regulation unveiled to cut red tape and grow the economy
- Flexible Working: House of Commons Committee report on post-pandemic economic growth in UK labour markets
- Health at Work: ACAS publishes new guidance on managing stress at work and making reasonable adjustments for mental health at work
- Disability: HSE launches podcast to support disabled people in the workplace
- Diversity: EBA publishes consultation on guidance on benchmarking of diversity practices
- Sex Discrimination: Research reveals unfair treatment at work after fertility treatment
Brexit: Government scraps the proposed sunset clause from the Retained EU Law Bill and Minister confirms effect of the Bill on equality and employment rights
On 10 May 2023, the government announced that it will scrap the proposed sunset clause from the Retained EU Law (Revocation and Reform) Bill. As we have previously reported in our Employment Law News, the sunset clause would have meant that most retained EU law in secondary legislation would have been revoked at the end of 2023. Instead at least 600 pieces of retained EU law will be set out in a revocation schedule, which can be found here. Any laws not listed in the revocation schedule will be retained automatically.
Meanwhile, the Department for Business and Trade has published a response to a letter by the Rt Hon Caroline Nokes MP, Chair of the Women and Equalities Committee, requesting further explanation about the Retained EU Law Bill’s effect on equality rights and protections. The response by the Rt Hon Kemi Badenoch MP, Minister for Women & Equalities, confirms that the Retained EU Law Bill does not intend to undermine equality rights and protections, employment rights or maternity rights in the UK. It sets out that most equality protections will remain unaffected, as they are provided for in primary legislation, in particular the Equality Act 2010 (to which no changes are expected because of the Bill) and any relevant secondary legislation and additional instruments will be considered.
It also highlights that where additional provision is required, the Bill enables the UK Government and the devolved governments to protect the rights and protections of UK citizens. This includes a restatement power which allows departments to codify rights into domestic legislation. The response emphasises that this power will secure rights and protections, by laying them out accessibly and clearly in statute.
The response sets out that the government does not intend to amend workers’ legal rights through the Bill, that the UK provides for greater protections for workers than are required by EU law and that the government remains committed to making sure that workers are properly protected in the workplace.
The response emphasises that the repeal of maternity rights is not and has never been government policy, and that the UK is in fact further along than the EU when it comes to maternity rights.
Employment Law: Government’s “Smart regulation unveiled to cut red tape and grow the economy”
On the 10 May 2023 the Department for Business and Trade published its paper “Smarter regulation unveiled to cut red tape and grow the economy” which the government describes as “the first dynamic package of deregulatory reforms to grow the economy, cut costs for businesses and support consumers …”
The governments announcements include the following proposed amendments to employment law:
- The government is proposing to remove retained EU case law that requires employers to record working hours for almost all.
- Making rolled-up holiday pay lawful. Rolled up holiday pay is where an employer includes a sum representing holiday pay in an enhanced hourly rate rather than continuing to pay workers as normal when they actually take leave. This was ruled to be in breach of the Working Time Directive by the ECJ well over a decade ago.
- The merger of annual leave (20 days derived from the EU’s Working Time Directive) and additional leave (being the additional 8 days holiday provided under the Working Time Regulations). Whilst this appears to be sensible it will be interesting to see how the European case law which specifically applies to the 20 days annual leave, such as what constitutes holiday pay and taking such holiday in the year in which it falls, is dealt with.
- TUPE – there are proposals to do away with the need for elections of employee representatives for businesses with fewer than 50 employees or transfers of fewer than 10 employees.
The government has launched consultation on these points.
The government has also proposed limiting the length of non-compete clauses to three months. This will require the passing of legislation, which, the government says will be dealt with when parliamentary time allows.
So we wait to see exactly what legislative changes come about following these announcements.
Flexible Working: House of Commons Committee report on post-pandemic economic growth in UK labour markets
A House of Commons Committee report says the government must reconsider the need for an Employment Bill in the upcoming King’s Speech to address gaps in employment protections. The government has two months to respond to the committee’s proposals which are on topics including the machinery of government with responsibility for labour market policy; technology and skills development; workers’ rights and protection; and older workers.
The report, which follows on from a Call for Evidence on the state of play in the UK Labour market post-Brexit and the COVID-19 pandemic, highlights that:
- with 500,000 people having left the British workforce since the start of the pandemic, a shortage of labour weighs heavily on the potential for economic growth;
- economic inactivity has risen among people aged 50 to 64 years;
- the way in which the recommendations of the Taylor Review have been implemented has been fragmented and drawn-out;
- the enforcement of labour market rules is under-resourced.
It calls on the government to:
- consider establishing a Ministry of Labour and appoint a new Minister of State for Labour in the Cabinet, as well as a Cabinet Committee on Labour;
- take various actions in respect of technology and skills;
- reconsider the need for an Employment Bill in the upcoming King’s Speech to address gaps in employment protections;
- consider new legal structures for flexible work that include appropriate rights and protections for workers;
- provide more protection for workers from any damaging effects of night-time working;
- pursue the creation of the planned single enforcement body which would clarify rights of redress for those most in need;
- continue and expand support for older workers.
It also calls on businesses to:
- be more open to create more flexible constructions of work;
- offer more flexible working opportunities to benefit from a huge untapped pool of older workers and to assess whether their recruitment practices and workplaces are ‘ageist’.
Health at Work: ACAS publishes new guidance on managing stress at work and making reasonable adjustments for mental health at work
Managing stress at work:
ACAS has published new advice for employers on managing stress at work after YouGov revealed 33% of British workers disagreed that their organisation was effective at managing work-related stress. YouGov was commissioned by ACAS and surveyed just over 1,000 employees in Great Britain. ACAS sets out that stress can be caused by demands of the job, relationships at work, poor working conditions and life events outside of work such as financial worries. An ACAS poll in March 2023 revealed that 63% of employees felt stressed due to the rising cost of living.
Advice for employers on managing stress at work include:
- looking out for any signs of stress among staff. Signs include poor concentration, tiredness, low mood and avoiding social events;
- being approachable available and have an informal chat with staff who are feeling stressed;
- respecting confidentiality and being sensitive and supportive when talking to staff about work-related stress;
- communicating any internal and external help available to staff such as financial advice if the cost of living is a cause of stress.
ACAS states that creating a positive work environment can make employees healthier and happier at work, reduce absence levels and improve performance.
ACAS advice on managing stress can be accessed here.
Making reasonable adjustments for mental health at work:
ACAS has published new guidance for employers and workers on reasonable adjustments for mental health. ACAS states that ‘employers should try to make reasonable adjustments even if the issue is not a disability’. The guidance covers:
- what reasonable adjustments for mental health are;
- examples of reasonable adjustments for mental health;
- what reasonable adjustments can be made for mental health;
- requesting reasonable adjustments for mental health;
- responding to reasonable adjustments for mental health requests;
- managing employees with reasonable adjustments for mental health;
- reviewing policies with mental health in mind.
ACAS has also published case studies exploring how different organisations have helped staff with reasonable adjustments for mental health.
Disability: HSE launches podcast to support disabled people in the workplace
The Health and Safety Executive (HSE) has launched a new podcast aiming to help employers support disabled workers and those with long-term health conditions in the workplace. The podcast features discussion by host Mick Ord, former BBC Radio journalist, Moya Woolley, Occupational Health Policy Team Leader at HSE and Rebecca Hyrslova, Policy Advisor at Federation of Small Businesses (FSB); and offers advice for employers on how to create a supportive and enabling workplace, take an inclusive approach to workplace health, understand the work barriers that impact on workers, make suitable workplace adjustments or modifications, develop skills, knowledge and understanding, use effective and accessible communication, and support sickness absence and return to work.
Diversity: EBA publishes consultation on guidance on benchmarking of diversity practices
The European Banking Authority (EBA) has launched a consultation on guidelines on the benchmarking of diversity practices including diversity policies and the gender pay gap pursuant to Articles 75(1) and 91(11) of the Capital Requirements Directive IV (Directive 2013/36/EU) (CRD IV) and Article 34(1) of the Investment Firms Directive (Directive (EU) 2019/2034). The EBA has been collecting data on diversity since 2015 based on information requests. The EBA hopes that the issuance of these guidelines will lead to a higher level of transparency regarding the EBA’s work on the topic of diversity and gender equality and will help improve the quality of the collected data as well as the awareness of all stakeholders on these topics. The new reporting format is expected to apply for the collection of data in 2025 for the financial year 2024. Responses are sought to the consultation by 24 July 2023.
Sex Discrimination: Research reveals unfair treatment at work after fertility treatment
Pregnant Then Screwed published a press release during Infertility Awareness Week revealing the unfair treatment women face in the workplace due to their reproductive health. Research has revealed that of the 43% of women who informed their employer of their fertility treatment, one in four did not receive any support from their employer. One in four women also experienced unfair treatment because of undergoing fertility treatment. Unfair treatment was also experienced by 22% of women who disclosed their pregnancy loss to their employer while 6% of partners who disclosed the same faced negative treatment.
The press release confirms Pregnant Then Screwed will be launching a new programme to help employers deal with reproductive health issues in the workplace better. They will be hosting a Women in the Workplace seminar for businesses to find out more about the new training and accreditation scheme which signals fertility friendly employers. This free event will take place in June 2023.
If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: firstname.lastname@example.org
We start off the new year with a Court of Appeal decision on whether a worker who declined to go back to work for fear of COVID-19 was unfairly dismissed or not, the first of its kind at this level. We also take a look at two discrimination cases, a Court of Justice of the European Union case about requirements on employers to provide ‘special corrective appliances’ (such as glasses), and a claim for misuse of private information concerning the reasonable expectation of privacy in private WhatsApp messages.
- COVID-19: First Court of Appeal decision on the application of ERA 1996, s.100(1)(d) to COVID-19 dismissals
- Discrimination: Whether PCP requiring disabled employee to work full-time had been applied, despite employer having part-time roles
- Discrimination: Narrow test for marital status discrimination confirmed
- Health & Safety at Work: Display screen equipment and the provision of spectacles by employers
- Data Protection: Misuse of private information and abuse of process
COVID-19: First Court of Appeal decision on the application of ERA 1996, s.100(1)(d) to COVID-19 dismissals
In Rodgers v Leeds Laser Cutting  EWCA Civ 1659, the claimant worked for the respondent as a laser operative in a large warehouse-type space about the size of half a football pitch in which usually only five people would be working. Following the first national ‘lockdown’ on 23 March 2020, the respondent told employees that the business would remain open, asked staff to work as normally as possible and stated ‘we are putting measures in place to allow us to work as normal’. Recommendations were made by an external risk assessment covering most of the things which were already in place before it was undertaken. The claimant left work as usual on 27 March 2020, having not made any complaint about his conditions at work. He obtained a self-isolation note until 3 April 2020 due to having a cough. On 29 March 2020, the claimant told his line manager he had to self-isolate because one child was high risk with sicklecell and a 7 month old baby. His manager agreed. Unfortunately, during this period he drove a friend who had broken his leg to hospital and at some point worked in a pub during the lockdown. On 24 April 2020 he found out he’d been dismissed and was sent his P45.
The claimant made a claim for unfair dismissal on the grounds of health and safety. Under the Employment Rights Act 1996 (ERA 1996), s.100(1)(d), any dismissal of an employee will be automatically unfair, if the reason (or, if more than one, the principal reason) for the dismissal is that, in circumstances of danger which the worker/employee reasonably believed to be serious and imminent and which they could not reasonably have been expected to avert, the employee:
- left or proposed to leave, or
- (while the danger persisted) refused to return to
their place of work or any dangerous part of their place of work. ‘Dangers’ in this context are not limited to dangers arising out of the workplace itself, but also cover dangers caused by the behaviour of fellow employees.
The questions that the employment tribunal has to decide in a case under ERA 1996, s.100(1)(d) are:
- Did the employee believe that there were circumstances of serious and imminent danger at the workplace? If so:
- Was that belief reasonable? If so:
- Could they reasonably have averted that danger? If not:
- Did they leave, or propose to leave or refuse to return to, the workplace, or the relevant part, because of the (perceived) serious and imminent danger? If so:
- Was that the reason (or principal reason) for the dismissal?
The tribunal rejected the claim for a number of reasons, including that his evidence was inconsistent, his beliefs of serious imminent danger were not supported by his actions (driving his friend to hospital and working in a pub) and not related to his workplace but to the world at large, he had made no complaint about his specific working conditions, and the measures put in place by the employer (if followed) would make the business as safe as possible from infection.
The claimant appealed, arguing that the tribunal had erred in law by concluding that because his belief was one of a serious and imminent danger at large (i.e. in the whole community), his belief that his workplace presented a serious and imminent danger was not objectively reasonable. The Court of Appeal, like the EAT before it, dismissed the appeal because the claimant’s case failed on its own facts. While the coronavirus pandemic could, in principle, give rise to circumstances of danger that an employee could reasonably believe to be serious and imminent, this was not the situation in this particular claimant’s case in respect of his workplace.
The Court of Appeal has confirmed that, on the particular facts of this case, where the employee refused to return to work during the coronavirus (COVID-19) pandemic in circumstances where the employer had put in place social distancing in the workplace and other measures like handwashing and face masks, the employment tribunal did not err in law in concluding that the claimant had not reasonably believed that there were circumstances of danger which were serious and imminent, or which could not be reasonably averted, and as result the dismissal was not automatically unfair under section 100(1)(d) of the Employment Rights Act 1996 (ERA 1996).
Guidance was given on the interpretation of ERA 1996, s 100(1)(d) including that:
- it is sufficient that the employee had a (reasonable) belief in the existence of the danger as well as in its seriousness and imminence. They do not also have to prove that objectively such circumstances of danger did in fact exist;
- the subsection does not apply where the perceived danger arose on the employee’s journey to work. The perceived danger must arise at the workplace. However it does not follow that the danger need be present only at the workplace;
- while the paradigm case under ERA 1996, s 100 (1)(d) is where a danger arises by reason of some problem with the premises or equipment, there is nothing about the risk of employees infecting each other with a disease that takes it outside the scope of the subsection: the tribunal will have to decide whether on the particular facts of each case it amounts to a serious and imminent danger.
While the outcome of this case ultimately turned on its own particular facts, the judgment is nonetheless of interest because it is the first appeal to reach the Court of Appeal on the application of ERA 1996, s 100(1) to dismissals related to the coronavirus (COVID-19) pandemic.
Discrimination: Whether PCP requiring disabled employee to work full-time had been applied, despite employer having part-time roles
In Davies v EE Ltd  EAT 191, the EAT considered what amounted to a provision, criterion or practice (PCP) for the purposes of a disability discrimination claim relating to an alleged failure to make reasonable adjustments.
The employee, who was employed full-time, relied on two PCPs, which she contended had left her at a substantial disadvantage: (i) a requirement for employees to complete a full-time working pattern of 40 hours per week, with each shift approximately 9½ hours in length, and (ii) a requirement for employees to complete the shifts without agreeing any reduction in hours. The employment tribunal held that because the respondent employed some employees on a part-time basis and had allowed the claimant a phased return to work, neither PCP had been made out on the facts.
The EAT held that the tribunal had erred in law in concluding that the fact that the employer had other staff who worked part-time had meant that a PCP of requiring the employee to work her contracted hours of 40 per week had not been applied to her. Also, the fact that a temporary adjustment had been made during the employee’s phased return to work did not mean that the PCP had ceased to exist.
Discrimination: Narrow test for marital status discrimination confirmed
In Ellis v Bacon  EAT 188, the EAT considered a matter of two married director/shareholders whose messy divorce impacted the divorcing wife’s income from the company. Another director, Mr Ellis, sided with the husband, Mr Bacon, in relation to the marital dispute and was compliant with him in removing the Mrs Bacon’s directorship, not paying her dividends, reporting her to the police and suspending and dismissing her on spurious grounds. The employment tribunal held that these actions involved less favourable treatment by Mr Ellis against Mrs Bacon because of her marital status as a wife to Mr Bacon. Mr Ellis appealed.
The EAT held that in a claim of direct discrimination because of the protected characteristic of marriage, the employment tribunal must consider whether it was the claimant’s marital status which was the cause of the less favourable treatment and not the fact that they were married to a particular person. Further, an appropriate hypothetical comparator is someone in a close relationship but not married, and the tribunal must consider whether such a person would have been treated differently.
A person directly discriminates against another person where they treat them less favourably than they treat or would treat others, and they do so because of a protected characteristic. Marriage and civil partnership are protected characteristics. A person has the protected characteristic of marriage if the person is married (which includes a person who is married to a person of the same sex); of civil partnership if the person is a civil partner. Note that people who are not married, or not civil partners, do not have this protected characteristic.
Cases on discrimination because of marriage are very rare. This judgment confirms that the test is to be narrowly construed, with the causative reason for the less favourable treatment being the marital status and not:
- the identity of the spouse, or
- the closeness of the relationship.
As a result, there seems very limited scope for claimants to bring successful claims in the context of modern society and the legal concept of protection on grounds of marital status looks increasingly like an outdated concept.
Health & Safety at Work: Display screen equipment and the provision of spectacles by employers
In TJ v Inspectoratul General pentru Imigrări, C-392/21, the Court of Justice of the European Union held that Article 9 of Council Directive 90/270/EEC, on the minimum safety and health requirements for work with display screen equipment, which is implemented in the UK by regulation 5 of the Health and Safety (Display Screen Equipment) Regulations 1992, must be interpreted as follows:
- there is no requirement for a causal link between display screen work and potential visual difficulties;
- ‘special corrective appliances’ include spectacles aimed specifically at the correction and prevention of visual difficulties relating to work involving display screen equipment;
- those ‘special corrective appliances’ are not limited to appliances used exclusively for professional purposes, i.e. they may be used at other times too; and
- the employer’s obligation to provide the workers concerned with a special corrective appliance may be met by the direct provision of the appliance to the worker by the employer or by reimbursement of the necessary expenses incurred by the worker, but not by the payment of a general salary supplement to the worker.
Data Protection: Misuse of private information and abuse of process
In FKJ v RVT  EWHC 3 (KB), which concerned a claim for misuse of private information, the court considered the extent to which there can be a reasonable expectation of privacy in private WhatsApp messages found at work, and how such material should be dealt with in the context of ongoing legal proceedings. FKJ brought a claim in the employment tribunal against her former employers on the grounds of sex discrimination, unfair dismissal and wrongful dismissal, amid allegations of sexual harassment by the first defendant, RVT. FKJ lost that employment tribunal claim, in large part due to evidence deployed by RVT which consisted of some 18,000 of FKJ’s private WhatsApp messages. Prior to that tribunal hearing, the defendants had come to be in possession of a complete log of messages exchanged between FKJ and both her partner and her best friend, some of which were ‘of the most intimate kind’. FKJ brought a claim for misuse of private information.
While there was some dispute over how RVT came to be in possession of these messages, spanning a period of two years, FKJ only became aware of them being in his possession when she received the defendants’ grounds of resistance in the employment tribunal proceedings. FKJ chose not to seek exclusion of those messages from evidence, or to seek aggravated damages as a result of RVT’s conduct. Instead, FKJ chose to pursue a claim for misuse of private information in the High Court.
RKJ brought a counter claim grounded in the common law torts of malicious prosecution and abuse of process, and harassment under the Protection from Harassment Act 1997. RVT also sought to strike out the claim and seek summary judgment on his counterclaim. As a fall back, the defendants sought payment of significant sums into court by FKJ as a condition of the proceedings continuing.
The court gave short shrift to the defendants’ applications, reaching the ‘clear conclusion that they are without merit’. Parts of the applications were ‘not worthy of serious consideration’ and appeared to be ‘an attempt to stifle a claim that the defendants would prefer not to contest on its merits’. Both the strike out and summary judgment applications were dismissed.
[Written by Charlotte Clayson, partner at Trowers & Hamlins LLP, for Lexis+.]
If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: email@example.com
This month our update covers a new online service to help employers support disabled employees, the CIPD has found gaps in support for employees experiencing pregnancy or baby loss, there’s new draft guidance from the ICO, an update on the future of the four-day week, frustration over the scrapping of the plans to abolish the changes to off-payroll working rules, new guidance on the Professional Qualifications Act 2022, and research into allyships for underrepresented groups.
- Disability: New online service to help employers support disabled employees
- Support & Leave: CIPD report reveals gaps in workplace support for employees experiencing pregnancy or baby loss
- Data Protection: ICO consults on monitoring at work draft guidance
- Working Practices: One third of employers expect a four-day week to be a reality within ten years
- IR35: Frustration from business groups over latest Chancellor’s backtracking over the repeal of the IR35 rules
- Brexit: Government publishes guidance for UK regulators on Professional Qualifications Act 2022
- Discrimination: Research finds intent to be an ally often does not translate into action
Disability: New online service to help employers support disabled employees
On 17 October 2022, the government announced a £6.4 million investment to help employers support employees with disabilities and health conditions. Part of this investment will fund a new online service that will provide information and advice about how to support and manage employees with disabilities or health conditions, whether they are in or out of work. The service will be free and can be accessed by any employer although it is aimed at smaller businesses who may not have in-house HR support or access to occupational health services. It is hoped this service will help small businesses develop more inclusive workforces.
An early test version of the Support with Employee Health and Disability service is currently active and will be updated and developed over the next three years. An online survey is open for businesses and disability groups to offer feedback that will be used to inform the development of the site.
Support & Leave: CIPD report reveals gaps in workplace support for employees experiencing pregnancy or baby loss
A report published by the CIPD has identified gaps in workplace support for employees experiencing pregnancy or baby loss. Only a quarter of employees surveyed received paid compassionate or other special leave in this situation and a fifth of employees received no support at all from their employer. After compassionate leave, the types of support that employees identified as being most helpful were understanding from managers and colleagues that it is a difficult time, paid time off to attend appointments and the option to work from home when needed.
The CIPD has confirmed that it will publish guidance to provide practical advice for employers to improve workplace support for employees experiencing pregnancy and baby loss based on the following five principles:
- Raise awareness, in a thoughtful and sensitive way, about the need for pregnancy or baby loss to be recognised as part of workplace wellbeing.
- Create an open, inclusive and supportive culture to break down stigma and let employees know they will be supported.
- Develop an organisational framework to support employees. This should include implementing specific policies, which the report identified only just over a third of employers have in place.
- Manage absence and leave with compassion and flexibility.
- Equip line managers to support people with empathy and understanding so that they feel comfortable and capable to have sensitive conversations with team members.
Data Protection: ICO consults on monitoring at work draft guidance
On 12 October, the Information Commissioner’s Office (ICO) opened a consultation on draft employment practices and published its draft guidance on monitoring at work. The guidance is open for consultation until 11 January 2023. The ICO is publishing its draft guidance on employment practices in stages with this being the first. It has also published an impact scoping document and plans to publish additional practical tools such as checklists.
The draft guidance covers key topics such as lawful basis for monitoring, transparency, fairness and accountability. It also provides guidance on DPIAs, security and retention as well as specialist topics such as covert monitoring, use of biometric data, call monitoring, dashcams and device activity.
This follows on from the ICO’s call for views in 2021. The ICO has published a summary of the responses to its call for views.
Working Practices: One third of employers expect a four-day week to be a reality within ten years
On 7 October 2022, the CIPD published a new report, The four-day week: Employer perspectives, which sets out employer perspectives on moving to a four-day week. The report is based on a survey which shows that 34% of respondent organisations consider that a four-day week for most workers is attainable within the next decade. One in ten respondents reported having already reduced working hours without cutting pay in the past five years (47% of those respondents confirmed the reductions were part of the COVID-19 furlough scheme). Many of the 2,000 employers surveyed felt that increased efficiency would be needed for a four-day week with no reduction in pay to be sustainable, either through organisations working smarter (66%) or the increased use of technology (68%).
The CIPD notes that the report is published amid rising interest in the concept of the four-day working week. A major trial in the UK, launched earlier this year, involves around 3,330 workers across 70 companies reducing their working week to four days with no loss of pay.
Despite the rising interest in adopting a four-day week, the report found that progress remains slow with just 1% of employers that have not already done so planning to reduce hours without lowering pay in the next three years. For organisations that have reduced working hours, the main drivers are improving employee wellbeing, helping with recruitment and retention, or a reduction in demand for products or services (36%, 30% and 32% of respondents respectively). The main challenges facing these organisations are that reduced hours do not suit everyone (32%), workers cannot achieve the same volume of work or output as before (30%), or a task requires someone to be present (26%).
A separate report, The four-day week: Scottish employer perspectives, has also been published.
IR35: Frustration from business groups over latest Chancellor’s backtracking over the repeal of the IR35 rules
People Management reported on 18 October 2022 that business groups are frustrated by new Chancellor, Jeremy Hunt, has taken a u-turn from Kwasi Kwarteng’s mini-budget where he had proposed repealing the IR35 off-payroll tax rules for contractors.
We reported in our September Employment Law General Update that the mini-budget had planned to repeal the 2017 and 2021 reforms from 6 April 2023. It wasn’t going to abolish IR35 but would have taken us back to the rules in place from 2000 (the Intermediaries Legislation), where the onus was on the worker to correctly assess their status and pay the correct amount of tax. However, our new Chancellor has backtracked on this meaning the situation remains the same that the end client remains responsible (and liable) for determining the IR35 status of contractors. The liability and responsibility is on the fee-paying party (often the recruiter) in the supply chain applying to public sector bodies, and medium and large private sector businesses. Small companies are exempt.
Industry experts are frustrated that the promised simplification of the tax rules is not being delivered and that many businesses had already started to undertake the vital work of how their systems would need to change by April 2023. Paul Farrer, founder and chairman of global recruitment agency Aspire, said that in turbulent times like this freelancers and contractors were needed for businesses to navigate peaks and troughs in demand. However, he called the recent IR35 news a “a backward step” – not just for workers, “but for the recruitment industry and businesses that rely heavily on the flexibility and skills of the independent workforce”. Other business leaders complain that this system is complex and poorly enforced, and badly needs proper reform. To read the whole article, see People Management.
Brexit: Government publishes guidance for UK regulators on Professional Qualifications Act 2022
The Professional Qualifications Act 2022 (PQA 2022) received Royal Assent on 28 April 2022, revoking the EU rules relating to the recognition of professional qualifications in the UK.
Among other things, the PQA 2022 introduced a new framework for the recognition of UK professional qualifications between different parts of the UK and overseas. Under this framework, UK regulators have a duty to publish information about the requirements for individuals to enter and remain in their professions (section 8, PQA 2022). In addition, UK regulators must, on request, share information with regulators from other parts of the UK (section 9, PQA 2022) and overseas regulators (section 10, PQA 2022). These obligations apply from 28 October 2022.
On 4 October 2022, BEIS published the following documents to assist UK regulators to comply with these new obligations:
- Guidance on the obligation to publish qualification requirements under section 8 of the PQA 2022, setting out what information must be published, when the obligation applies and when published information should be updated.
- Two separate guidance documents explaining the information-sharing obligations under, respectively, section 9 and section 10 of the PQA 2022. These documents set out when the legal requirements under the relevant section apply and what information must be shared. They also each contain a worked example of what a UK regulator should do when it receives a valid request for information.
Discrimination: Research finds intent to be an ally often does not translate into action
One of the first studies into allyship in the UK workplace (published by Wates on 27 September 2022) has found that intent to support colleagues from underrepresented groups has not translated into action. The study of over 5,000 employees found that 67% of UK employees consider themselves an “ally“. However, only 36% have spoken up against discrimination or exclusion of a colleague from a minority background when they have seen it at work. Around two-fifths of respondents said that they had spent time educating themselves about the experience of minorities, although this figure was lower for senior executives.
The same research found that 40% of employees have experienced microaggressions related to identity. The figure rises to nearly 60% for LGBT employees and to 64% for respondents from Black Caribbean backgrounds. Microaggressions experienced by respondents include a name being mispronounced because it is “too hard” (60% of Black African respondents and 59% of Black Caribbean respondents) and a colleague being told that they “don’t even ‘look’ gay” (42% of men from the LGBT community). Respondents from minorities were more likely to report witnessing microaggressions or discrimination. Microaggressions or discrimination related to sexual orientation was reported by almost half of lesbian, gay and bisexual respondents compared to 25% overall. Microaggressions or discrimination related to race or ethnicity were reported by 35% of respondents, rising to 62% of Black Caribbean respondents and 47% of Pakistani respondents.
If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: firstname.lastname@example.org
A change in prime minister has brought about some immediate changes to laws affecting employment law, such as the Bill on which laws will be retained from the EU, repeal of the off-payroll rules (IR35) and the dropping of the Bill of Rights Bill, which was set to replace the Human Rights Act. Sadly, two reports recently demonstrate that racism and gender discrimination persist at work, while FTSE 100 company chief executives are getting a massive pay rise. Meanwhile, ACAS has published new guidance on staff suspensions.
- Brexit: Retained EU Law (Revocation and Reform) Bill 2022-23 introduced to House of Commons
- IR35: Off-Payroll Rules to be repealed by April 2023
- Human Rights: Bill of Rights Bill 2022-23 dropped by government
- Equality: New TUC report highlights prevalence of racism at work
- Discrimination: New report highlights persistence of gender discrimination in the workplace
- Pay: Chief executives of FTSE 100 companies see average pay jump of 39%
- ACAS: New guidance on staff suspensions published by ACAS
Brexit: Retained EU Law (Revocation and Reform) Bill 2022-23 introduced to House of Commons
On 22 September 2022, the Retained EU Law (Revocation and Reform) Bill 2022-23 was introduced to the House of Commons, and written ministerial statements were made summarising the Bill’s provisions. A full legal update on the Bill will follow. The written statements explain that the Bill includes provisions to:
- Sunset retained EU law. Retained EU law in EU-derived secondary legislation and retained direct EU legislation will expire on 31 December 2023 unless otherwise preserved. Special features of EU law will be removed from retained EU law that remains in force after that date (assimilated law), ending the principle of the supremacy of EU law, general principles of EU law and directly effective EU rights on 31 December 2023. EU interpretive features will no longer apply to assimilated law. (The sunset date can be extended until 2026 for specified pieces of legislation.)
- Reverse the priority currently given to retained direct EU legislation over domestic UK legislation passed before the end of the transition period when they are incompatible, with a power to amend the new order of priority to retain specific legislative effects where necessary in specific circumstances.
- Give domestic courts greater discretion to depart from retained EU case law, and provide new court procedures for UK and devolved law officers to refer or intervene in cases involving retained EU case law.
- Downgrade the status of retained direct principal EU legislation for amendment purposes so that it no longer has parity with Acts of Parliament.
- Give the government powers to make secondary legislation so that retained EU law or assimilated law can be amended, repealed and replaced more easily, and enable the government (via Parliament) to clarify, consolidate and restate legislation to preserve its current effect.
The government’s news story added that all required legislation relating to tax and retained EU law will be made via the Finance Bill or subordinate tax legislation, and the government will introduce a bespoke legislative approach for retained EU law concerning VAT, excise, and customs duty in a future Finance Bill.
IR35: Off-Payroll Rules to be repealed by 6 April 2023
In his autumn statement on 23 September, Chancellor Kwasi Kwarteng announced that the UK government will scrap the 2017 and 2021 reforms to the IR35 off-payroll working rules in the next Finance Act, aimed to be enacted on 6 April 2023. Addressing the House of Commons he said, “reforms to off payroll working have added unnecessary complexity and cost for many businesses.” This has come as a bit of a shock to many industry experts who have commented that it’s unheard of for a Chancellor to repeal primary tax legislation without consultation. It is just the reforms which are being axed, and not the IR35 system itself, which will likely be celebrated by independent contractors who have found the measures to have wrought havoc to their business and added unnecessary levels of additional work for both the contractors and the businesses that engage them.
IR35 reform in the public sector was introduced in 2017 meaning that public sector bodies become responsible for determining the IR35 status of contractors – the responsibility shifted from the contractor to the end client, rather than the contractor taking the responsibility. In addition, the reforms meant the liability also shifted from the contractor to the fee-paying party (often the recruiter) in the supply chain. IR35 reform in the private sector in 2021 mirrored this but applied only to medium and large businesses. Small companies remained exempt.
The repeal of the 2017 and 2021 reforms from 6 April 2023 doesn’t abolish IR35 but takes us back to the rules in place from 2000 (the Intermediaries Legislation). This puts the onus back on the worker to correctly assess their status and pay the correct amount of tax. It should be noted that for services provided before 6 April 2023, the current rules will still apply, even where the payment is made on or after 6 April 2023.
However, contractors may need to hold off rejoicing just for now. Some Tory Ministers are already claiming they may rebel against the next Finance Act if the pound falls below the dollar. Dave Chaplin, CEO of IR35 Shield, says: “When you read the financial impact of the repeal in the Government’s Growth Plan document, you’ll see that there are six billion pounds worth of reasons why all rejoicing would be premature, and why all parties in the supply chain should not be complacent as we approach April 2023, nor beyond.”
Human Rights: Bill of Rights Bill 2022-23 dropped by government
On 7 September 2022, it was reported in the press that the Bill of Rights Bill 2022-23 had been dropped by the new government headed by Liz Truss and would not progress to its second reading, which had been scheduled to take place on 12 September 2022. The Bill would have repealed the Human Rights Act 1998 and reframed the UK’s legal relationship with the ECHR, to which the UK would have remained a signatory. Press reports suggest that the government is looking at different legislative options for reform.
Equality: New TUC report highlights prevalence of racism at work
The TUC has published a report ‘Still Rigged: Racism in the UK Labour Market 2022‘, based on extensive polling, which shows that racism and racial inequality continue to be experienced in the workplace. In addition to racism impacting the types of work ethnic minority workers are employed to do, two in five people reported having experienced racism at work in the past five years. The most common types of racial harassment are racist jokes and banter (27%), being made to feel uncomfortable through use of stereotypes and appearance-based comments (26%), being bullied or harassed (21%), and racist remarks directed at the respondent or in their presence (21%). Most instances were perpetrated by fellow employees and 15% were made by a customer, client or patient. For one in six respondents, the racism was perpetrated by a manager.
Only 19% of people who experienced racist incidents reported the last incident to their employer. Nearly half of people who did not report instances of racist abuse (44%) said that they did not believe the issue would be taken seriously. Even when incidents were reported to an employer, action was taken to prevent future harassment in only 29% of instances.
The TUC has recommended that the government, employers, enforcement bodies and trade unions work together to deliver a “collective, pre-emptive response“. Specifically, the TUC suggests that the “floor of working rights” be improved for everyone, that employers have a duty to embed race equality practices in their workplaces and that there are swift and effective penalties when workers experience racism.
Discrimination: New report highlights persistence of gender discrimination in the workplace
Randstad has published a new report ‘Randstad: Gender equality in the workplace 2022 (September 2022)‘ on gender equality in the workplace. To inform the report, 6000 workers in the construction, education, healthcare and technology sectors were surveyed. The survey sought insight into the status quo of UK workplaces, the persistence of gender discrimination, how employers in these sectors support their employees and what areas workers would like to see their employers focus on in the coming year. Among the findings are statistics which show that:
- Inappropriate behaviour or comments from male colleagues had been witnessed or encountered by 72% of women surveyed.
- Only 18% of women surveyed had never experienced gender discrimination.
- 7% of women reported having been passed over for promotion due to perceived gender discrimination.
- Just under 10% said they had been offered a less important role because of their gender.
- Employers are not doing enough to support female employees during the menopause, according to 73% of the women surveyed.
The report also highlights findings that are specific to each sector. Recommendations are made in three areas; ensuring the recruitment process is inclusive, fostering an inclusive workplace culture and weaving inclusion into the employee lifecycle.
Pay: Chief executives of FTSE 100 companies see average pay jump of 39%
Research by the High Pay Centre and Trades Union Congress (TUC) shows that the median average pay for CEOs of FTSE 100 companies increased by 39%, from £2.5 million in 2020 to £3.41 million in 2021. During the pandemic, many CEOs took a voluntary pay cut when employees were placed on furlough, but CEO pay has now surpassed the 2019 median of £3.25 million. A similar pay increase was found in the average wages of FTSE 250 CEOs (38%). The average bonus received by CEOs also jumped from £828,000 in 2020 to £1.4 million in 2021.
Previous research by the thinktank suggested that the pay ratios of FTSE 350 companies between CEOs and median employees would increase to new highs after the pandemic. The report shows that CEOs receive 109 times the average pay of British workers, a higher gap than in 2019 when CEOs received 107 times the average pay of British workers.
Frances O’Grady, the general secretary of the TUC, highlighted that the CEO pay jump comes at a time where workers are experiencing “the biggest real wage falls in 20 years.” Workers’ building dissatisfaction at significantly below inflation pay rises in the context of the current cost of living crisis is being increasingly manifested in industrial action. Strikes across multiple industries have already taken place, with further walk-outs due in the coming months.
ACAS: New guidance on staff suspensions published by ACAS
ACAS has published new guidance to advise employers on how to consider and handle staff suspensions at work, specifically during investigations. The guidance covers deciding whether to suspend someone, the process for suspending someone, supporting an employee’s mental health during suspension and pay and holiday during suspension.
ACAS recommends that because of the risk of breaching the employment contract and the stress that can be caused, a suspension should only be used when it is a reasonable way of dealing with the situation (such as while an investigation is carried out and there is a need to protect evidence, witnesses, the business, other staff or the person being investigated) and there are no appropriate alternatives. Employers should consider each situation carefully before deciding whether to suspend someone.
Suggested alternatives to suspension include:
- Changing shifts, site or working from home.
- Working with different customers or away from customers.
- Stopping working with certain systems, tools or on specific tasks.
A suspension may also be appropriate in order to protect an employee’s health and safety (such as in medical or pregnancy circumstances).
Employers should support a suspended worker by explaining the reason for the suspension, making it clear that it does not mean that it has been decided they have done anything wrong, maintaining pay and benefits, keeping the suspension as short as possible, keeping it confidential wherever possible, and staying in regular contact throughout. The worker should be informed of their suspension in person if possible. It is good practice to allow them to be accompanied at any suspension meeting and for the suspension to be confirmed in writing.