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Employment Law General Update – November 2023
This month’s employment law updates cover various critical issues.
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Employment Law General Update – June 2023
This month we bring you updates on government reforms to employment law and the ping-pong battle over which laws shall be retained following Brexit; which companies are failing to pay national minimum wage, a review in diversity and goals for the 4 day week for political parties to endorse; our UK strike laws are being critiqued and we will soon know which occupations we are most lacking in the UK.
- Brexit: Government consults on reforms to working time rules, holiday pay and TUPE
- Brexit: Lords put further amendments back to Commons on REULRR Bill
- Pay: Department for Business and Trade names companies failing to pay NMW
- Diversity: Parker review sets new targets for FTSE 350 and private companies
- Working Patterns: 4 Day Week campaign launches Mini Manifesto
- Trade Unions: International Labour Organization comments on UK strike laws
- Immigration: MAC intends to publish its shortage occupation list review in autumn 2023
Brexit: Government consults on reforms to working time rules, holiday pay and TUPE
On 12 May 2023, the government published a consultation paper, setting out its plans regarding the future of retained EU employment law. The consultation paper confirms the government’s intention to keep retained EU employment laws in the following areas without any change: family leave rights (maternity, paternity, adoption and parental leave), ‘atypical’ workers’ rights (part-time workers, fixed-term workers and agency workers), and information and consultation rights. However, certain reforms are proposed in the areas of working time, paid holiday rights and rights upon the transfer of a business or an outsourcing. The government says it has identified areas for reform of laws it considers are ‘too onerous for business to be used effectively or too complex for workers to know, understand and use’. Amanda Steadman, principal knowledge lawyer at Brahams Dutt Badrick French LLP, sets out in her article the proposed changes in the consultation and the next steps.
Brexit: Lords put further amendments back to Commons on REULRR Bill
On 24 May 2023, the House of Commons debated the Lords amendments to the Retained EU Law (Revocation and Reform) Bill (REULRR Bill), with a majority of MPs disagreeing with three amendments. Lords amendments 6, 15 and 42 were rejected and Lords amendments 1 and 16 were further amended. Lords amendments 2 to 5, 7 to 14, 17 to 41 and 43 were agreed to.
On 20 June 2023, the House of Lords debated Commons amendments to the REULRR Bill. The Lords approved two amended motions, proposing amendments in lieu of those previously rejected by the House of Commons. These amendments relate to the two outstanding issues in debate—environmental protection and parliamentary scrutiny. Continuing the ‘ping pong’ process, the House of Commons considered the Lords message on 21 June 2023, with the government moving that the Lords amendments be rejected again. The Bill was scheduled to return to the House of Lords on 26 June 2023.
Pay: Department for Business and Trade names companies failing to pay NMW
The Department for Business and Trade (DBT) has published the names of 202 employers who have failed to provide their lowest paid staff the national minimum wage (NMW). Approximately 63,000 workers across the companies did not receive NMW as a result of deductions from wages (39%), failure by the companies to properly compensate for working time (39%) and incorrect apprenticeship rates (21%).
In the top 3 in this Round 19 are WH Smith Retail Holdings Ltd, Lloyds Pharmacy Ltd and Marks and Spencer PLC. Some in the list owe as little as £5500 to one employee but the larger offenders have failed to pay cumulatively hundreds of thousands of pounds to thousands of workers.
Employers are reminded that the minimum wage law applies to all parts of the UK. Employers should always carry out the necessary checks (guidance is available on the Gov website: Calculating the Minimum Wage), and HMRC consider all complaints from workers, so they are reminding workers to check their pay with advice available through the Check your pay website.
Diversity: Parker review sets new targets for FTSE 350 and private companies
The Parker Review Committee has published a 2023 update report on ‘Improving the Ethnic Diversity of UK Business’. The independent review, which published its first report in 2016, was commissioned by the former Department for Business, Energy and Industrial Strategy to consult on ethnic diversity in UK boards. The review also set several diversity targets for FTSE 100 and FTSE 250 companies. The update contains the results of the review’s survey of those targets in 2022 in addition to a number of new targets to be achieved by 2027.
Working Patterns: 4 Day Week campaign launches Mini Manifesto
The 4 Day week campaign has published a ‘Mini Manifesto’, which they are calling on political parties to endorse ahead of the next general election. 4 Day Week is a national campaign for a 32-hour working week with no reduction in pay. The manifesto lays out the campaign’s key principles and goals.
Trade Unions: International Labour Organization comments on UK strike laws
The International Labour Organization (ILO) has critiqued the UK’s strike laws and called for the UK government to bring union laws in line with international law. In a rare intervention that has not been used against the UK since 1995, the ILO issued an instruction for ministers to seek assistance from the ILO and report back on progress by 1 September 2023. The Trades Union Congress has called this ‘hugely embarrassing’ for ministers.
Immigration: MAC intends to publish its shortage occupation list review in autumn 2023
The Migration Advisory Committee (MAC) has confirmed, by way of an update to its guidance webpage, that it intends to publish its report reviewing the shortage occupation list in autumn 2023. This is later than the anticipated date of June 2023, as stated in previous press releases.
Further Information:
If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: hello@dixcartuk.com
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Employment Law General Update – May 2023
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.
Employment rights
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.
Parental leave
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.
Further Information:
If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: hello@dixcartuk.com
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Employment Law General Update – April 2023
A lot going on this month. New rates and consultations regarding NLW and NMW, new requirement for immigration scale-up route, an update on the Retained EU Law Bill and discussions over the definition of ‘sex’ under the Equality Act. Meanwhile, there is a review into whistleblowing law, an inquiry into seasonal worker visas, a blog on loneliness in the workplace, and a review relating to the work prospects of autistic people.
- Staff Pay: Changes to rates of National Living Wage and National Minimum Wage and 2023 consultations
- Whistleblowing: Government launches whistleblowing law review
- Immigration: Home Office publishes details of a new endorsement requirement for the Scale-up route
- Immigration: MAC Chair publishes letter regarding inquiry into Seasonal Worker visa
- Welfare: Glassdoor reveals survey findings on employee loneliness
- Disability: DWP publishes new review to increase work prospects of autistic people
- Disability: Commons briefing highlights lowest rates of employment among disabled people are for those on autism spectrum
- Brexit: An update on the Retained EU Law (Revocation and Reform) Bill
- Equality Act: EHRC respond to Minister’s request to clarify the definition of ‘sex’
Staff Pay: Changes to rates of National Living Wage and National Minimum Wage and 2023 consultations
SI 2023/354: These Regulations are made to amend the National Minimum Wage Regulations 2015, SI 2015/621. They come into force on 1 April 2023 and increase:
- the rate of the national living wage for workers who are aged 23 or over from £9.50 to £10.42 per hour
- the rate of the national minimum wage for workers who are aged 21 or over (but not yet aged 23) from £9.18 to £10.18 per hour
- the rate of the national minimum wage for workers who are aged 18 or over (but not yet aged 21) from £6.83 to £7.49 per hour
- the rate of the national minimum wage for workers who are under the age of 18 from £4.81 to £5.28 per hour
- the rate for apprentices within SI 2015/621, reg 5(1)(a) and (b) from £4.81 to £5.28 per hour
- the accommodation offset amount which is applicable where any employer provides a worker with living accommodation from £8.70 to £9.10 for each day that accommodation is provided
The Low Pay Commission (LPC) has published a consultation seeking views on the impact of National Living Wage (NLW) and National Minimum Wage (NMW) increases for 2024. The NLW is expected to rise to between £10.90 and £11.43 in 2024. The information gathered will be used to inform the LPC’s recommendations to the government in the Autumn. The consultation closes on 9 June 2023 at 11:45pm.
See also our updated Facts and Figures for 2023
Whistleblowing: Government launches whistleblowing law review
On 27 March 2023, the government published a press release confirming that they have launched a review of the whistleblowing framework. The press release states that the review will gather evidence on the effectiveness of the current whistleblowing regime in enabling workers to speak about wrongdoing and protect those who do so. The press release confirms that the evidence gathering stage of the review will end in Autumn 2023. The review will pursue views and evidence from whistleblowers, key charities, employers and regulators.
Immigration: Home Office publishes details of a new endorsement requirement for the Scale-up route
The Home Office has updated its sponsor guidance in relation to the Scale-up route. Notably, it confirms that an ‘endorsing body pathway’ is being launched, on 13 April 2023, for prospective employer applicants who do not meet the sponsor licence eligibility requirements (eg ‘if their HMRC history is not long enough’). As an alternative, prospective sponsors will be able to obtain an endorsement from a Home Office-approved endorsing body and submit this with the licence application (which must be made no more than three months from the date of endorsement). The guidance confirms that the endorsement process will attract a fee, and further details will be published in due course. Other changes include a new Annex SC2, setting out the changes to the route from 12 April 2023, in line with the Statement of Changes in Immigration Rules HC 1160.
Immigration: MAC Chair publishes letter regarding inquiry into Seasonal Worker visa
The Chair of the Migration Advisory Committee (MAC), Professor Brian Bell, has published a letter written to the Minister of State for Immigration, Robert Jenrick, regarding an inquiry into the Seasonal Worker visa. The inquiry will consider the rules under which the scheme operates, the size and costs of the scheme, the potential for exploitation and poor labour market practice, evidence from international comparisons and the long-run need for such a scheme. Bell has also confirmed that MAC will be working with the Department of Environment, Food and Rural Affairs (DEFRA) during the inquiry.
Welfare: Glassdoor reveals survey findings on employee loneliness
Glassdoor has published a blog with insights from its new study which surveyed 2,000 employees to understand the levels of employee loneliness in the UK. The blog reveals the impact of poor workplace social life and the importance of workplace friendships to retaining staff.
Key findings include:
- six in ten people with less than five years of work experience are lonely all or most of the time
- only 51% of employees connect socially with colleagues at least once a month
- 28% of workers under 35 would stay in a job they did not like if the workplace social life was good
- 89% of workers believe feeling a sense of belonging with their company is vital to their overall workplace happiness
- nearly 49% of workers say a good social life has a significant impact on their overall job satisfaction and mental health
Common reasons for workplace loneliness include less in-person interaction with co-workers, inflexibility in the workplace, and a lack of focus on creating a sense of belonging or community by an employer.
Glassdoor reveals that without a good workplace social life, workers are more likely to be less productive and engaged. They are also more likely to experience stress, anxiety and eventually burnout.
Disability: DWP publishes new review to increase work prospects of autistic people
The Department for Work and Pensions (DWP), supported by the autism charity Autistica, has launched a review, the Buckland Review of Autism Employment, to increase the employment prospects of autistic people. The review, which will be led by Sir Robert Buckland KC MP and start in May 2023, will consider how the government can support employers to recruit and retain autistic people and enjoy the benefits of a neurodiverse workforce. Recommendations for change will be made to the Secretary of State in September 2023.
Disability: Commons briefing highlights lowest rates of employment among disabled people are for those on autism spectrum
The House of Commons has released a research briefing on autism, policy and services. The briefing sets out the Department for Work and Pensions’ annual set of statistics on the employment of disabled people, which reports that the lowest rates of employment among disabled people are those on the autism spectrum.
In the 2020–21 financial year, 26.5% of disabled people on the autism spectrum were in employment, compared to 52.5% of all disabled people and 80.4% of non-disabled people in the same period. In 2016, the National Autistic Society reported that 77% of unemployed people with autism wanted to work.
Brexit: An update on the Retained EU Law (Revocation and Reform) Bill
Retained EU law is a concept created by the European Union (Withdrawal) Act 2018. This Act took a ‘snapshot’ of EU law as it applied to the UK at the end of the Brexit transition period on 31 December 2020 and provided for it to continue to apply in domestic law. The Bill would automatically revoke, or ‘sunset’, most retained EU law at the end of 2023. This would not apply to retained EU law that is domestic primary legislation.
Ministers and devolved authorities could exempt most (but not all) retained EU law from the sunset, and UK ministers (but not devolved authorities) could delay the sunset until 23 June 2026 at the latest for specific descriptions of retained EU law. Any retained EU law that still applied after the end of 2023 would be renamed as assimilated law. The Bill would give ministers and devolved authorities powers to restate, reproduce, revoke, replace or update retained EU law and assimilated law by statutory instrument.
The Bill would also repeal the principle of supremacy of retained EU law from UK law at the end of 2023, although its effects could be reproduced by statutory instrument in relation to specific pieces of retained EU law. The Bill would also make changes to the way that courts could depart from retained EU case law.
The Bill would change the way that some types of retained EU law can be modified. It would ‘downgrade’ retained direct EU legislation so that this could be amended by secondary legislation. It would also remove additional parliamentary scrutiny requirements that currently apply when modifying some types of EU-derived domestic secondary legislation.
The government has published a ‘dashboard’ of retained EU law, although it acknowledges this is not a comprehensive catalogue of all retained EU law that may be in scope of the Bill. The dashboard is due to be updated regularly.
Concerns have been raised throughout the Bill’s progress about the amount of retained EU law to be reviewed before the sunset deadline and whether some may end up being revoked inadvertently. In the Commons, MPs expressed concerns about the impact of large-scale and rapid changes to the statute book as a consequence of the Bill and have highlighted a lack of clarity about what retained EU law the government intends to keep, particularly in the areas of employment, environmental and consumer protections. They were also critical of a lack of parliamentary scrutiny of and input into the process of reforming retained EU law. However, the only amendments made to the Bill in the House of Commons were government amendments to clarify the Bill’s drafting.
The Bill is now with the House of Lords. Five days of Committee proceedings—when a Bill is examined in detail—concluded on 8 March 2023.
Over the five days, Peers put forward many amendments to the Bill on a range of subjects. Opposition peers were scathing in their comments on the Bill. For example, Baroness Ludford (LD), said the Bill was ‘pretty hopeless’ and accused the government of adopting a ‘slash and burn’ approach to legislative reform, with opposition amendments seeking to bring to it ‘some rationalisation and order’. For the government, Lord Callanan, said, on the contrary, a ‘significant minority’ of retained EU law was ‘legally inoperable’ and that it was ‘not good governance’ to subject it to ‘complex and unnecessary parliamentary processes’ before being able to remove it from the statute book. He added that the amendments, including those seeking to delay the sunset, would ‘hamper efforts to realise the opportunities the Bill presents’.
The Bill has come out of Committee stage in the Lords with amendments, including the insertion of a new clause setting out exceptions to the sunset of REUL, and it seems likely that further amendments will be made at Report stage. It is noteworthy that at Second Reading in the Lords a significant number of Conservative peers spoke against the Bill. The level of opposition expressed by peers from all parties indicates that it may not be straightforward for the government to get the Bill into law. It seems likely that the government will need to accept at least some of the Lords’ amendments if it wishes to avoid a lengthy period of ‘ping pong’ between the Lords and the Commons.
In contrast to the approach being taken in respect of much retained EU law, the House of Lords is, in parallel, scrutinising the Financial Services and Markets Bill, which would similarly revoke retained EU law relating to financial services, but contains developed provisions which enable the Treasury and financial services regulators to replace that EU Law with legislation designed specifically for UK markets.
Report stage on the Bill—a further chance for the House of Lords to closely scrutinise elements of the Bill and make changes—began on 19 April 2023.
Authors: David Mundy, Aaron Nelson, and Joanna Purkis at BDB Pitmans, for LexisNexis.
Equality Act: EHRC respond to Minister’s request to clarify the definition of ‘sex’
On 21 February 2023, the Minister for Women and Equalities, Kemi Badenoch, requested advice from the Equality and Human Rights Commission (EHRC) regarding the definition of the protected characteristic of ‘sex’ in the Equality Act 2010 (EqA 2010). EHRC have provided an initial response to the Minister’s request namely suggesting that the UK government carefully consider implications any change to the legislation could have.
Further Information:
If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: hello@dixcartuk.com
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Employment Law General Update – September 2022
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.
Further Information:
If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: hello@dixcartuk.com
