Our spring round-up of key employment law changes and interesting Tribunal cases

Welcome to our spring newsletter, featuring the HR updates that businesses need to be aware of, as well as the latest news from the tribunals.

As always, if you’d like to talk over anything covered here, please get in touch – we would be happy to hear from you.

COVID update 

Hopefully we’re coming out of the worst of the pandemic, but for now we can’t do an update without mentioning the dreaded C-word!

The latest changes regarding furlough

The furlough leave scheme has been extended to September 2021, with some new rules.

 Who can be furloughed?

  • Up to 30th April 2021, you can put employees on furlough if they were employed on or before 30th October and a PAYE RTI submission made for them between 20th March 2020 and 30th October 2020.
  • After 1st May you can put employees on furlough if they were employed on or before 2nd March 2021 and a PAYE RTI submission made for them between 20th March 2020 and 2nd March 2021. This might be helpful if you’ve had some new starters.

 

What do you have to pay?

  • Until 30th June 2021, HMRC will pay the full 80% of pay capped at £2,500 per month.
  • In July 2021, HMRC will pay 70% and you will be required to pay 10%.
  • In August and September 2021, HMRC will pay 60% and you will be required to pay 20%.

The cost of using the furlough scheme will therefore gradually increase.

If you are still using the furlough scheme, remember that staff are accruing holidays whilst on furlough leave and that you can ask them to use this up during their furlough leave period. You can claim furlough pay towards the cost of this holiday pay and it also means that you’re not trying to manage staff taking lots of holiday whilst you’re trying to get back to pre-furlough work rates.

Remember that staff must be paid at 100% for any time classed as holiday leave.

The Job Retention Scheme Bonus, that was to be used to reward employers for keeping employees on for at least 3 months after furlough ends has not been mentioned and therefore is not currently expected to be available.

Corona

The latest changes regarding shielding

The government has stated that we should all continue working from home if possible until 21st June 2021. However, the guidance to employees to shield at home has now come to an end. This means that if you have shielding employees who cannot work from home, you can start arranging their return to work.

Remember that the requirements to have a COVID-Secure workplace are still in force. When returning vulnerable people to work you will need to check your risk assessments and consider what steps you might need to put in place to protect them at work.

You will still be permitted to use furlough for people who are clinically vulnerable if you need to do so. However, they will not be eligible for Statutory Sick Pay if the reason for them being away from work is their wish to continue shielding.

What is happening about vaccinations

The programme of vaccinations is now impacting more at work as more people of working age are being invited for their vaccinations. If an employee needs time off work to have their vaccination, you should accommodate this if at all possible.

You may wish to allow paid time off as an incentive for people to go and get their vaccination as the more people vaccinated the lower the risks to your workplace. However, you are not legally obliged to pay for the time off unless by custom and practice you would usually pay for time off for appointments, for example to go to the dentist.

We advise against trying to compel an employee to have a vaccine if they do not want to have it or disciplining/ dismissing them if they refuse to have it. If you do force this on your existing staff, you may face a discrimination claim (for example on grounds of age, disability or religious/ philosophical belief) and if they’re dismissed/ resign as a result then you may face an unfair dismissal claim.

You may withhold sick pay (other than Statutory Sick Pay) for staff who refuse to have the vaccine and are then off work due to COVID, however you must make clear in advance to all staff that you’re introducing this limitation on your sick pay rules.

If you do this, we recommend that you allow staff the opportunity to let you know of any concerns about the change as you need to know if there is a genuine health reason or strongly held belief that prevents them from getting the vaccine and may amount to a protected characteristic. If they disclose something relevant, you will need to consider whether to waive the rule for them in order to avoid indirectly discriminating against them – we can advise on this if needed.

The Brexit situation

You may have seen the Financial Times report in January that some employment protections might be scrapped as we leave the EU. In particular, they announced that:

  • the 48-hour limit on the working week might be removed – the UK is unique to the rest of the EU in that we already have the ability to opt out of the 48-hour limit. Some of you may have already agreed an opt out with your staff if they regularly work a lot of hours.
  • the requirement to calculate holiday pay as an average of pay including overtime and commission might be scrapped – although a simplification of the rules around this would be welcome, we believe it is unlikely to be scrapped altogether because much of the changes have come through UK case law and the Good Work Plan, which was endorsed by the government, was in favour of average holiday pay.

However, after the news was published, Kwasi Kwarteng, the Business Secretary, had to issue an announcement that this was incorrect and that there are no plans to start reducing employment protections.

The EU-UK Trade Cooperation Agreement includes a non-regression clause, which means that the UK cannot undo or change any employment laws originally made in the EU where this might affect trade and investment. 

It is therefore likely that any changes will happen slowly. 

Latest news about the Good Work Plan

In December 2019, a commitment was made to bring the Employment Bill into force to enact the various recommendations of the Good Work Plan. For the most part, due to the impact of COVID and Brexit these changes are yet to be made.

It is unlikely that the government will want to be seen to be backtracking on these changes, but we await further information about when they will come into force.

What is already in force?

The main change has been to contracts of employment:

  • You must make sure that employees get information about the main terms of their employment by their first day of work with you – this may mean sending their contract out with their offer letter.
  • Contracts should include more specific information about the hours/ days that people might be expected to work including any potential requirement to work evenings/ weekends.
  • Contracts should refer to all benefits including maternity and family leave benefits. You can include the information in the contract, refer to separate policies and procedures, or signpost to separate sources such as links to the relevant parts of the ACAS website.
  • Contracts should specify whether the job is conditional on any compulsory training and who is responsible for paying for that training. Remember, if you want the ability to claw back training fees from an employee who leaves your business you should have a clear agreement in place before they start the training.
  • The calculation of average holiday pay is to be done over a 52 week period (ending just before the holiday is taken) instead of a 12 week period.

What are we waiting for?

The government indicated that they would implement the following, we’re just waiting for this to happen:

  • A single enforcement body to help enforce employee rights – this was recommended in recognition of the fact that in the UK, if an individual isn’t in a trade union, they are left to enforce their employee rights individually in the Employment Tribunals.
  • A right for employees to request stable working, for example, if they are on a zero hours contract and need some certainty as to their hours. This is likely to mirror the right to request flexible working where the employee must have at least six months’ service and the employer can reject the request if there is a valid business reason for doing so.
  • An extension of redundancy protection rights for mothers. Currently, if someone is pregnant or on maternity leave and placed at risk of redundancy, they have the right to be at the front of the queue for any vacancies. It is proposed to extend this to the first six months after return from maternity leave.
  • A right for parents of children spending an extended amount of time in neonatal care to take leave and be paid at a fixed statutory rate. This would most likely be the same rate that applies to maternity/ paternity leave.
  • Protection of continuous service – currently, if an employee is dismissed or resigned and leaves their employment for one full calendar week (Sunday to Saturday) without any agreement that they will return, this will break their continuous service. This is to be changed so that the employee would have had to leave for at least four full weeks to lose their continuous service.

Employment status and ‘off payroll’ working

IR35

From 6 April 2021, if you engage an individual (either directly or through an intermediary company e.g. Joe Bloggs Ltd), you must decide whether the individual is an employee, worker or self-employed.

HMRC have been updating their guidance on IR35 and have said that, to help employers adjust, then will be carrying out checks and reclaiming incorrect tax, but will not impose penalties for non-compliance in the first 12 months. HMRC have updated their tool for assessing employment status here: https://www.gov.uk/guidance/check-employment-status-for-tax

Case law and Uber

We have looked at case law on employment status on a regular basis over recent years. The recent Uber case (Uber BV and others v Aslam) has gone all the way to the Supreme Court who have summarised the key factors that courts and Tribunals will take into account.

The Uber drivers brought a claim on the basis that they are workers, instead of self-employed. The Supreme Court has upheld their claim, which means that they entitled to National Minimum Wage when they’re working (this will apply whenever they’re logged in as available for work on the app, not just when they’re driving a passenger) and paid holiday (a minimum of 5.6 weeks per year including bank holidays).

The case is important to businesses who engage people on a self-employed basis. They key points for deciding that the Uber drivers were workers and not self-employed are:

  • Uber drivers are taken on through a recruitment and onboarding process. It isn’t a detailed process, but includes checking ID documents, a brief interview and some training on the Uber app. Uber drivers cannot simply substitute in another driver who hasn’t been through this process. There is therefore a degree of integration into the business and a requirement to provide personal services.
  • The ability for Uber drivers to reject work is restricted. Uber drivers decide when they are available for work by logging into the app. Once logged in, they’re offered work on the basis of who is the nearest driver to the passenger pick up point. When offered work, the Uber driver has ten seconds to decide whether to accept the work before it is offered to someone else. There is therefore some obligation on Uber to offer work to the driver based on its own rules. And, there is also an obligation on the Uber driver to accept work because if an Uber driver has a low acceptance rate, they are subject to warnings and penalties and may ultimately be terminated.
  • Uber drivers are subject to some degree of control by Uber. In particular:
    • Uber are very prescriptive about what car the Uber driver much have – it must be on a list of accepted makes and models, in good condition, no older than a specified age and preferably silver or black.
    • The Uber app recommends which route the Uber driver should follow. The driver can choose to depart from this route but it may result in reduced payment if the passenger complains about the route taken.
    • When deciding whether to accept work, the Uber driver doesn’t know the passenger’s destination and therefore cannot determine their likely income from the work.
    • The Uber app automatically calculates the fare according to Uber rules, the Uber driver cannot influence how much is charged. The Supreme Court held that it was very important that it was Uber who decided on the standard of service to be provide to the passengers and the price that would be charged for that service.

The requirement for personal services, obligation to accept work and submission to control are all strong indicators that an individual is not truly self-employed.

The QC who acted for the Uber drivers has summarised the Supreme Court’s judgment as making it easier for staff to claim that they are an employee/ worker instead of self-employed with the key question being whether the member of staff is subordinate to, dependent on and controlled by the business.

New pay rates and limits

As it is a new tax year, the usual rates and limits have gone up a little. You may have already seen these, but if not:

Minimum Wage

The National Living Wage now applies to all adults aged 23 and over and has increased to £8.91 per hour.

The other rates are as follows:

  • 21-22 year olds: £8.36 per hour;
  • 18-20 year olds: £6.56 per hour;
  • 16-17 year olds: £4.62 per hour;
  • Apprentices (under 18 at any stage of apprenticeship, 19 and over in the first year of apprenticeship): £4.30 per hour.

Pay for time off

Statutory Sick Pay is now £96.35 per week.

Statutory Pay for family leave (maternity, paternity, adoption, shared parental leave and parental bereavement leave) is now £151.97 per week.

Redundancy

The government has a handy online calculator to use when calculating redundancy pay. But, if you’re doing it yourself, remember that the cap on a week’s pay is now £544 per week.

https://www.gov.uk/calculate-your-redundancy-pay

And finally … Employment Tribunals – Interesting cases

The Employment Tribunals are currently overloaded and have a significant backlog of claims. We are hearing that many claims currently being made include allegations of furlough fraud, and this is consistent with Protect (the whistleblowing charity) being inundated with calls and HMRC’s reporting line being overloaded and them engaging another 1,000 officers to investigate potential fraud.

Face masks: Rubilus v Kent Foods UK

We haven’t had many COVID specific cases come through yet due to the backlog, but this one relates to the requirement to wear a face mask. Mr Rubilus was a delivery driver for Kent Foods and one of his regular drop offs was at Tate & Lyle – a big customer for Kent Foods. The rule at Tate & Lyle was that all visitors to site, including delivery drivers, must wear a face mask whilst on site.

Mr Rubilus refused to put a mask on, despite being asked to do so more than once. He gave no reason for his refusal and was asked to leave site. Tate & Lyle reported the matter to Kent Foods who investigated and dismissed him. The Employment Tribunal concluded that his dismissal was fair.

This is consistent with decisions in cases relating to unreasonable failures to follow reasonable instructions and/or to wear Personal Protective Equipment. However, each case will turn on its facts and care must be taken. For example, if Mr Rubilus had a health condition preventing him from wearing a face mask then this may have altered the outcome.

Redundancy: UQ v Marclean Technologies SLU

This is an EU case that pre-dates our departure from the EU and is therefore binding on our Employment Tribunals. It conflicts with previous decisions in relation to collective redundancy and is therefore a potentially difficult area for employers until further cases or legislation clears it up.

The rule on collective redundancy is that if you’re proposing to dismiss 20 or more people within a 90-day period then you must consult for a minimum period. Historically, the interpretation of this has always been that you look forwards at what is expected to happen over the coming 90 days. This approach is clearly set out in UK legislation and case law.

However, in this UQ case, the European Court of Justice stated that employers must also look backwards at what dismissals have taken place in the last 90 days and include them in their calculations. This could have serious implications for any employers who have had to make redundancies in recent weeks and are now having to review whether further redundancies are necessary.

We will keep an eye on any updates on this, but please take advice if you’re proposing redundancies over coming weeks and months.

Constructive Dismissal: Charles Gordon v J&D Pierce (Contracts) Ltd

Mr Gordon was employed for eleven years before he resigned and claimed constructive unfair dismissal. The facts leading up to his resignation were that he had received aggressive emails from his manager (using the word “bloody” and asking “what the hell is going on in your department?”) shortly before a meeting with a client. He then had an argument with his manager, during which his manager shouted at him, and Mr Gordon then refused to attend the meeting with the client.

Mr Gordon was suspended him for not attending the meeting. He was disciplined and issued with a final written warning. His manager then created a new role, more senior to Mr Gordon, and promoted another member of staff from under Mr Gordon into the new role whilst Mr Gordon was off sick. Mr Gordon put in a grievance and ultimately resigned on the basis that he had lost all trust and confidence in his employer.

J&D Pierce argued that the fact that Mr Gordon had engaged in their grievance procedure indicated that he did still have trust and confidence and so his claim should fail. The Employment Appeal Tribunal has confirmed that the fact that an employee tries to resolve a concern through a grievance procedure or an appeal does not mean they waive their right to resign and claim constructive unfair dismissal if that grievance/ appeal does not lead to resolution.

Sex Discrimination: L Chalmers v Airpoint Ltd and others

Mrs Chalmers was a HR professional, she submitted a grievance complaining about two events: a Christmas event that neither she nor the only other female employee could attend, and exclusion from an IT training course. In her grievance she stated that she felt the events “may be discriminatory” but did not assert discrimination more strongly than that. When her grievance was not upheld, she felt that her situation had become untenable, resigned and claimed constructive unfair dismissal and sex discrimination.

She claimed that she had been discriminated against on the grounds of sex, including victimisation. Although the phrase victimisation is often used in a general sense, it has a more technical definition in the Employment Tribunals. To claim victimisation, an individual must show that they did a protected act in that they raised a complaint of discrimination. Airport Ltd argued that the phrase “may be discriminatory” did not go far enough to amount to a protected act, and both the Employment Tribunal and Employment Appeal Tribunal agreed with them.

This may seem an odd result and should not be relied on too heavily. The EAT concluded that it was relevant that Mrs Chalmers had expressed other allegations very clearly and that she had HR experience. It was felt that if she believed she’d been discriminated against then she could and would have made a more clear and certain allegation of discrimination. Had she been regarded as a more hesitant or less experienced individual; her words may have been enough.

Gender Reassignment Discrimination: Taylor v Jaguar Land Rover Ltd

In 2017, Ms Taylor told her managers that she was transitioning from male to female. She started to attend work wearing female clothing and began to suffer discrimination and harassment from her colleagues up until she resigned. The harassment included referring to her as “it”, asking if she was going to have her “bits chopped off” and ridiculing her appearance. She claimed discrimination on the grounds of gender reassignment and constructive dismissal.

Jaguar Land Rover argued that Ms Taylor could not claim gender reassignment because she was not undergoing medical treatment for gender reassignment. The Employment Tribunal held that a person does not need to undergo medical treatment to be protected by the equality legislation, it is enough that they’re on a journey of transition.

Religion and Belief Discrimination: Higgs v Farmors School; Page v Lord Chancellor

Mrs Higgs is a Christian and a teacher. She had made posts on social media which showed that she had prejudiced views against the LGBTQ+ community. Following an investigation, she was dismissed due to gross misconduct. She claimed discrimination on the grounds of her religious belief.

Mr Page was a Christian and magistrate. He opposed an adoption application by a same sex couple because of his private views that children should be brought up by a mother and a father. He was reprimanded, but then went on to discuss the matter in media interviews leading to his dismissal. He claimed discrimination on the grounds of religious belief.

In both cases, it was held that although religious belief is protected, it does not allow people to express their beliefs in a way that insults or discriminates against others or infringes on their rights.

Discrimination Training: Allay (UK) Ltd v Gehlen

An employer is liable for the actions of their staff. This means that if one of their employees discriminates against an individual, then that individual can bring a discrimination claim against the employer – who may have more resources to pay out compensation that the employee. An employer can defend a discrimination claim if they can show that they took all reasonable steps to prevent the employee from discriminating. “All reasonable steps” including having a contractual clause that states the employee must not discriminate, having clear policies against discrimination and by providing regular training so that the employee is in no doubt that discriminatory behaviour is not permitted.

Mr Gehlen was employed for just under a year and dismissed on the basis of his performance. After his dismissal, he raised a grievance that he had been subjected to racial harassment by a fellow employee (P) including comments that he should go and work in a corner shop, that he drove a Mercedes ‘like all Indians’, references to his skin colour and asking why he was in the country. As well as the perpetrator, 3 other employees were aware of the harassment and didn’t report it to HR. Allay upheld part of his grievance and required P to undergo further equality and diversity training.

When Mr Gehlen brought a claim against Allay, they tried to defend on the basis that they had taken all reasonable steps to prevent P from discriminating. They had an equality policy and provided discrimination and harassment training to all staff. However, the last occasion of training had been January 2015, with the acts Mr Gehlen complained of taking place mostly in 2017. The Employment Tribunal held that Allay couldn’t rely on the defence that they had taken all reasonable steps to prevent the discrimination because the training was clearly ‘stale’ because P had forgotten it and the 3 other employees had not acted on the requirement to report discrimination. The EAT held that the test was to look at whether the steps taken were effective and whether there were further steps that could have been taken.

This means that it is not enough to have an equality policy in place, you need to make sure your staff are aware of it, understand it and have regular training on what is/ isn’t acceptable. We provide short equality courses that can be delivered in-house or over Zoom.

Vexatious Litigants: Mr Mallon v Aecom

Mr Mallon is dyspraxic. He brought a claim against Aecom for disability discrimination on the basis of a failure to make reasonable adjustments in relation to his job application. He informed them that he was unable to use the online application system and asked if he could submit an oral application instead. Despite requests, he did not tell Aecom what his condition was, what part of the application process was problematic for him or how they could assist him – other than asking for an oral application.

It was discovered that he had made 30 similar disability discrimination claims between 2017 and 2019, lost them all and in one case been ordered to pay the employer’s costs of £4,000 because his claim was not reasonable. The Employment Tribunal struck his claim out on the basis that he was a vexatious litigant. The Employment Appeal Tribunal over-ruled this and said that his claim must still be considered.

Restrictive Covenants: Quilter Private Client Advisors Ltd v Falconer

Mrs Falconer had a restrictive covenant in her contract, including a 6 month non-compete clause and a 12 month non-dealing and non-solicitation clause. She left her job after only 6 months, at which point in time her notice period was only two weeks duration (it would have increased the longer she remained in employment).

The Court held that the restrictive covenants were not enforceable. They said that it was not reasonable to restrict her for the 6 and 12 month periods stipulated because of her short notice period and her short length of service meant that she wouldn’t have built strong enough relationships with clients to take them with her.

Thank you for reading! As always, if you have any queries, please do not hesitate to contact us.

Thank you for reading! As always, if you have any queries, please do not hesitate to contact us.