Out-Law / Your Daily Need-To-Know

What to watch out for in the coming weeks in UK employment law.

Changes in May/ June:

  • Workers became entitled to H&S detriment at work protection
  • ACAS report to BEIS on fire and rehire published
  • BEIS confirms single enforcement body for worker rights
  • BEIS confirms additional powers for TU Certification Officer
  • Treasury reject furlough extension

  • Coronavirus measures

    Coronavirus Job Retention Scheme (Furlough)

    The Chancellor in his Spring Budget has extended furlough until the end of September 2021. Employees will continue to receive 80% of their current salary for hours not worked. There will be no employer contributions beyond National Insurance contributions (NICs) and pensions required in April, May and June. From July, the government will introduce an employer contribution towards the cost of unworked hours of 10% in July, 20% in August and 20% in September, as the economy reopens. HMRC has published updates to multiple guidance documents contained within its Coronavirus Job Retention Scheme collection and the Treasury has issued a new (seventh) direction in respect of the period 1 May to 30 September 2021. The Times reported in June 2021 that despite calls from business leaders to further extend furlough these have been rejected.

    Effective now

    Gender pay gap reporting and furlough

    The EHRC has confirmed that enforcement action against employers failing to report their gender pay gap will not start until 5 October 2021. However, the EHRC encouraged employers to report their gender pay gap data for 2020/21 on time if they can. Government Equalities Office information on the Gender Pay Gap confirms how periods of furlough will be addressed. See the section on when to exclude full-pay relevant employees in the note on data which must be gathered.

    Effective now

    Right to work checks during the COVID-19 pandemic

    The adjusted right to work checks introduced by the Home Office during the COVID-19 pandemic were due to come to an end on 20 June 2021 but this deadline has now been extended. The temporary COVID-19 adjusted right to work checks will now end on 31 August 2021, and from 1 September 2021 employers will revert to face to face and physical document checks as set out in legislation and guidance. Home Office guidance has been updated.

    1 Sepember 2021

  • Confirmed changes

    Brexit – UK/EU Trade and Cooperation Agreement

    This agreement governs the UK-EU trading relationship from 1 January 2021 and provides that employment rights are not to be reduced from current levels in a way that impacts on trade. This means that the UK will need to maintain the standards in its legislation as they stood in December 2020, when harmonised to a large extent with EU law. Future departures from these standards will result in the re-balancing mechanisms being applied. This makes it highly unlikely that we will see the 'bonfire of employment rights' which some had predicted, including sweeping changes to TUPE or removal of working time protection as these areas could well be seen to affect trade or investment.  Although it had been widely reported that BEIS was reviewing EU worker protections, BEIS has now confirmed that this will not go ahead. In June 2021 BEIS confirmed that it was “absolutely” the intention not to degrade workers’ rights in the post-Brexit economy.

    Commitments in the Northern Ireland protocol to equality protection may lead to continued interpretation of CJEU decisions being applied there, although not across GB.

    More information is available in Pinsent Masons' resources hub on Brexit

    Effective now

    Immigration in 2021

    More information coming soon about how immigration law in the UK will change in 2021.

    Effective now

    National living wage increases

    The following increases were effective from 1 April 2021:

    • national living wage will apply to individuals aged 23 and over and will rise from £8.72 to £8.91;

    • national minimum wage changes include: age 21 to 22 rate increases from £8.20 to £8.36/ age 18 to 20 rate increases from £6.45 to £6.56/ age 16 to 17 rate increases from £4.55 to £4.62/ apprentice rate increases from £4.15 to £4.30.

    Effective now

    ET compensation limit increases

    The following annual increases were effective from 6 April 2021:

    • a week's pay - £544 (currently £538)

    • unfair dismissal compensatory award - £89,493 (currently £88,519)

    The Vento bands for injury to feelings awards are now:

    • £900 to £9,100 for the lower band

    • £9,100 to £27,400 for the middle band

    • £27,400 to £45,600 for the upper band

    • £45,600 and above for the most exceptional cases

    Effective now

    Off-payroll working in the private sector

    Where an individual contracts through a personal service company, the liability for making the employment status assessment and applying PAYE no longer rests with the PSC (effective 6 April 2021) but shifts up the chain to the end user or the agency or other intermediary, if there is one.

    Effective now

    Statutory payment annual increases

    From 12 April 2021 the following increases applied:

    • statutory sick pay - £96.35 (currently £95.85)

    • statutory maternity pay - £151.97 (currently £151.20)

    • statutory paternity pay - £151.97 (currently £151.20)

    • statutory shared parental pay - £151.97 (currently £151.20)

    • statutory adoption pay - £151.97 (currently £151.20)

    Effective now

    Workers to get H&S detriment protections

    Workers will have the right not to be subjected to any detriment by their employer for leaving, or refusing to return to, their workplace or for taking steps to protect themselves both in circumstances of danger which the worker reasonably believes to be serious and imminent.

    Effective now

    Trade union regulator to be modernised

    BEIS announced plans to implement the remaining parts of the Trade Union Act 2016 which give the Certification Officer additional powers. Included in the plans are powers for the Certification Officer to:

    • respond to third party concerns that a TU may have breached its statutory duties. This means that employers (not just TU members) could ‘report’ a TU to the regulator, in certain specific circumstances
    • initiate their own investigation if a breach is suspected
    • apply financial penalties to TUs of up to £20,000 where the most serious breaches occur

    The Certification Officer will also be funded by a levy on the organisations it oversees (capped at 2.5% of a TU’s annual income although smaller organisations will be exempt).

    April 2022

    New single enforcement body for employment rights

    BEIS confirmed that it will go ahead with its proposal for a new single enforcement body with a remit to tackle modern slavery, enforce the minimum wage and protect agency workers. The new body will be a “one stop shop” that will replace the Gangmasters and Labour Abuse Authority, the Employment Agency Standards Inspectorate and HMRC’s National Minimum Wage Enforcement. The new body will also have a new ability to ensure vulnerable workers get their holiday pay and statutory sick pay without having to go through an employment tribunal process. The creation of this new body will most likely need to await the Employment Bill (see below). Read more: UK creates workers’ watchdog to protect and enforce rights

    2022/ 2023

    Scottish disclosure – regime overhaul

    Changes to disclosure legislation include replacing the four existing levels of disclosure and the 10 different associated products with two main 'levels'. Criminal offences are also created for individuals who carry out or attempt to carry out a “regulated role” without being a PVG Scheme member. A parallel offence is in place for any organisation that offers a 'regulated role' to an individual without first establishing that they are a PVG Scheme member by carrying out a Level 2 search. The regulated role is a new concept which replaces 'regulated work'.

    TBC

    Enterprise Act 2016 - changes to shop workers' rights

    Schedule 5 of the Enterprise Act 2016 will amend the Employment Rights Act 1996 (ERA), and will strengthen shop workers rights in relation to Sunday working.

    TBC

  • Proposals, consultations and inquiries

    Low Pay Commission consultation 2021

    The Low Pay Commission is seeking evidence on the effects of the National Living Wage and National Minimum Wage to inform its 2022 rate recommendations. The LPC is seeking evidence on the effects on employers and workers of recent increases, including views on the economic outlook in light of the pandemic. In particular, they are looking for views on:

    • the current central projection for a proposed April 2022 NLW rate increase to £9.42 (with a likely range of 7 pence above or below); and

    • the current central projection for a proposed April 2024 NLW rate increase to £10.33 (with a likely range of 23 pence above or below). The NLW age threshold is also due to be reduced to 21 by 2024.

    Consultation closes on 18 June 2021

    Equality and diversity

    In December 2020, Liz Truss, Minister for Women & Equalities set out a new equality strategy with a move towards a focus on social mobility. The impact of this initial strategy statement will become clearer as the government further develops its position and businesses and interest groups consider and make public their response.

    Employment Bill

    In the Queen's speech in December 2019 the government announced its intention to bring forward an Employment Bill containing the following provisions:

    • creating a new single enforcement body for employment rights (see above);

    • offering greater protections for workers (following the 2019 Good Work Plan consultation on a single enforcement body which encompasses tribunal/ court practice and procedure; NMW, sick pay; health & safety, although the government is yet to formally respond);

    • ensuring that tips left for workers go to them in full;

    • introducing a new right for all workers to request a more predictable contract. This follows the 2019 Good Work Plan consultation on one-sided flexibility in the gig economy which encompassed reasonable notice of work schedules and compensation for cancelled shifts, although the government is yet to formally respond;

    • extending redundancy protections to prevent pregnancy and maternity discrimination so that women have a preferential right to any suitable available vacancy while pregnant or on maternity leave and for six months on their return. There will be new adoption leave and shared parental leave redundancy protections too. This follows the government's response to the 2019 Good Work Plan consultation on pregnancy and maternity discrimination; 

    • allowing parents 12 weeks neonatal pay and leave. This follows the government's partial response to the 2019 Good Work Plan consultation on proposals to support families; 

    • introducing an entitlement to one weeks leave for unpaid carers;

    • subject to consultation expected this year, the Bill will make flexible working the default unless employers have good reason not to.

    There are also general references to the following objectives although no detail is provided:

    • protecting and enhancing workers’ rights as the UK leaves the EU; and

    • building on existing employment law with measures that protect those in low-paid work and the gig economy.

    It was reported in February 2021 that the Bill would be delayed until at least the end of 2021. There was only a vague reference in the May 2021 Queen’s Speech to proposals that “will be brought forward to create and support jobs and improve regulation” but no specific mention of the Employment Bill. In May 2021 BEIS wrote to Parliamentary Committees that the Employment Bill “will be introduced when the time is right, not while the pandemic is ongoing and continuing to affect the economy and the labour market in sometimes unpredictable ways”

    End 2021 (unlikely)/ 2022

    Flexible working

    As employers work through proposals for hybrid working arrangements, both employers and employees are seeking to build in flexibility to new arrangements. There are proposals in the Employment Bill to make flexible working the default unless employers have a good reason for this not to apply, but we don’t know what that will look like yet. The government restarted the Flexible Working Taskforce in February 2021. The Taskforce brings together business, organisations such as the CIPD and government to consider the issues and make proposals. Consultation is expected this year.

    2021 for consultation

    Carers’ Leave

    The government consulted on its proposal for a new right which would allow qualifying employees to take a week of unpaid leave each year to provide care. The response is awaited

    2021 for consultation response

    Good Work Plan: protecting continuous service

    The government agreed in the 2018 Good Work Plan to legislate to increase the break in employment needed to break continuity of employment from one week to four weeks, allowing more employees to gain access to employment rights. In June 2021 BEIS restated this commitment. It is likely to appear in the Employment Bill.

    End 2021 (unlikely)/ 2022

    Good Work Plan: proposals to support families

    The government has partially responded to 2019 three chapter consultation on:

    • reforming parental leave to achieve greater balance (no formal response),

    • entitlements for parents of babies requiring neo-natal care (response given), and

    • transparency relating to flexible working hours and family-related pay & leave (no formal response).

    Aspects of these will be introduced in the Employment Bill (see above).

    2021 for consultation response

    'Health is everyone’s business'

    A 2019 government consultation aimed at making it easier for disabled people to stay in work and find work; and consulted on proposals to reduce ill health-related job loss. New statutory guidance is likely, and SSP may change to make phased returns easier. The government has said that it will respond shortly.

    2021 for consultation response

    References

    The government has committed to consulting on a new legal obligation for employers to provide basic references for all employees to avoid the threat of no reference being used to force a settlement.
    2021 for consultation

    Non-compete clause consultation

    The government consulted on whether non-compete clauses should be unenforceable or enforceable only when compensation is provided during the term of the clause. Consultation closes on 26 February 2021.
    2021 for consultation response

    Exclusivity clauses in contracts of employment consultation

    The government consulted on a proposal to extend the ban on exclusivity clauses beyond zero hours contracts, to contracts where the workers’ guaranteed weekly income is less than the Lower Earnings Limit, currently £120 a week. Consultation closed on 26 February 2021.
    2021 for consultation response

    Human rights reviews

    The government has launched a review which will consider how the Human Rights Act 1998 is working in practice and whether any change is needed. The Parliamentary Joint Committee on Human Rights has also launched an inquiry into freedom of expression. It is wide ranging but will consider what “obligations does an employee have to their employer when expressing views on social media, and to what extent can, and should, employers respond to what their employees say on these platforms?”
    2021 for review/ inquiry outcome

    Disability employment gap

    The Parliamentary Work and Pensions Committee launched an inquiry into the disability employment gap. Disability pay gap reporting may attract greater attention but in May 2021 the government said that it rejects proposals for disability pay gap reporting favouring a voluntary reporting framework.
    2021 for inquiry outcome

    Ethnicity pay gap reporting

    The government consulted on ethnicity pay gap reporting in 2019 and a response is awaited. This is not the same issue as reporting on Gender Pay Gaps. It throws up particular problems, for example, what is monitored in terms of categorisation of ethnicity. In May 2021 the government noted that it is is still considering its response which will be published “in due course” as it is encountering “genuine difficulties in designing a methodology that will produce accurate figures that facilitate analysis, interpretation and meaningful action”.
    2021 for consultation response

    Sexual harassment in the workplace

    The government's 2019 consultation asked:

    • whether there should be a specific duty for employers to prevent harassment, and what more could be done to ensure that employers do take all reasonable steps to prevent harassment, including consideration of whether transparency on figures is desirable;

    • whether the current regime provides protection from harassment by third parties; and whether more is required in terms of protecting interns and volunteers.

    • whether the three-month time limit for bringing harassment claims before an ET should be extended.

    Although a response is awaited, in January 2020 the government took forward its pledge to commission a survey to gather data on the prevalence of sexual harassment.
    2021 for consultation response

    Consultation on confidentiality clauses (NDAs)

    The government's 2019 consultation asked a range of questions in relation to the use of employee confidentiality clauses. The consultation sought responses on any NDA clause in an employment context, regardless of whether it is in a settlement agreement, contract of employment or elsewhere. It covered a variety of matters including:

    • whether disclosures to the police and other, as yet unspecified, organisations should always be permitted;

    • how to ensure clarity for workers as to the limits of confidentiality clauses;

    • appropriate enforcement of any limits set.

    The government's 2019 response confirms that NDAs are not to be used to prevent disclosures to policy, healthcare and legal professionals. Transparency on the extent/ effectiveness of such clauses will also be required. Draft legislation is awaited.
    2021/ 2022 for draft legislation

    Domestic abuse and workplace support

    In 2020 the government issued a call for evidence on how employers can support survivors of domestic abuse at work. Questions included what practical circumstances arise in relation to domestic abuse/ work and what workplace support can be offered? A response is awaited.
    2021 for consultation response

    Good Work Plan

    The government committed to take "forward virtually all the recommendations" in the 2017 Taylor Review on modern employment practices in its 2018 Good Work Plan. Many of the proposals have been implemented or have been signaled for inclusion in the Employment Bill (see above). Outstanding proposals include:

    • extending the time required to break a period of continuous service - from one week to four weeks; and

    • aligning the employment status frameworks for the purposes of employment rights and tax.

    2022

    EU Pay Transparency Directive

    In March 2021 the EU proposed a Directive aimed at ensuring that the right to equal pay is upheld across the EU. It would establish pay transparency standards to make it easier for workers to claim their right to equal pay. If adopted Member States would have two years to implement it in national law.

    2024. Would not be implemented in the UK (although UK employers with sectoral compliance issues and/or business in more than one EU jurisdiction may well need to meet the terms of any Directive)

    Disclosure changes in England and Wales

    The Ministry of Justice announced forthcoming changes to the time it takes for certain convictions to become spent. Many periods will be reduced so that they are no longer automatically disclosed on employment checks.
    TBC

    Overhaul of whistleblowing legislation

    BEIS has confirmed its intention to review the whistleblowing framework once there has been “sufficient time to build the necessary evidence of the impact of the most recent reforms”. All Party Parliamentary Group (APPG) on whistleblowing previously set out 10 recommendations for change, including focusing the legal definition of whistleblowing on the harm, or risk of harm, to the public. The APPG said a mandatory internal and external reporting mechanism should be implemented, and recommended the establishment of an Independent Office for the Whistleblower as a regulatory body.
    TBC

    EU Whistleblowing Directive

    The EU adopted a Directive to protect whistleblowers who report breaches of EU law in a variety of areas including public procurement, financial services, money laundering, product and transport safety, nuclear safety, public health, and consumer and data protection. It does not appear that the government intends to transpose the directive into UK law and it abstained from voting on the Directive. The UK already has significant protections in place, although the All Party Parliamentary Group on Whistleblowing thinks the UK needs to do more.
    Not expected to be implemented in the UK (although UK employers with business in more than one EU jurisdiction may well need to meet the terms of the Directive).

    Dismissal and re-employment

    This private member's bill seeks to prohibit employers from dismissing and re-engaging employees "for the purpose of diminishing the terms and conditions of employment". Although it is scheduled for a second reading (date to be announced), private member's bills often do not make it through Parliament. However, BEIS engaged ACAS to investigate how fire and rehire has been used and ACAS reported to the government during February 2021. The report was published in June 2021. ACAS also plans to “produce further guidance that encourages good workplace practices when negotiating changes to staff contracts”. In June 2021 BEIS confirmed that it does not believe “heavy-handed legislation” will be needed.

    TBC

  • Cases pending

    Whether making offers directly to union members is an unlawful inducement Dunkley v Kostal

    The Court of Appeal decided that offers made direct to employees were not unlawful inducements to move away from collective bargaining.
    Appeal to the Supreme Court heard on 18 May 2021. Read more: Landmark collective bargaining case heard by Supreme Court
    November 2021

    Voluntary overtime and holiday pay calculations Flowers and others v East of England Ambulance Trust

    The Court of Appeal held that voluntary overtime should be included in holiday pay calculations.
    Appeal to the Supreme Court was to be heard on 22 June 2021 but the case has been removed from listings. It is understood that this is against the background of an NHS England deal on holiday pay.
    n/a

    Backdated holiday pay claims Chief Constable of the Police Service of Northern Ireland v Agnew

    The Court of Appeal (Northern Ireland) decided that a gap of more than three months in a 'series of unlawful deductions' from holiday pay did not break the series of deductions.
    Appeal to the Supreme Court was to be heard on 23-24 June 2021 but the case has been removed from listings, which is likely to be because of discussions between the parties to resolve the case.
    n/a

    Holiday entitlement for term-time/ part-year workers Brazel v The Harpur Trust

    A decision from the Court of Appeal, which the court itself described as "surprising", gave some term-time or part-year workers a favourable position.
    Permission to appeal to Supreme Court granted – awaiting hearing date.
    2022