Emplaw Monthly - End of July 2019
NEW ARTICLES FROM OUR AUTHORS
Podcast: on Employment Status
Podcast from Jason Galbraith-Marten QC and Chris Milsom from Cloisters, which discuss the recent spate of Employment Status cases and asks; why are they coming to prominence now and what should we look out for in the future?
Click here for podcast
Spare us the cutter -Tillman v Egon Zehnder
A useful article from Emplaw authors Moorcrofts explaining the recent Supreme Court decision about the enforceability of post termination restrictions.
Click here for more
FOCUS ON EMPLAW
With some, albeit limited, reforms proposed to the rules around spent convictions, our law card from Ortolan Legal on Recruitment/ Criminal Records Checks (DBS checks) and Spent Convictions is a useful read
Other cards in our recruitment section include. Pre-Employment Background Checks: key card and Right to Work in the UK
CONSULTATIONS AND REPORTS
Consultation on gig economy – ‘one-sided flexibility’
Further to announcements in the Good Work Plan and by the Low Pay Commission last December, BEIS has published a consultation on measures recommended by the Commission which focus on so-called “one-sided flexibility” – i.e. some low-paid casual, zero hour and gig workers and the Commission’s finding that shift cancellations and short notice of work schedules were significant problems.
The Consultation canvasses views on:
· a right to reasonable notice of work schedule
· compensation for shift cancellation or curtailment without reasonable notice
The Commission had also recommended a new right to switch to a contract which reflects normal hours worked. The Consultation does not contain this because, per BEIS, a similar proposal is in the Good Work Plan already and it “will legislate to introduce a right for all workers to switch to a more predictable work pattern.” We await that legislation.
For updated information on the Good Work Plan, please see Emplaw article:
Consultation on Single Labour Market Enforcement Body
A Single Market Enforcement Body Consultation was also issued this week – again reflecting proposals set out in the Good Work Plan and related announcements back in December.
The consultation seeks views on the case for a new single labour market enforcement body and whether this could deliver:
• extended state enforcement,
• a strong, recognisable single brand so individuals know where to go for help.
• better support for businesses to comply with the rules
• coordinated enforcement action, with new powers and sanctions . Proposals include the ability to impose civil penalties under both the gangmasters
licensing (GLAA) and employment agency standards (EAS)regimes where arrears of wages are involved at the same level as the NMW penalties
• pooled intelligence and more flexible resourcing
• closer working with other enforcement partners, including immigration enforcement, health and safety and others
Consultation on NDAs
The government has now published a consultation response on confidentiality agreements (or non disclosure agreements ‘NDAs’). The consultation ‘Confidentiality clauses: measures to prevent misuse in situations of workplace harassment or discrimination’ was launched in March 2019 and closed on 24th April.
For details of and the context of this consultation including a summary of relevant reports and actions from the House of Commons Women and Equalities Committee, the EHRC and the Solicitor’s Regulation Authority see item in Emplaw Monthly for June 2019
The response confirms that the government intends to implement many of the proposals set out in its original consultation by introducing:
New legislation aimed at improving transparency (by providing that a confidentiality clause cannot prevent disclosures to the Police, regulated health and care professionals and legal professionals and that the implications must be clearly explained in employment contracts and settlement agreements and subject to receipt of independent legal advice in settlement agreements);
New guidance (for solicitors and legal professionals responsible for drafting settlement agreements); and
New enforcement measures (for confidentiality clauses that do not comply with legal requirements in written statements of employment and settlement agreements)
The government has said it will legislate to implement the commitments in this response “when Parliamentary time allows” but, to allow for conclusion of the sexual harassment at work consultation (see below), it seems most likely that draft legislation may be delayed until next year.
Whilst we don’t have the detail of the legislation, the direction of travel is clear, and advisors would be wise to review their templates for Settlement Agreements and Contracts of Employment. Solicitors of course need to pay heed to the SRA’s Warning Notice and Practice Note.
GEO consultation on sexual harassment in the workplace
The Government Equalities Office has launched a consultation on tackling sexual harassment in the workplace.
The consultation follows on from the Women and Equalities report on sexual harassment in the workplace in July 2018 and the government’s announcement in December 2018, that it would introduce a number of actions in response including the introduction of a statutory code of practice on sexual harassment and a consultation on how to strengthen and clarify the laws in relation to third party harassment and the evidence base for introducing a new legal duty on employers to prevent sexual harassment in the workplace.
The consultation states that the government proposes to make changes in the law to address the following:
- How best to make sure employers take all the steps they can to prevent harassment from happening
- Strengthening and clarifying the law so it’s clear employers should protect their staff from being harassed by clients, customers, or other people from outside their organisation. (Readers may recall that the Equality Act 2010 s.40. contained provisions covering harassment by a third party, such as a customer or supplier, but the relevant sections were removed by the Enterprise and Regulatory Reform Act 2013 s.65)
- Whether interns and volunteers are adequately protected by current laws and
- Whether people should be given longer to take a harassment, discrimination or victimisation claim to an Employment Tribunal
The consultation seeks to gather evidence for and against a new legal duty on employers to prevent harassment in the workplace, which could be enforced by employees and, potentially, the EHRC. Another proposal in the consultation would require employers to publicly report on their harassment policies and any disputes, for example, rates of harassment complaints.
However, the government has indicated that it is against taking such a step, preferring to use a new statutory Code of Practice on harassment to place more of an onus on employers to take action, alongside an information campaign so that employers better understand what might be considered ‘all reasonable steps’ to prevent harassment. As such, this aspect of the consultation may come to nothing.
Response to consultation on pregnancy and maternity discrimination
The government has published a response to consultation concerning the extension of redundancy protection for parents returning from maternity or other parental leave: pregnancy and maternity discrimination consultation: government response.
The original consultation, launched in January 2019, sought views on 3 main issues:
• whether the redundancy protection currently available for maternity leave should be extended into a period of “return to work”. (Under Regulation 10 of the Maternity and Parental Leave etc. Regulations (1999), before making an employee on maternity leave redundant, employers have an obligation to offer them a suitable alternative vacancy (if available). This gives the woman priority over other employees who are also at risk of redundancy);
• whether similar protections should be afforded to other groups who take extended periods of leave for similar purposes, such as adoption or shared parental leave; and
• whether the steps that the government is taking to increase business and employer awareness of their rights and obligations might be improved to tackle pregnancy discrimination more effectively.
In the consultation response, the government confirms that it intends to implement most of its consultation proposals. It remains to be seen whether these changes will be implemented in full under the new Prime Minister and, if so, whether that will be in the short or longer term.
Subject to the above, in summary the government has confirmed that it will:
• ensure the redundancy protection period applies from the point the employee informs the employer that she is pregnant, whether orally or in writing;
• extend the redundancy protection period for six months once a new mother has returned to work (expected to start immediately maternity leave is finished);
• extend redundancy protection for those taking adoption leave, following the same approach as the extended protection being provided for those returning from maternity leave i.e.– it will be for six months beyond return;
• extend redundancy protection for those taking shared parental leave, taking account of the following key principles and issues:
o the key objective of this policy is to help protect pregnant women and new mothers from discrimination;
o the practical and legal differences between shared parental leave and maternity leave mean that it will require a different approach;
o the period of extended protection should be proportionate to the amount of leave and the threat of discrimination;
o a mother should be no worse off if she curtails her maternity leave and then takes a period of Shared Parental Leave;
o the solution should not create any disincentives to take Shared Parental Leave;
• establish a taskforce of employer and family representative groups. The taskforce will make recommendations on what improvements can be made to the information available to employers and families on pregnancy and maternity discrimination. It will also develop an action plan on what steps government and other organisations can take to make it easier for pregnant women and new mothers to stay in work.
Consultation on ill health related job loss and reform of statutory sick pay
The Department for Work and Pensions and the Department for Health and Social Care have launched a consultation putting forward a package of measures which encourage early and supportive action by employers for their employees with health conditions.
There are several aspects which will have important implications for employers, if they are pursued in due course. Amongst these are a potential:
- New right to request work(place) modifications for employees not covered under the current EqA duty to make reasonable adjustments provisions;
- Strengthening of statutory guidance for employers to encourage them to take early, sustained and proportionate steps to support a sick employee to return to work, before that employee can be fairly dismissed on the grounds of ill health affecting their capability;
- Reform of Statutory Sick Pay to simplify current provision; allow for flexibility during a period of return to work following sickness absence; widen eligibility to those currently below the lower earnings limit and strengthen compliance and enforcement, possibly in a similar way to enforcement of NMW;
- Improvement in employers’ and self-employed people’s access to good advice and support, ensuring that all employers understand and are able to act on their responsibilities to their employees;
- Addition to the planned day one written statement of terms for all (from 2020) of information regarding sick pay eligibility and access to leave;
- Redesigning of SSP rebates for SMEs;
- Increase in access of SMEs to OH services, whether in how these are delivered or through the provision of financial support;
- Introduction of automatic reporting of sickness absence through payroll systems (so that government has the data to be able to provide timely and targeted guidance to employers on how to manage sickness absence).
Consultation on Good Work Plan: Proposals to support families
Before leaving office,Theresa May launched a consultation presented as part of a second phase of measures to advance the Good Work Plan focussing on protecting vulnerable workers.
The proposals are in fact new and are divided into three areas as follows:
- Parental leave and pay - which sets out high level options for reforming existing entitlements with a view to helping parents to balance the gender division of parental leave
- Neonatal leave and pay which looks at proposals for a new leave and pay entitlement for parents of babies that require neonatal care after birth
- Transparency of flexible working and family related leave and pay policies which looks at whether employers should have a duty to consider if a job can be done flexibly and make that clear when advertising a role. It also considers options for requiring large employers (those with 250 or more employees) to publish their family related leave and pay and flexible working policies.
Consultation on areas 2 and 3 (neonatal and transparency) closes on 11 October and Consultation on area 1 (parental leave and pay) closes on 29th November
EMPLOYER/EMPLOYEE ADVISOR NEED TO KNOW
Gender equality roadmap
The government has published the gender equality roadmap which sets out the vision and actions to tackle persistent gendered inequalities, published alongside the case for change and Gender Equality monitor.
The road map provides the backcloth to government departmental action such as the Good Work Plan and the work of the Government Equalities Office and the Equalities Hub in the Cabinet Office.
The Gender Equality Monitor brings together a suite of indicators in a single place to monitor gender equality across the areas of:
- Economic participation and progression
- Attitudes and leadership
- Education and skills
- Crime and justice
- Health and wellbeing
Information from HSE includes useful advice
Whistleblowing: cross parliamentary group report
On 10 July 2018 the first meeting of the cross parliamentary group on whistleblowing took place and the group has just published its report, ‘Whistleblowing: the personal cost of doing the right thing and the cost to society of ignoring it’.
The report looks at whistleblowing in practice, the ‘lived experience’ of whistleblowing, the current framework and then looks at potential reforms. The group’s recommendations include:
- The term ‘whistleblower’ must be defined in law.
- The legal definition of whistleblowing should be revised and include any harmful violation of integrity and ethics, even when not criminal or illegal. The focus should be on the harm (or risk of harm) to the public.
- Whistleblower protection should include all members of the public and include protection against retaliation.
- Mandatory internal and external reporting mechanisms and protections should be adopted to include meaningful penalties for those who fail to meet the requirements across all sectors to include those currently outside of the regulations, e.g. journalists and clergy.
- A further review of compensation and how it is calculated.
- An urgent review of the barriers to justice including access to legal aid and an introduction of measures to tackle inequality of arms including protection against costs.
- Non-disclosure agreements in whistleblowing cases must be banned.
- Better regulatory framework and coordination to include the introduction of international best practice and a public awareness campaign.
- There should be an urgent review of the prescribed persons list, a more comprehensive guide to their role and measures put in place to ensure that they fulfil their responsibilities
- The introduction and establishment of an Independent Office for the Whistleblower with real power to; set standards, enforce the protections, and administer meaningful penalties to not only organisations but individuals within organisations.
Meanwhile the recent case of Simpson v Cantor Fitzgerald Europe  UKEAT 0016/18 provides a very useful overview of the current law on whistleblowing in the employment context. Emplaw has an extended summary of the case at Simpson v Cantor Fitzgerald Europe  UKEAT 0016/18
Firefighter pensions - transitional provisions in new pension schemes are age discriminatory
The Supreme Court has refused the government permission to appeal in a long-running dispute with the Fire Brigades Union over changes to firefighters’ pensions.
In December 2018, the Court of Appeal ruled that transitional provisions in new pension schemes, which kept workers closest to retirement on a more generous pension following the introduction of public sector pension reforms in 2015 were age discriminatory.
In response, the government has issued a written statement in which it confirms that it respects the Court’s decision and will engage fully with the Employment Tribunal to agree how the discrimination will be remedied. Significantly it recognises that "As ‘transitional protection’ was offered to members of all the main public service pension schemes, the government believes that the difference in treatment will need to be remedied across all those schemes. This includes schemes for the NHS, civil service, local government, teachers, police, armed forces, judiciary and fire and rescue workers". The statement confirms that it will be engaging with employer and member representatives, as well as the devolved administrations, to help inform their proposals to the Tribunal and in respect of the other public service pension schemes.
Acas annual report and accounts 2018/19
Acas has published its annual report and accounts. It notes that the Acas website had over 11 million visits last year. The most popular guidance pages were on discipline and grievance; TUPE; and disputes and problems at work. It created the following guidance last year (see page 7) :
- how to prevent discrimination based on religion or belief
- how to support neurodiversity in the workplace
- providing a job reference
- how to prevent age discrimination at work
- effective use of performance management systems for planning and monitoring training and development.
‘The Female FTSE Board Report’
The Female FTSE Board Report, produced annually by Cranfield University’s School of Management, reveals that women serve shorter tenures than men (on average, female NEDs serve 3.8 years, with men serving 5 years) and are less likely to be promoted into senior roles.
The report, which focused on the 12 months up to the end of June 2019, found:
- FTSE 100: the percentage of women on boards has increased from 29% to 32%, with 292 women holding 339 directorships. The percentage of female non-executive directors (NEDs) is at an all-time high of 38.9%, but the percentage of female executives is worryingly low at 10.9%
- FTSE 250: The percentage of female directors has risen from 23.7% to 27.3%, while the number of all-male boards has dropped to three. The percentage of female NEDs is 32.8%, but the percentage of female executive directors (EDs) is low at 8.4%
- On the FTSE 100, 48 companies have reached the target of 33% women on their boards. Kingfisher and Rightmove both have 50% female representation at board level, and Schroders is the most improved company in the top 10, with 45% women on its board, up from 27% in 2018
- On the FTSE 250, 88 companies have reached the target of 33% women on their boards, up from 59 last year
- The average tenure for female executive directors on FTSE boards is 3.3 years – half that of their male counterparts, who, on average, serve 6.6 years. The gap is slightly less at NED level, with the average tenure being 5 years for men and 3.8 years for women.
Wider diversity characteristics on the FTSE 100
- 11% of the women have a degree from Oxford or Cambridge. 76% have an undergraduate degree, and 35% of those also have a postgraduate degree.
- 13% of women directors hold a recognised financial qualification, something often associated with the criteria for a NED appointment. 22% hold an MBA degree, in which finance is a core subject.
- There is a high degree of financial literacy as 55% have held financial roles across finance, auditing, investment, treasury and banking.
- The majority of female directors are British (55%), with the remainder coming from 18 countries across the world.
- 11% are from Black or Ethnic Minority backgrounds.
- The average age of female directors is 57.3, approximately two years younger than male directors, whose average age is 59.2. The gap is slightly larger for NEDs – 57.9 for women and 61.5 for men.
Criminal record reform to help ex-offenders into work
The Ministry of Justice is proposing reforms to help get ex-offenders back into employment by amending ‘rehabilitation periods’ for shorter custodial and non-custodial sentences offences later this year.
The proposal is that some sentences of over four years will no longer have to be disclosed to employers after a specified period of time has passed. This change will not apply where offences attract the most serious sentences, including life, or for serious sexual, violent and terrorism offences.
In addition to the rule change for longer sentences over four years, the period of time for which shorter sentences and community sentences must be revealed to employers will be scaled back. The exact length of these ‘rehabilitation periods’ will be determined following discussions with stakeholders.
For more information on DRS checks and recruitment, please see the Emplaw law card Recruitment Criminal Records Checks (DBS checks) and Spent Convictions
LEGISLATION AND LITIGATION
Draft legislation for IR 35 in the private sector
At Budget 2018 the Government announced it would extend reform of the off-payroll working rules (IR35) to all sectors from April 2020. As reported in the March edition of Emplaw Monthly, their followed a policy paper and a consultation document which ran from 5th March to 28 May 2019.
The Government has now published its response to the latest consultation on the reform along with draft legislation.
Readers may recall that the off-payroll working rules have been in place since 2000 but these reforms are aimed at increasing compliance with the rules. The reforms require organisations to assess the employment status for tax (of an individual whose services are being provided via a personal service company). The organisation, agency or other third party paying the individual’s personal service company will be responsible for deducting any tax and NICs due should the assessment establish employee status. The reforms contribute significantly to HMRC’s coffers in particular the employer’s national insurance contributions which have to be paid in those circumstances.
Some points to note:
- Small companies, as defined by section 382 of the Companies Act 2006 will not be affected by the reform and will not need to determine the status of the off-payroll workers they engage
- Calls for clarity on employment status for employment and tax to be resolved before this legislation is introduced have been rejected. The consultation on Employment Status which took place after the Taylor Review of Modern Working Practices and which stated that ‘ there is a compelling case for greater clarity in this area’ closed in May 2018 and a response awaited.
- Enhancements are being made to the online Check Employment Status for Tax (CEST) tool, which are expected to be delivered before the end of 2019.
- The government will be rolling out support and guidance for affected organisations, to include education events such as webinars
The draft legislation which forms part of the Draft Finance Bill 2020 is open for technical consultation until 5 September 2019 and the government aims to introduce it into Parliament following the Budget in the autumn.
The draft legislation, explanatory note and summary response document can be found on gov.uk. https://www.gov.uk/government/consultations/off-payroll-working-rules-from-april-2020
National Insurance Contributions (Termination Awards and Sporting Testimonials) Act 2019
The bill (reported in more detail in May’s Emplaw Monthly) and which introduces employers National Insurance contributions on termination payments which are taxable for income tax and exceed £30,000 has now become law.
Originally planned to come into effect at the same time as the reform of the tax and NI treatment of PILONS in April 2018, the changes are now on track for 6 April 2020.
Whistleblowing: an overview of the law
The law on protected disclosures is set out in the Employment Rights Act 1996. Section 43A ERA contains the meaning of "protected disclosure"
Lay magistrate who expressed anti same-sex views publicly and alleged he had been disciplined because of his Christian views loses claim for victimisation and breach of the right to freedom of expression
Mr Page was a practising Christian and a lay magistrate, hearing cases in both criminal and family matters. Upon appointment, the Claimant also took the judicial oath by which he swore to "do right to all manner of People, after the laws and usages of this realm, without fear or favour, affection or ill will".
Restrictive covenants and the blue pencil test
Ms Tillman worked in a senior role in recruitment. Her written contract of employment restricted her shareholdings in any competing business to 5% during employment and also stated that, within 6 months of leaving the company, she could not ‘directly or indirectly engage or be concerned or interested in any business carried on in competition with’ the business of the Company.
Disability definition extends to someone with progressive condition
Ms Coffey, a police officer, suffers from a degree of hearing loss, which never caused her problems with her job and did not constitute a disability within the meaning of the Equality Act 2010. In 2013 she applied for a transfer to Norfolk Constabulary but was refused because on a medical test her hearing fell ‘just outside the standards for recruitment strictly speaking’.
Covert recordings at disciplinary meetings reduced unfair dismissal compensation: guidance on level of misconduct
Phoenix House is a charity which provides support to people with addiction problems. Ms Stockman, a Russian national, worked for Phoenix House as an accountant. Following a restructuring in 2013 Ms Stockman accepted an alternative post as payroll officer. She reported at all relevant to times to the Head of Finance, Mr Betha who in turn reported to Mr Lambis.
Agency Workers Regulations: no right to same hours of work as hirer’s employee
The Agency Workers Regulations 2010 (AWR) (which give effect to the Agency Workers Directive) set out at regulation 5:
National laws can prohibit carry forward of holiday accrued during sick leave where that holiday is beyond the four weeks protected under the WTD
This case is a request for a preliminary ruling concerning the interpretation of Article 7(1) if the Working Time Directive and Article 31(2) of the Charter of Fundamental Rights. Article 7 of the WT directive provides: