Emplaw Monthly - End of November 2019

NEWS

EMPLOYER/EMPLOYEE ADVISOR NEED TO KNOW

Potential employment law reforms

The recent Party conferences, Labour and Liberal Democrat manifestos and the Queen’s Speech suggest what possible employment law reforms may be on the agenda depending on who wins after the general election.  We have published this as a separate article here.

HMRC tax status test updated

On 25th November, HMRC updated its online tool for assessing employment status and the supporting Employment Status Manual . The tool  is used to help determine whether an engagement is really one of independent contractor or deemed employment for tax purposes. It is useful for employers caught by the IR35 changes expected to take effect next April and who therefore need to assess contractors who supply their services via a Personal Service Company but it is also useful for all employers who engage contractors directly to ensure  employment taxes are paid when applicable.

https://www.gov.uk/guidance/check-employment-status-for-tax

Investment Association Principles of Remuneration

The Investment Association has published its Principles of Remuneration for 2020. It has also written to Remuneration Committee chairs of FTSE 350 companies outlining the key changes and exhorting companies to exercise restraint in executive pay awards.

‘It is increasingly important that Remuneration Committees are considering the wider employee pay context and fairness of executive pay when setting pay levels and deciding on the remuneration outcomes’.

Highlights of the changes:

  • IA members are increasingly of the view that traditional long term incentive schemes are not working as effectively as they could. There is a growing body of investors who are willing to consider alternative remuneration structures 
  • Discretion on vesting outcomes: the discretion section of the Principles has been updated to include the suggestion that RemCos introduce discretion into their incentive schemes which would allow them to limit the vesting outcomes if a specific monetary value is exceeded.
  • Levels of remuneration:

‘It is essential that companies adequately justify to investors the level of remuneration paid to Executives’. The IA states that investors will look closely at how increases to basic salary or variable pay opportunity are justified and will expect RemCos to exercise restraint in relation to overall quantum.

  • Pay for Performance:

The IA members’ clients continue to seek explanations as to why remuneration pay outs are supported and require robust transparency in order to see the link between pay and performance. IA members request that strategic and personal targets and outcomes are disclosed separately.

https://www.ivis.co.uk/media/13877/principles-of-remuneration-2020-final.pdf

https://www.ivis.co.uk/media/13878/2019-letter-of-introduction-for-principles-of-remuneration-final.pdf

New regulations for solicitors from SRA

The Solicitors Regulation Authority Handbook is no longer in effect. From 25 November 2019 it is replaced by the SRA Standards and Regulations. There is useful summary information targeted at solicitors working in firms, in house and the new regime for solicitors working outside law firms.

https://www.sra.org.uk/solicitors/standards-regulations-resources/

Template policy document published by ICO 

The Data Protection Act 2018 (DPA 2018) outlines the requirement for an Appropriate Policy Document (APD) to be in place when processing special category data under certain specified conditions. These include when relying on the condition for processing employment, social security and social protection data and when relying on the public interest condition for monitoring diversity.

It is therefore important for employers to have such an APD in place and the ICO has this month published a template APD as well as  detailed guidance on special category data and updating its the Guide page on special category data

https://ico.org.uk/for-organisations/guide-to-data-protection/guide-to-the-general-data-protection-regulation-gdpr/lawful-basis-for-processing/special-category-data/

For more information on processing special data , see the Emplaw key card on data protection

CONSULTATIONS AND  REPORTS

Government Response to Women and Equalities committee report on the use of non-disclosure agreements in discrimination cases

The government response to the Women and Equalities Committee report on non disclosure agreements states that ‘it is unacceptable that cases of sexual harassment and discrimination in the workplace are covered up’.  For a summary of the background to the WEC report, please see June’s Emplaw Monthly here

The government’s response  states that it will legislate to clarify what the agreements may cover. This accords with the publication by the government in July 2019 of a response to the consultation on ‘Confidentiality clauses: measures to prevent misuse in situations of workplace harassment or discrimination’ (see the recommendations reported in July’s Emplaw Monthly here)

https://publications.parliament.uk/pa/cm201920/cmselect/cmwomeq/215/215.pdf

Hampton Alexander Review

The Hampton Alexander Review has published its fourth annual report on gender balance in senior leadership roles.

The Review shows that it has been the strongest year of progress since targets were first set in 2011:

  • FTSE 100 on track to reach the 33% target for women on boards ahead of the 2020 deadline
  • FTSE 250 made strong gains during the year and with sustained effort, will also make the 2020 deadline.

However, a step change is needed for senior leadership roles below board level. 50% of all appointments next year need to go to women or the 2020 target will not be met.

https://ftsewomenleaders.com/wp-content/uploads/2019/11/HA-Review-Report-2019.pdf

LEGISLATION AND LITIGATION

Employment Tribunals: principles for compensating pension loss

The fourth edition of the Employment Tribunals: principles for compensating pension loss has been published.

https://www.judiciary.uk/wp-content/uploads/2013/08/Principles-First-Revision-2019.pdf

https://www.judiciary.uk/wp-content/uploads/2013/08/First-Addendum-to-Presidential-Guidance-on-Employment-Tribunals-Principles-for-Compensating-Pension-Loss.pdf

CASES: 

Gray v Mulberry Company (Design) Ltd [2019] EWCA Civ 1720

Philosophical belief: claim fails on failure to show causal link and group disadvantage

This case concerns the extent of ‘philosophical belief’ for the purposes of the Equality Act 2010. Section 4 of the 2010 Act provides that religion or belief is a protected characteristic for the purposes of that Act. Section 10 provides:

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Shanks v Unilever Plc & Ors [2019] UKSC 45

Employee inventor entitled to compensation for invention which was of ‘outstanding benefit’ to the employer

Section 40 of the Patents Act 1977 reads:

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Case Summary Tag: 

Bessong v Pennine Care NHS Foundation Trust [2019] UKEAT 0247/18

Employer not liable for third party harassment

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South Western Ambulance Service NHS Foundation Trust v King [2019] UKEAT 0056/19

Time limits: victimisation - conduct extending over a period

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Cadent Gas Ltd v Singh [2019] UKEAT 0024_19

Dismissal for Trade Union activities and motivation of person other than decision maker attributable to employer- a Jhuti exception

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Case Summary Tag: 

Badara v Pulse Healthcare Ltd [2019] UKEAT 0210/18

Employee with right to work – a contractual requirement to provide evidence of right to work must be seen in that light

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Case Summary Tag: 

Curless v Shell International Ltd [2019] EWCA Civ 1710

Leaked email covered by legal advice privilege and not tainted by overheard social conversation

The issue in this appeal concerned whether the ET was correct to order on a preliminary hearing that two paragraphs of the disability discrimination and victimisation claim of Mr Curless should be struck out on the ground that they referred to respectively an email and a conversation in respect of which Shell was entitled to claim legal advice privilege (LAP).

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Lopez Ribalda v Spain [2019] ECHR 752

Employer was able to use covert surveillance for defined purpose of investigation

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Associazione Avvocatura per i diritti LGBTI [2019] EUECJ C-507/18

Advocate General gives his opinion that homophobic comments made on radio could be in breach of the Equal Treatment Directive

The recitals of Directive 2000/78 state, in particular:

‘(1) … the European Union is founded on the principles of liberty, democracy, respect for human rights and fundamental freedoms, and the rule of law, principles which are common to all Member States and it respects fundamental rights …

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Christa Ackroyd Media [2019] UKUT 326

BBC presenter’s contract covered by IR35

The intermediaries legislation is contained in sections 48 to 61 of the Income

Tax (Earnings and Pensions) Act 2003 (“ITEPA 2003”). The key provision is section  49, which provides, so far as relevant, as follows:

“(1) This Chapter applies where —

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Hancock v Ter-Berg & Anor [2019] UKEAT 0138_19

The ‘likely to succeed’ test for interim applications extends to employment status

Mr Ter-Berg , a dentist, entered into an ‘associate agreement’ with a dental practice called Simply Smile Manor House Limited (the first respondent to the appeal in this case). Mr Hancock was one of the directors of Simply Smile. Mr Ter-Berg was granted a licence and authority to carry on the practice of dentistry at the premises of Simply Smile.

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