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Emplaw Monthly - End of July 2020

NEW FROM OUR AUTHORS

Cloisters Toolkit: Returning to work in the time of Coronavirus

Updated as of 17th July  Cloisters' expert employment barristers have produced an invaluable and detailed online guide, Returning to Work in the Time of Coronavirus, which explores the critical legal issues which arise as businesses re-open.

Read here

Webinar: Overview Of What Is A Redundancy And Who Is Redundant Post Covid-19

On demand free webinar from Emplaw authors Gowling WLG providing an overview of what is a redundancy and who is redundant post Covid-19, including how to avoid the pitfalls.

Read here

NEWS

EMPLOYER/EMPLOYEE ADVISOR NEED TO KNOW

UK Points Based immigration system: further details.

The government has published further details on the UK’s points based immigration system when the UK leaves the EU on 31 December 2020 when freedom of movement will end.  From that time EU and non-EU citizens wishing to come to and live in the UK from 1 January 2021 will need to demonstrate their right to be in the UK and the entitlements they have. All applicants will receive written confirmation of their immigration status.

On 13th July 2020, the government  issued Guidance on New immigration system: what you need to know with links to more detailed information  The result is that from 1st January 2020, EEA and non EEA nationals coming to the UK to work/study will require a visa (Irish citizens will continue to be able to enter and live in the UK as they do now). Employers who do not already have a sponsor licence will need one in order to employ a foreign national and will usually need to pay the Immigration Skills Charge (ISC) .

The main pillars of the changes to the immigration system currently proposed are:

- Removal of the cap for Restricted Certificate of Sponsorship which will result in there being no limit on the numbers of skilled workers who can come to the UK (the current limit is 20,700 per annum).

- Abolishing the Resident Labour Market Test (RLMT) -  which has been seen as a barrier  to engaging foreign nationals where a settled national has the same skills/experience for a role.However, sponsors must still be seeking to fill a genuine vacancy which meets the skill and salary thresholds of the new route.

- Expansion of the Standard Occupation Code list (SOC) to including roles equivalent to A level (RQF level 3) and no longer Degree (RQF level 6).Workers will not need to hold a formal qualification. It is the skill level of the job they will be doing which is important.

- Minimum salary threshold will be £25,600 (employers may need to pay more depending on market rate or general rate depending on which is higher). Whilst there is no specified route under the new system for low skilled workers (other than for students and, from Summer 2021 international students who have completed a degree in the UK), those earning less than the threshold, may still be able to apply by ‘trading’ points on specific characteristics against thier salary.

- As to how points can be traded, skilled worker applicants need to earn a minimum of 70 points for a Tier 2 visa. A basic 50 points will be earned as follows:10 for speaking  English to an acceptable standard,  20 for the skill level of the job being  Alevel or equivalent or above,  and 20 for having an offer of a job from a licensed sponsor. They must obtain a further 20 “tradeable” points through a combination of points for their salary, a job in a shortage occupation or a relevant PhD. If the applicant is paid the higher of the general salary threshold of £25,600 or the “going rate” for their particular job, they will get the extra 20 points. Those paid lower than the threshold (but not less than  £20,480 per annum)  may earn the extra points if they have a job offer in a specific shortage occupation or a PhD qualification relevant to the job.

- Seasonal Workers - the Further Details statement does not include information on the Seasonal Workers pilot for agriculture which will conclude at the end of 2020. The statement confirms that the pilot will be fully reviewed, with a decision on whether it will continue under the Points-Based System being made later this year.

-Health and Care visa. This was previously announced as the NHS visa and the Further Details statement provides that it will form part of the Skilled Worker route. Applicants must have a confirmed job offer in health professions specified in Annex D of the Further Details statement  for a skilled role within the NHS, social care sector or one of the NHS-commissioned service providers. They must also meet requirements of the Skilled Worker route, including the relevant skill, language and salary thresholds.

The details statement says that eligible applicants will benefit from faster application processing times, reduced application fees, dedicated support through the application process, and an exemption from the Immigration Health Surcharge (IHS) for them and their dependants.

There are some useful tables illustrating the various criteria for skilled work entry in the Further Details document.

For more information see  the Emplaw card Employing EU citizens in the UK in the context of Brexit

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/899755/UK_Points-Based_System_Further_Details_Web_Accessible.pdf

New Acas podcast: Black Lives Matter: the workplace

Acas has published a new episode in its podcast series, discussing the role of the Black Lives Matter movement in the workplace. It looks at how racism and inequality are experienced and persist, what white people need to do to be part of change, and what organisations and leaders need to do to be responsible for change

https://shows.acast.com/acaspodcast/episodes/black-lives-matter-the-workplace

Changes to criminal records disclosure scheme

The government has laid a Statutory Instrument to amend the Police Act 1997 to change the filtering rules that govern what is automatically disclosed through standard and enhanced criminal records certificates issued by the Disclosure and Barring Service (DBS).

The new legislation will remove the requirement for automatic disclosure of youth cautions, reprimands and warnings and remove the ‘multiple conviction’ rule, which requires the automatic disclosure of all convictions where a person has more than one conviction, regardless of the nature of their offence or sentence.

https://www.gov.uk/government/news/government-plan-new-changes-to-criminal-records-disclosure-regime

REPORTS AND CONSULTATIONS

MoJ consults on courts' powers to depart from retained EU case law post-transition period

This consultation seeks views on the use of the power in 6(5A) of  the European Union (Withdrawal) Act 2018, (“the 2018 Act”)   (as amended by the European Union (Withdrawal Agreement) Act 2020 (“the 2020 Act”)   which enables the Government to:

• designate additional courts or tribunals with the power to depart from retained EU case law;

• specify “the extent to which, or circumstances in which,” the court or tribunal “is not to be bound by retained EU case law”;

• set out the test which a relevant court or tribunal “must apply” in deciding whether to depart from any retained EU case law;

• specify considerations which “are to be relevant” to the court or tribunal in coming to such decisions.

By way of background, retained EU case law broadly comprises the principles and decisions laid down by the Court of Justice of the European Union, in relation to EU law which is retained under the 2018 Act as at the end of the Transition Period, as modified in UK law.

Under the 2018 Act only the UK Supreme Court or the High Court of Justiciary, (in Scotland)  have jurisdiction to depart from retained EU case law.

This consultation from the Ministry of Justice, seeks views on the use of the powers set out above in respect of the lower courts and closes on 13th August 2020.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/896830/retained-eu-case-law-consultation.pdf

Protect publishes Silence in the City 2 on whistleblowers in financial institutions

Protect has published a report looking at whistleblowing in the financial services sector.

Summary findings are that there appears to be more awareness and trust by employees in internal arrangements but there is much to suggest that changes are only cosmetic. 7 in 10 of those raising concerns were victimised for doing so. 

Most financial services whistleblowers (47%) tend to be new employees with managerial responsibilities. 64% raised their concerns whilst in employment with their current employer. The concerns raised were wide ranging and included breaches of FCA regulations, theft, data protection breaches and incidents of discrimination and harassment.

78% reported that the concerns were recurring and 57% reported that the problem was organisation-wide.

https://s3-eu-west-1.amazonaws.com/public-concern-at-work/wp-content/uploads/images/2020/06/19125704/Protect-SILENCE-IN-THE-CITY-2-2020.pdf

Government response to BEIS committee’s inquiry into Thomas Cook collapse

BEIS has published the government’s response to the BEIS committee inquiry into the Thomas Cook collapse, which raises a couple of corporate governance issues.

New regulator ARGA

The government shares BEIS’s  vision of a new and more powerful regulator, and is committed to putting ARGA on a statutory footing. The response states that the government ‘will bring forward legislation as soon as Parliamentary time allows’. The government intends to give the new regulator stronger powers to scrutinise and enforce compliance with relevant reporting requirements on executive pay and corporate governance as part of an expanded corporate reporting review function.  

Executive pension contributions

On pension contributions and executive pay, the government references the Corporate Governance Code provision, in force from the start of 2019, requiring that “pension contribution rates for executive directors, or payments in lieu, should be aligned with those available to the workforce”. As a result, more than 30 FTSE 100 companies made significant changes to their pension policies, in particular in relation to pension contributions for newly appointed directors.  The government notes that in 2020, a significant number of companies will be preparing new remuneration policies, which will then be subject to a binding shareholder vote. The government therefore expects to see significant further progress from companies this year, in particular, in aligning contribution rates for their existing directors with those for their wider workforce.  

Bonus scheme arrangements

The committee recommended that bonus scheme arrangements should always use measures that are pre- defined and not ambiguous, or open to interpretation or favourable adjustment. The schemes should be designed to address a balanced assessment of company objectives, rather than to focus on one aspect of company health to the detriment of another. Particular care should be taken in the design of bonus arrangements to avoid any potential for “gaming” the system merely to meet targets and generate bonuses.

The government agreed that using a range of financial, non-financial and strategic measures can help ensure that bonus targets are aligned with how the company will deliver value over the long-term in line with company purpose. It also agreed that metrics need to be reliable and credible to satisfy shareholders. The government noted that the Financial Reporting Council already takes a close interest in bonus arrangements and target setting. Principle P of the Code, for example, states that remuneration policies and practices should be designed to support the company’s strategy and promote long-term sustainable success. As part of this requirement, companies' remuneration policies are expected to disclose the financial and non-financial performance indicators used to measure their annual bonus and Long-Term Incentive Plan awards, and how they are aligned to the company’s long-term strategy.  

As part of the regulator’s new identity and focus, it is envisaged that it will engage at a more senior level in a wider and deeper dialogue with UK investors and other users of financial information on corporate governance and corporate reporting, including the executive pay framework. 

Clawback provisions

The committee also recommended that provisions on clawback need to be strengthened and the scope of clawbacks extended, in statute if necessary, to achieve the principles of natural justice. The committee recommended that all future performance bonus arrangements established are required to include suitable clawback provisions for a suitable period. These clawback provisions need to be enforceable and cover all elements of the bonus. It is not acceptable for large bonuses to be paid, for it to subsequently be clear that the terms of the bonus award were not met, but for it not to be possible, legally, to clawback the bonus.

The government agreed that directors’ contracts should include malus and clawback provisions allowing companies to withhold remuneration, or recover it if it has already been paid, and that care should be taken to ensure that the provisions are capable of being enforced in practice.

The UK Corporate Governance Code already states that directors’ remuneration policies should “include provisions that would enable the company to recover and/or withhold sums or share awards and specify the circumstances in which it would be appropriate to do so." The Code’s provisions apply on a comply or explain basis to premium listed companies, but Government expects companies to act on this provision and for shareholders, where necessary, to use their binding vote on remuneration policies to ensure that companies have robust malus and clawback arrangements in place. The government noted that research undertaken by Deloitte in 2018 into FTSE350 remuneration policies suggests that 90% of companies operate malus and clawback provisions. It states that this is encouraging, but further improvement is needed. The government agrees that there should be no reward for failure and is committed to improving incentives to attack the problem. 

D&I

On D&I, the committee noted that directors should not be appointed to the board solely on the basis of one particular background or area of expertise. It recommended that the FRC works with others to provide improved guidance on this aspect of diversity in the context of board membership. 

BEIS’s predecessor Committee also recommended that the Government should legislate to ensure that all FTSE 100 companies and businesses publish their workforce data, broken down by ethnicity and by pay band. 

The government strongly agreed with the Committee’s views and is committed to promoting business leadership diversity and inclusion. Companies should embrace diversity throughout the organisation including at board level, senior leadership and throughout the talent pipeline. A diverse board can lead to cultural change in the boardroom: it offers greater challenge to proposed decisions, reduces the level of “group think”, produces a broader spectrum of ideas and is potentially more ‘risk aware’. 

https://committees.parliament.uk/publications/1793/documents/17467/default/

LITIGATION AND LEGISLATION

Survey of employment tribunal applications

The government has published its survey of employment tribunal applications 2018/19.

Changes since 2013 include:

  • employment tribunal cases with greater, earlier Acas involvement were more likely to reach a settlement
  • more claimants and lawyers used representatives for day-to-day handling of the case and at the tribunal hearing
  • settlement amounts increased across all case tracks
  • amounts awarded by tribunals increased.

https://www.gov.uk/government/publications/survey-of-employment-tribunal-applications-2018

COVID-19 materials

For a comprehensive round up of information and how rules and regs have developed since March, please see Emplaw Monthly - End of March and  Emplaw Monthly- End of April and Emplaw Monthly - End of May and Emplaw Monthly - End of June

General Updates

The Health Protection (Coronavirus, Restrictions) (No. 2) (England) Regulations 2020

These revoke the Health Protection (Coronavirus, Restrictions) (England) Regulations 2020 which came into force on 26th March and the subsequent four sets of amending regulations and which prohibed people from leaving the place they live except for very limited purposes and banning public gatherings of more than two people.

These new regulations further relax some of the previous national restrictions from 4th July but keep others in place. For example, Regulation 4 and Schedule 2 maintains the closure of nightclubs and any other venues which opens at night and, has a dance floor or other space for dancing by members of the public. Regulation 5 meanwhile prohibits gatherings of more than 30 people which take place in a private dwelling although gatherings of more than 30 people are permitted when reasonably necessary for work, voluntary or charitable services. 

The instrument provides for fixed penalty notices for breach of the Regulations of £100, reduced to £50 if paid within 14 days. If a person has already received a fixed penalty notice, under the regulations or those which it revokes, the amount of the fixed penalty is £200, doubling on each further repeat offence up to a maximum of £3,200 

https://www.legislation.gov.uk/uksi/2020/684/contents/made

https://www.legislation.gov.uk/uksi/2020/684/pdfs/uksiem_20200684_en.pdf

The Health Protection (Coronavirus, Restrictions)(England)(No.3) Regulations 2020

These regulations enable a number of public health measures to be taken to reduce the public health risks posed by the spread of Covid-19. The Regulations will came into force at 12.01 am on 18 July and expire at the end of 17 January 2021.

The regulations give Local Authorities powers relating to the control and prevention of coronavirus. They can be used if there is a serious and imminent threat to public health. Any direction issued must be necessary and proportionate to prevent, protect against, control or provide a public health response to the incidence or spread of coronavirus in the local authority’s area.

The territorial extent of this instrument is England and Wales.

https://www.legislation.gov.uk/uksi/2020/750/contents/made

FCO travel advice

The Foreign & Commonwealth Office has updated its guidance for British people travelling overseas during the Covid-19 pandemic.

https://www.gov.uk/guidance/travel-advice-novel-coronavirus

IES survey on effect of Covid-19 on low paid workers

The Institute for Employment Studies has published a briefing note analysing the impact of Covid-19 on low paid employees. The detailed analysis finds that the crisis is having far greater impacts on low paid workers than on others.

https://www.employment-studies.co.uk/resource/covid-19-and-low-paid-early-analysis-labour-force-survey

FCA extension for solo regulated firms and consultation on extending deadlines for conduct rules to come into force

In light of Covid-19, the FCA has extended the deadline for solo regulated firms to complete their fitness and propriety assessments of certified staff until 31 March 2021.

Further, the FCA is consulting on whether to extend the deadlines for applying the conduct rules to all staff (other than senior managers or certified persons) and training on the rules. The extension is relevant for solo regulated firms only.

https://www.fca.org.uk/news/news-stories/extension-smcr-implementation-periods-solo-regulated-firms

https://www.fca.org.uk/publication/consultation/cp20-10.pdf

Staff at work/returning to work

For more  information on work and return to work issues, including links to Acas and HSE guidance please see  Emplaw Monthly- End of April  and   Emplaw Monthly - End of May and Emplaw Monthly - End of June

The next chapter in our plan to rebuild: The UK Government’s COVID-19 recovery strategy

Updated 17th July, this follows on from  ‘Our plan to rebuild’: the UK Government’s COVID-19 recovery strategy' published in May and includes steps to be taken from 1st August and later. From 1st August, these include giving employers more discretion on how they ensure employees can work safely and making clear that working from home is one way to do this, but workplaces can also be made safe by following COVID-19 Secure guidelines. See also below. 

In the statement that accompanied this new chapter of the recovery strategy, the Prime Minister said that “Whatever employers decide, they should consult closely with their employees, and only ask people to return to the place of work if it is safe.”   Hence the government  has not gone as far as to say that everyone must go back to work no matter what but, there has been a shift in emphasis.

The plan also now advises  that people in England may use public transport again, while encouraging them to consider alternative means of transport where possible. This is a step which could facilitate the opening of physical workplaces again.

https://www.gov.uk/government/publications/our-plan-to-rebuild-the-uk-governments-covid-19-recovery-strategy/the-next-chapter-in-our-plan-to-rebuild-the-uk-governments-covid-19-recovery-strategy--2

Guidance on shielding and protecting people who are clinically extremely vulnerable from COVID-19

This advice was updated on 14th July making it clear that, from 1st August, the shielding programme will be paused, which means that those individuals who are currently classified as ‘clinically extremely vulnerable’ will be able to return to work, provided that the workplace complies with the COVID-19 secure guidelines.  It suggests that  Statutory Sick Pay (SSP) on shielding grounds will cease from 31 July.

Updated guidance on working safely during Covid-19

On 17th July, the government  published updated guidance on the 5 steps to working safely during the Covid-19 pandemic and the now 14 specific guides covering a range of different types of work. 

These reflect the strategy set out in The next chapter in our plan to rebuild: The UK Government’s COVID-19 recovery strategy (see above), and make clear that people who can work from home should continue to do so but that employers should decide, in consultation with their workers, whether it is viable for them to continue working from home. Where it is decided that workers should come into their place of work then this will need to be reflected in the risk assessment and actions taken to manage the risks of transmission in line with the relevant workplace specific guidance.

As to social distancing,  workers maintain social distancing guidelines (2m, or 1m with risk mitigation where 2m is not viable) wherever possible, including arriving at and departing from work, while in work and when travelling between sites.

https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19

Sick Pay

For more details on the original legislation and the coronavirus rebate scheme, please see the report in May’s  Emplaw monthly

The Statutory sick Pay (Coronavirus)(Suspension of Waiting Days and General Amendment)(No.2) Regulations 2020

These new regulations ensure that persons who are shielding themselves from other people in such a manner as to prevent infection or contamination with coronavirus will continue to be deemed to be incapable of work for the purpose of entitlement to statutory sick pay.

The amendments also ensure that persons deemed to be incapable of work because they or another person have the symptoms of coronavirus will remain entitled to statutory sick pay until the person with those symptoms receives notification that they have tested negative for coronavirus.

The amendments in paragraphs (7)(a) and (9)(a) ensure that a person will be entitled to statutory sick pay if a member of a linked household (in England) or of their extended household (in Wales and Scotland) has the symptoms of coronavirus.

https://www.legislation.gov.uk/uksi/2020/681/contents/made

PPE provided to employees during Covid-19

HMRC has updated its guidance on how to treat certain expenses and benefits provided to employees during Covid-19. With regard to PPE, it states:

If your employees are working in a situation where the risk of coronavirus transmission is very high, and your risk assessment shows that PPE is required, then you must provide this PPE to your employees free of charge. Any PPE you provide must fit properly. The provision of PPE to your employees is non-taxable.

If your employee requires PPE to carry out their role and you are unable to provide this, you must reimburse the actual expenses of employees who purchase PPE themselves. This is non-taxable and employees cannot claim tax relief on these expenses from HMRC.

https://www.gov.uk/guidance/how-to-treat-certain-expenses-and-benefits-provided-to-employees-during-coronavirus-covid-19#personal-protective-equipment-ppe

CJRS

For more details on the current scheme, please see the report in June’s  Emplaw monthly

Government clarifies that claims for furloughed employees can be made for contractual notice not just statutory notice

There has been some confusion over the wording in the government advice on furloughing in relation to whether a claim could be made in respect of contractual or statutory notice. The government has now clarified that claims can be made in respect of contractual notice periods.

https://www.gov.uk/guidance/check-which-employees-you-can-put-on-furlough-to-use-the-coronavirus-job-retention-scheme#if-youve-made-your-employees-redundant

CASES: 

Dolan & Ors v Secretary of State for Health And Social Care & Anor [2020] EWHC 1786 (Admin)

Challenge to validity of Coronavirus Regulations fails

This case concerns a challenge to the validity of the Health Protection (Coronavirus, Restrictions) (England) Regulations 2020 as amended ("the Regulations"). 

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Cornerstone (North East) Adoption And Fostering Service Ltd, R (On the Application Of) v The Office for Standards In Education, Children's Services And Skills [2020] EWHC 1679

Fostering agency discriminated against homosexual foster carers

This case involves the question whether it was lawful for an adoption and fostering agency only to accept heterosexual evangelical Christians as the potential carers of fostered children. Cornerstone (North East) Adoption and Fostering Service Ltd (Cornerstone), sought to judicially review a report by Ofsted, which found its carer recruitment policy to be in violation of equality and human rights laws and required it to change the policy. 

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Hill v Lloyds Bank Plc [2020] UKEAT 0173/19

‘Reasonable adjustments’ included offering a severance package if employer could not guarantee claimant would not work with certain employees

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Khorochilova v Euro Rep Limited UKEAT/0266/19

No disability for employee with mixed personality disorder

Ms Khorochilova claimed she was disabled based on having a “Mixed Personality Disorder”. She worked for Euro Rep Limited which was in the business of breeding insects. Ms Khorochilova was dismissed for issues relating to her management of the cricket colony.

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Department of Work and Pensions v Boyers [2020] UKEAT 0282/19

Discrimination arising in consequence of  disability – need to weigh the real needs of the undertaking against the discriminatory effect of the proposal

Section 15 of the EqA provides:

"(1) A person (A) discriminates against a disabled person (B) if—

(a) A treats B unfavourably because of something arising in consequence of B's disability, and

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Econ Engineering Ltd v Dixon & Ors [2020] UKEAT 0285/19

Profitability bonus should not be included in calculation of a ‘week’s pay’

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GTR Ltd v Rodway & Ors [2020] UKEAT 0283/19

Amendment to allow blacklisting claim flawed

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Angard Staffing Solutions Ltd & Anor v Kocur & Ors [2020] UKEAT 0050/20

Agency workers – meaning of ‘temporary’

This appeal concerns the meaning of "agency worker" in Regulation 3 of the Agency Workers Regulations 2010 ("the 2010 Regulations"). Regulation 3(1) provides:

"(1) In these Regulations "agency worker" means an individual who—

(a) is supplied by a temporary work agency to work temporarily for and under the supervision and direction of a hirer; and

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