KNOWLEDGE

Employment law reform timeline

Morton Fraser Partner Innes Clark
Author
Innes Clark
Partner
PUBLISHED:
19 July 2022
Audience:
Business
category:
Blog

This blog sets out the key legislative and case law decisions expected in 2022 and beyond and will be regularly updated throughout 2022.

 

SPRING 2022

Mandatory vaccination

Legislation implementing the extension of mandatory covid-19 vaccinations in England to health and social care workers, including volunteers, who have face to face contact with service users is expected to come into force in the Spring.  There will be a 12 week grace period to allow those who have not yet been vaccinated to get both doses, with enforcement expected to begin on 1 April.

UPDATE - following consultation the UK Government brought forward regulations revoking mandatory vaccination as a condition of deployment in health and social care  in England.  The regulations came into force on 15 March 2022.

Gender pay gap reporting

30 March saw the gender pay gap reporting deadline for public sector employers (using 31 March 2021 as a snapshot date).

4 April saw the gender pay gap reporting deadline for private companies and voluntary organisations with 250 or more staff.  The snapshot date of 5 April 2021 meant that for the second year in a row furlough significantly impacted on the final figures. 

Analysis of the data showed that the gap in the median hourly rate improved from 10.2% to 9.8%.  However, caution should be exercised when considering the data given the impact of furlough.

National living and national minimum wage

1 April saw the changes to national living and national minimum wage taking effect.  As of that date the new rates were:-

  • NLW increased from £8.91 to £9.50 per hour (for those aged 23 and over)
  • NMW 21 to 22 year old rate increased from £8.36 to £9.18 per hour
  • NMW 18 to 20 year old rate increased from £6.56 to £6.83 per hour
  • NMW 16 & 17 year old rate increased from £4.62 to £4.81 per hour
  • NMW apprentices rate increased from £4.30 to £4.81 per hour

Statutory benefits

Statutory sick pay increased from £96.35 to £99.35 per week.  Statutory maternity, paternity, shared parental and adoption pay increased from £151.97 to £156.66 per week. 

Social care levy

From April, there was a temporary 1.25% increase in Class 1 primary National Insurance contributions (NIC) rates for employees and Class 1 secondary NIC rates for employers. It had been intended that from April 2023 the increase would be treated separately as a Health and Social Care levy and would also apply to those working above the state pension age. However, following on from Liz Truss appointment as leader of the Conservative Party the increase in NIC's will be reversed from 6 November and the Health and Social Care Levy is to be abolished.

Tribunal compensation

The annual Employment Tribunal award limit changes took effect on 6 April.  For cases involving dismissals, the figures apply where the effective date of termination falls on or after 6 April 2022.  The limit on compensatory award for unfair dismissal rose from £89,493 to £93,878.

The cap on the compensatory award is the lower of the maximum limit or 52 weeks' pay (based on the Claimant's gross salary prior to dismissal including employer pension contribution but excluding benefits in kind and discretionary bonus).  There are a limited number of exceptions where the cap does not apply. These are dismissals for whistleblowing or for raising certain health and safety issues. In addition, there is no limit to the award that can be made where a dismissal is related to unlawful discrimination.

The limit on a week's pay (used for calculating statutory redundancy payments and the basic award for unfair dismissal) increased from £544 to £571 meaning the maximum basic award and maximum statutory redundancy payment increased to £17,130. 

Guidelines for injury to feelings awards

An award for injury to feelings is made to compensate for injury to feelings caused by discrimination. The award is separate from an award to compensate for financial loss and can be made even where no financial loss has been suffered.  To assist Employment Tribunals, the Court of Appeal previously set out guidance for quantifying awards for injury to feelings, known as the Vento bands. For claims presented on or after 6 April 2022 the bands are as follows:-

  • Lower band (less serious cases) - £990 to £9,900 
  • Middle band (for cases that do not merit an award in the upper band) - £9,900 to £29,600
  • Upper band (for most serious cases) - £29,600 to £49,300

Awards of more than £49,300 will only be made in the most exceptional of cases.

LATER IN 2022 AND BEYOND

Employment Bill

Despite not being mentioned in the Queen's Speech in 2021 or 2022 progress has been made in terms of various consultations and, in some cases, UK Government responses to the consultations confirming more details of what are likely to be the key features of the Bill.  When introduced in the Queen's Speech in 2019, the Employment Bill included:-

  • Establishment of a new single enforcement body for employment rights;
  • Extension of protection against redundancy for pregnant women and new parents;
  • Neonatal leave and pay (12 weeks);
  • Unpaid carers leave (1 week);
  • Changes to flexible working rights;
  • A right to request a more predictable contract; and
  • Provisions to ensure workers retain tips in full (however there is now some doubt over whether this will be progressed).

While the most recent timescale for implementation of the Bill is "when Parliamentary time allows" in July the UK Government backed two Private Members Bills relating to workers retention of tips and neonatal leave and pay.  It now seems likely these proposals will be implemented via these Private Members Bills and not the Employment Bill. 

Employer duty to prevent sexual harassment in the workplace

The UK Government response to the 2019 consultation on sexual harassment in the workplace confirmed a new duty to prevent sexual harassment in the workplace is to be introduced "as soon as parliamentary time allows".  The Equality and Human Rights Commission are to develop a code of practice on sexual harassment and harassment at work and the UK Government also intends to support the strategic enforcement action the EHRC can take as well as discuss with them whether there is scope for extending such action.  A duty to prevent third party harassment is also to be introduced.  The UK Government has also undertaken to "look closely" at extending the time limit for lodging claims under the Equality Act before Employment Tribunals. It looks likely that the UK Government will extend the time limit for Equality Act claims from 3 to 6 months.

Misuse of non-disclosure agreements

"When parliamentary time allows" is also the timescale for implementation of legislation to curb the use of Non-Disclosure Agreements (NDAs) in employment contracts and settlement agreements.  The UK Government's response confirmed legislation will ensure:-

  • Confidentiality clauses cannot prevent disclosures to police, regulated health and care professionals or legal professionals;
  • The limitations of the clause are clear to those signing them; and
  • Improved independent legal advice is available to those signing a settlement agreement.

Guidance on drafting requirements will also be introduced as will new enforcement measures for confidentially clauses that do not comply with legal requirements.

Minimum service requirement during rail strikes

The same timescale applies to the UK Government's intention to require a minimum level of service during strike action to ensure that the public are not disproportionately affected by rail strikes. Any strike which does not meet the minimum service requirement will be unlawful. Injunctions/interdicts or damages will be able to be sought against unions.  One of the pledges made by Liz Truss during her campaign to be elected leader of the Conservative Party was to extend this service requirement to critical national infrastructure although it is not yet clear exactly what this covers. 

Modern slavery

A UK Government response to the consultation on Transparency in supply chains, which proposed changes to the Modern Slavery Act, was published in September 2020.  Amongst a number of other proposals, the Government response includes legislating on the content of statements, introducing a single reporting deadline (30 September each year) and requiring organisations to publish their statements on a UK Government website.  The legislative changes will be made when parliamentary time allows.

Data protection - Employment practices guidance

The Information Commissioner's Office called for views to help shape its new data protection employment practices guidance with a closing date of October 2021.  Updated, more user friendly, online resources with topic-specific areas should be the outcome, hopefully later in 2022.

OTHER FUTURE DEVELOPMENTS

We also have something of a backlog of measures that have been proposed, consulted on, or confirmed but without any timescale for implementation.  These include:-

Menopause in the workplace

Menopause in the workplace started to get the attention it deserved in 2021 which was partly down to the launch of separate inquiries into the topic by both the Women and Equalities Committee and the All Party Parliamentary Group on Menopause.  Both inquiries closed in September 2021 with findings and recommendations to be presented to the UK Government.  These are likely to influence legislative change and future policies related to menopause, women's health in the workplace and what employers can do.

Ethnicity pay gap reporting

The introduction of mandatory ethnicity pay gap reporting has been proposed, consulted upon and even requested by business leaders.  However, the UK Government is yet to take any action.  While the Gender Pay Gap Reporting Regulations show that mandatory reporting is far from a quick fix for inequality, it does keep the issue in the public eye which is a first step.  However, the UK Government announced in summer 2022 that ethnicity pay gap reporting will not be made mandatory.  Guidance is to be published on voluntary reporting. 

Consultation on workplace disability reporting

The National Disability Strategy indicated an intention to consult on disability workforce reporting by the end of 2021.  The consultation aims to explore disability workforce reporting for larger employers with 250 or more employees.  It looks at both mandatory and voluntary reporting. The focus of the mandatory reporting is data showing the proportion of employees in a workforce that identify as disabled but respondents are also asked what, if any, other statistic could be reported alongside or instead of this.  The consultation closed on 25 March 2022 and results are being analysed.

Reform of post-termination non-compete clauses

This consultation, seeking views on proposals to either limit or prevent the use of post-termination non-compete clauses, closed on 26 February 2021 and the responses are currently being analysed.

Extension of ban on exclusivity clauses

Views were sought on extending the ban on exclusivity clauses beyond the current zero hours contract to contracts where the workers guaranteed weekly income is less than the Lower Earnings Limit. The consultation on this issue closed on 26 February 2021 with responses currently being analysed.

UPDATE: On 9 May the UK Government announced the ban will be extended to contracts where the guaranteed weekly income is on or below the Lower Earnings Limit (currently £123 per week).  Draft regulations were laid before Parliament in July that make unenforceable any contractual term prohibiting a worker from doing work or performing services under another contract or arrangement, or which prohibits a worker from doing so without their employer's consent.  Employees will also be protected from unfair dismissal (with no requirement for 2 years qualifying service) and workers from detriment should they breach a contractual exclusivity clause. 

Extending the gap in employment required to break continuity

At present only 1 week is required to break continuity of employment and it has been proposed that this will be extended to 4 weeks. This measure was announced as part of the Good Work Plan, as was an intention to improve guidance on how the law treats temporary cessations of work. However, there have been no further developments since then and no timescale for implementation is known.

Government response to consultation on employment status

This consultation took place in 2018 with the aim of bringing greater clarity to the area of employment status.  The UK Government finally responded to it in summer 2022 confirming there were to be no legislative changes to the current regime.  For more detail on this please read UK Government response to employment status consultation.

KEY CASES FOR 2022

Where we have covered these cases in the past, more details on the facts and the judgments that have been appealed can be obtained by clicking on the links below.

In 2022 we will see a number of interesting judgements from cases heard in 2021 including:-

The long running case of Harpur v Brazel was heard by the Supreme Court in November 2021. This looks at whether workers who only work part of the year should have their annual leave capped at 12.07% of annualised hours.  The judgment will be of particular interest to the education sector.

UPDATE - the Supreme Court has held that holiday pay for permanent part-year workers (for example term time only) should not be pro-rated to reflect the number of weeks worked.  Instead the statutory calculation under the Working Time Regulations 1998 should be followed even if that means a windfall for part year workers. 

The Court of Appeal judgment in Chell v Tarmac Cement and Lime Ltd is awaited following a decision of the High Court in England that an employer was not liable for the consequences of an employee's practical joke in the workplace.  A contractor had been unintentionally injured as a result of the joke.

UPDATE - the Court of Appeal have the High Court judgment that the employer was not liable for the consequences of the employee's practical joke. 

Smith v Pimlico Plumbers Ltd was heard by the Court of Appeal in December 2021.  Having established that the claimant was a worker, the merits of the case then fell at the first hurdle, being dismissed by the Employment Tribunal on the basis that the claimant was not entitled to carry over a right to be paid for annual leave that he had previously taken.  This judgment was subsequently upheld by the EAT and the Court of Appeal judgment is awaited.

UPDATE - the Court of Appeal has overturned the employment tribunal and EAT judgments, finding that the claimant was entitled to carry over a right, year on year, to be paid for leave that he had taken but the employer had refused to pay him for at the time due to misclassification as being self-employed.  That right crystallised on termination of employment meaning the claim had been lodged in time.  

The judgment of the EAT is awaited in Mackareth v Department for Work and Pensions and another.  The appeal is from a Tribunal judgment that a doctor who refused to address transgender patients by their chosen pronoun was not discriminated against on the grounds of religion or belief when his contract was terminated.

UPDATE - the EAT agreed with the tribunal that the claimant had not been discriminated against however, unlike the employment tribunal, they were of the view that the claimant's lack of belief in transgenderism was a belief worthy of protection under the Equality Act 2010.

Cases relating to employment status continue to keep the tribunals busy and we await the judgment of the EAT in Stojsavljevic v DPD Group which is an appeal against an ET judgment that claimants, who were working under franchise agreements, were not workers.  The focus of the case is the right to substitute so the judgment will be of significant interest.

There are also a number of high profile cases due to be heard in 2022, most notably:-

Angard Staffing Solutions Ltd v Kocur and others will be heard by the Court of Appeal in January 2022, with the Court considering a number of issues arising from the interpretation of the Agency Workers Regulations 2010.

UPDATE - The Court of Appeal has held that the right under the Agency Workers Regulations 2010 for agency workers to be notified of vacancies with the hirer does not imply a right to apply for any of those jobs. 

Lee v Ashers Baking Co Ltd and others is still awaiting a decision on admissibility for a hearing before the European Court of Human Rights ("ECHR"), the Supreme Court having held that refusing to provide a cake supporting gay marriage is not discrimination.  This is a case which deals with discrimination in terms of access to goods and services rather than employment law but it establishes precedents which may be relevant to future cases concerning discrimination in the employment field.  Before the ECHR the case is brought against the UK rather than Ashers Baking Co Ltd, with Mr Lee claiming that in reaching its decision the Supreme Court failed to give appropriate weight to his rights under the European Convention on Human Rights.

UPDATE - the application for a hearing was found to be inadmissible by the ECHR because Mr Lee had failed to exhaust the domestic remedies available to him.  In order for a complaint to be admissible  applicants must have raised the issues before the domestic courts.  Mr Lee had not done so, depriving the domestic courts of the opportunity to address them.

Permission to appeal to the EAT has been granted in the case of Higgs v Farmor's School.  The case concerns an Employment Tribunal judgment that a Christian employee's beliefs that gender cannot be fluid and that an individual cannot change their biological sex or gender were worthy of respect in a democratic society and could therefore be a protected belief under the Equality Act 2010.

Permission to appeal to the Court of Appeal has been sought in the cases of University of Oxford v Ewart and Pitcher v University of Oxford. The EAT judgment left the University with two conflicting judgments on whether the same compulsory retirement policy was discriminatory.

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