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Employment Law News

 

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Quick recap of the employment law changes coming into force in April 2021

Although the deadline for gender pay gap reporting has been pushed back to 5 October 2021, employers still need to keep on top of other employment law changes coming into force in April. Here we round up the five key changes for employers to navigate.

1. Contractors: changes to the IR35 rules in the private sector – 6 April 2021

The way in which the IR35 rules operate in the private sector will change on 6 April 2021.  These reforms will see contractors lose the ability to determine their own tax status and place this burden on those who engage them.  Large and medium-sized businesses in the private sector that engage independent contractors via an intermediary (usually a personal service company) will become responsible for assessing whether the IR35 rules apply.  Once the business has made its assessment, it must notify certain parties of its decision and provide them with the opportunity to challenge it.

If a business determines that a contractor is an employee for tax purposes, then the party that pays the fee to the intermediary must deduct tax and National Insurance Contributions (NICs).   In a simple contractual chain (i.e. individual > intermediary > end user business), the end user business is the fee payer and would have to deduct tax and NICs.  By contrast, in a four-party chain (e.g. individual > intermediary > agency > end user business), the agency is the fee payer and would have to do that job.

Action point? Our detailed guide to the new regime sets out a range of different action points for affected employers.

2. Statutory pay: increase to statutory family leave pay and sickness payments – 4 April 2021

It is expected that statutory family leave and sickness payments will increase as follows on 4 April 2021 (this date is yet to be confirmed):

• Statutory Maternity Pay, Maternity Allowance, Statutory Paternity Pay, Statutory Adoption Pay, Statutory Shared Parental Pay: £151.97 per week (up from £151.20).
• Statutory Sick Pay: £96.35 per week (up from £95.85).

Action point? Employers should ensure that the correct rates are paid to affected employees and that any policies and template letters that refer to the statutory rates of pay are updated.

3. National minimum wage: change to the age threshold and rates increase – 1 April 2021

The minimum age threshold for entitlement to the National Living Wage will decrease from 25 to 23 years of age.  In addition, the hourly rates will increase as follows:

• National Living Wage – age 23+: £8.91 (up from £8.72).
• Standard adult rate – age 21+: £8.36 (up from £8.20).
• Development rate – age 18+: £6.56 (up from £6.45).
• Youth rate – age 16+: £4.62 (up from £4.55).
• Apprentice rate: £4.30 (up from £4.15).
• Accommodation offset – maximum daily deduction: £8.36 (up from £8.20).

Action point? Employers must ensure that staff are paid at least the minimum wage (at the applicable rate) for the hours they work.

4. Termination payments: changes to the PENP calculation rules – 6 April 2021

An alternative formula for calculating post-employment notice pay (PENP) will be introduced for use in situations where an employee is paid monthly but their contractual notice period isn’t a whole number of months.  If you require advice on the alternative formula, please get in touch.

The new rules will also introduce changes to ensure that non-residents who receive PENP are taxed fairly.  The tax treatment of PENP for individuals who are non-resident in the year of termination of their UK employment will be the same as for UK residents.  Both changes will apply where the termination payment is received on or after 6 April 2021.

Action point? Employers should familiarise themselves with the new rules and apply them in relevant cases.

5. Employment Tribunal awards: increase to certain limits – 6 April 2021

The limits on certain Employment Tribunal awards will increase as follows:

• The ceiling on “a week’s pay” for calculating redundancy payments, the basic award for unfair dismissal and various other statutory rights: £544 (up from £538).
• Maximum compensatory award for unfair dismissal claims: £89,493 (up from £88,519).

In dismissal claims, these figures will apply to claims where the effective date of termination falls on or after 6 April 2021.

Action point? Employers should ensure that statutory redundancy calculations made in respect of redundancies taking place on or after 6 April 2021 are calculated using the new weekly rate of pay.

If your business needs advice on preparing for any of these changes please contact Amanda Steadman (amandasteadman@bdbf.co.uk) or your usual BDBF contact.

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Employment Law News

 

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Furlough scheme extended to 30 September 2021 and other key employment news from the Spring 2021 Budget

On 3 March 2021, the Chancellor of the Exchequer, Rishi Sunak MP, delivered the Spring 2021 Budget.  Here we round up the key employment law announcements for employers to note including the five-month extension to the furlough scheme.

Furlough scheme

The furlough scheme had been due to close on 30 April 2021.  The Chancellor announced that the scheme will be extended by five months and will close on 30 September 2021, meaning the scheme will have been in place for 19 months overall.  Throughout this extended period, furloughed employees will remain entitled to be paid 80% of their normal wages for any furloughed hours (subject to the maximum cap of £2,500 per month).

Employers will not be required to contribute to furloughed employees’ wages for unworked hours during either May or June 2021.  During this period, employers will only have to pay employer National Insurance Contributions (NICs) and pension contributions, plus wages for any worked hours.  However, from July 2021, when the economy will start to reopen in earnest, employers must contribute to the wage costs of furloughed hours.  In July 2021, employers must pay 10% of the wage costs and in August and September 2021, employers must pay 20% of the wage costs.  We expect a new Treasury Direction and guidance on this next phase of the scheme to be published shortly.  Once this becomes available, we will update the BDBF guide for employers on the scheme.

Separately, the Chancellor also announced that the Government will invest over £100 million in combating fraud within the Government’s COVID-19 support packages, including the furlough scheme.

Statutory sick pay (SSP) rebate scheme

In response to the pandemic, the Government introduced a temporary SSP rebate scheme under which eligible employers with fewer than 250 employees could reclaim up to two weeks’ worth of SSP for an employee’s COVID-19-related sickness absence.  The Chancellor announced that this scheme will continue while sickness absence levels remain high but will close in due course.  However, no date for closure has been set.

COVID-19 tests and home office expenses

The Chancellor announced that neither income tax nor NICs will be payable on COVID-19 tests which are reimbursed by employers in either the 2020-21 or 2021-22 tax years.  This supplements the existing exemption for COVID-19 tests which have been provided to the employee by the employer.

A similar income tax and NICs exemption exists for reimbursed expenses of home office equipment.  It was announced that this exemption will be extended into the 2021-22 tax year.

National minimum wage

On 1 April 2021 the minimum age threshold for entitlement to the top rate of the national minimum wage (known as the National Living Wage (NLW)) will decrease from 25 to 23 years of age and the hourly rate will rise to £8.91 per hour.  The national minimum wage rates for other age groups will also increase on the same date.  Last year, the Government announced plans to extend the NLW to workers aged 21 and over and increase the rate to two-thirds of median earnings by 2024.  In 2020, the sum for median weekly earnings in the UK was £586 per week, meaning the median hourly rate (based on a standard 35-hour working week) was £16.74 per hour.  Accordingly, if the NLW were set at two thirds of the 2020 median hourly pay rate then it would need to increase to around £11.16 per hour(and, of course, this figure may be higher by 2024).

The Chancellor announced that he has asked the Low Pay Commission to recommend how the NLW and other national minimum wage rates should rise next year in order to be on track to meet the 2024 target.

Traineeships and apprenticeships

Employers who create new traineeship opportunities between 1 September 2020 and 31 July 2021 are entitled to apply for a cash payment of £1,000 per trainee (up to a maximum of ten).  The Chancellor announced that employers will continue to be able to claim the £1,000 payment in the 2021-22 academic year (i.e. up to 31 July 2022).

Currently, employers who hire new apprentices are entitled to apply for a cash payment of £2,000 for each apprentice aged under 25 and £1,500 for those aged 25 or over.  The Chancellor announced that these payments would be extended and increased.  From 1 April 2021, employers who hire new apprentices before 30 September 2021 may claim £3,000 per apprentice.

From July 2021, the Government will also invest £7 million in developing a “portable apprenticeship” scheme and employers will be invited to put forward relevant proposals.

If your business needs advice on the furlough scheme or any of these changes please contact Amanda Steadman (amandasteadman@bdbf.co.uk) or your usual BDBF contact.

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Employment Law News

 

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Employee fairly dismissed for refusing to wear face mask on client’s premises

In one of the first COVID-19 dismissal cases, an Employment Tribunal had to decide whether an employee was dismissed fairly for refusing to wear a face mask when attending a client’s premises. 

What does the law say?

In order to dismiss an employee fairly, an employer must establish a potentially fair reason for the dismissal and have acted reasonably in dismissing the employee for that reason.  In conduct dismissals, the employer must satisfy the test established by British Home Stores Ltd v Burchell, namely that:

• it believed the employee to be guilty of misconduct;
• it had reasonable grounds for believing the employee was guilty of misconduct; and
• prior to forming that belief, it carried out as much investigation as was reasonable in all the circumstances.

What happened in this case?

Mr Kubilius (K) drove a lorry for Kent Foods and worked at its Basildon depot.  Approximately 90% of the work of the Basildon depot involved travel to and from one particular client’s premises, namely Tate & Lyle’s Thames Refinery site.  Kent Foods’ Staff Handbook required its employees to:

• treat clients courteously;
• take all reasonable steps to safeguard health and safety; and
• co-operate with the business to ensure a healthy and safe working environment.

Drivers also had to comply with a separate Drivers’ Handbook which, among other things, required that “…customer instructions regarding PPE requirements must be followed”.

In May 2020, Tate & Lyle decided that face masks must be worn by all staff and visitors at its Thames Refinery site at all times.  This was not a legal requirement.  At the time, the Government guidance was that “wearing a face covering is optional and is not required by law including in the workplace”.  K made a delivery to the Tate & Lyle site in May 2020.  When he arrived, he was issued with a mask, but he was not told when he must wear it.  He was also given a copy of the written site instructions, but these had not been updated to reflect the new rule and did not specify that masks must be worn at all times.

K parked his lorry and sat inside without a mask on.  Two Tate & Lyle staff members then told him that he had to put it on inside the lorry, highlighting he could pass on the virus when speaking out of the window from an elevated position.  K refused to put it on arguing that the lorry cab was his domain, it was not a legal requirement to wear one and they couldn’t force him to do so.  However, he said he would wear the mask when he stepped outside of the lorry.

After this incident, Tate & Lyle banned K from the Thames Refinery site for non-compliance with health and safety rules.  Kent Foods carried out an investigation and asked Tate & Lyle to lift the ban but to no avail.  Redeployment was not an option as there were no roles available that did not require trips to the Tate & Lyle site.  The matter proceeded to a disciplinary hearing and K was summarily dismissed for gross misconduct.  K claimed that he had been unfairly dismissed.

What was decided?

Kent Foods said it dismissed K because of his conduct.  In the alternative, they said he was dismissed because of third party pressure which amounted to “some other substantial reason”.  The Employment Tribunal dismissed the claim, holding that Kent Foods reasonably believed that K was guilty of misconduct having investigated the facts (which were not disputed).  It had acted reasonably in treating the alleged misconduct as a sufficient reason for dismissal.

The Tribunal recognised that another employer might have chosen to issue a warning, in light of the fact that it was a single incident and K had been taken by surprise with the instruction.  Further, as a keyworker working in the middle of the national lockdown, he had been operating in a stressful situation.   However, it could not be said that dismissal fell outside of the range of reasonable responses open to an employer.

In reaching this decision, the Tribunal attached particular weight to the following factors:

• the importance to Kent Foods of maintaining good relationships with its main client;
• K’s continued insistence that he’d done nothing wrong, which caused concerns about how he might behave in the future; and
• the fact that K couldn’t do any work because Tate & Lyle had banned him from their site.

What does this mean for employers?

This case involved a relatively unusual set of circumstances in that the employee’s actions risked harming the relationship between his employer and their major client and also meant that he couldn’t perform his job role.  It’s unlikely that the outcome would be the same where an employee was summarily dismissed for a failing to comply with an employer’s requirement to wear a mask in an office setting on one occasion.  It’s more likely that an employer would be expected to go through a system of warnings before moving to dismiss.  Even then, an employer would need to be very careful not to act inconsistently, given that many staff are likely to commit breaches of COVID-19 health and safety rules (whether intentionally or accidentally).

Is it possible to extrapolate how an Employment Tribunal might view a dismissal for refusal to comply with an employer’s requirement to have the COVID-19 vaccine? The battleground will be whether the employer has acted reasonably in the circumstances.  Here, an employee’s reason for refusing to comply with the instruction will be highly relevant.  It will be risky to dismiss an employee who can show that he or she had a good reason for refusing vaccination (and it may also be discriminatory).   An employer would also need to consider alternatives to dismissal, such as allowing the employee to work in a lower risk role / environment or from home if feasible.

Kubilius v Kent Foods Limited

If you would like to discuss your approach to Coronavirus and your staff get in touch with Amanda Steadman (amandasteadman@bdbf.co.uk) or your usual BDBF contact.

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Employment Law News

 

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Vaccines in the workplace part 2: key practical issues for employers 

In the second of two articles examining the hot topic of vaccines in the workplace, we consider how employers who do not require staff to be vaccinated should approach some of the key practical issues arising out of the COVID-19 vaccination programme. 

1. If we don’t mandate vaccination, how should we encourage staff to have the vaccine?

In our first article on vaccines in the workplace we considered the key legal issues faced by employers who wished to mandate vaccines for staff.  You can read that article here.  Our conclusion was that for many employers it would not be reasonable to mandate vaccination and it could also be discriminatory.  That being the case, we expect many employers to proceed on the basis of strongly encouraging, but not requiring, staff to have the vaccine.   This approach will help you discharge your legal duties to minimise risks to staff and third parties in the workplace. 

You can support the voluntary uptake of the vaccine in a number of different ways including:

• Consulting with staff to communicate your position about staff vaccination and discover what concerns staff have and what support is needed.
• Introducing a Vaccination Policy which explains that staff are encouraged to have the vaccine and provides signposts to the latest official information about the vaccine.The NHS has produced some useful materials here. 
• Holding a Q&A session for staff with a GP or vaccine specialist.
• Allowing staff to take paid time off work to attend vaccine appointments (see below).

2. Do we have to allow staff paid time off work to be vaccinated?

There is no legal right to take paid or unpaid time off work to attend routine medical appointments.  However, it may be a reasonable adjustment to allow a disabled worker to take time off to attend a medical appointment related to their disability. This could extend to vaccination appointments for workers who are clinically vulnerable.

If you do not usually allow staff to take time off for medical appointments, you could insist that appointments are made outside of working hours or that lost working time is made up (save for certain disabled staff).  However, this approach does not sit well with a policy of strongly encouraging uptake of the vaccine. 

Given that staff vaccination is in an employer’s interests and only requires two short appointments up to three months apart, we would expect many employers to permit paid time off work to have the vaccine.  Indeed, permitting paid time off may encourage staff to have the vaccine more quickly than would otherwise be the case.

3. How should we respond if an employee is unwell after having the vaccine?

NHS guidance on the vaccine provides that some people experience mild side effects after having the vaccine.  These include:

• feeling tired;
• having a headache;
• feeling achy; and/or
• feeling or being sick.

It is said that these side effects should not last more than a week and painkillers may be taken.  Therefore, in most cases, staff should be able to continue working after having had the vaccine.  If a worker feels too unwell to work then this should be taken, and paid, as normal sickness absence in accordance with your sickness policy.   However, where you have strongly encouraged staff to have the vaccine, it would be wise to disregard such absence for the purposes of any sickness absence management threshold.  Workers might say they felt under pressure to have the vaccine and it’s unfair to penalise them for the resultant sickness absence.

4. Can we require staff to notify us of their vaccination status?

If you have not mandated staff vaccination, workers might say that a requirement to disclose their vaccination status is an unreasonable instruction as this is private information about their health.  The response would be that you need to know which staff members have and have not been vaccinated so that you can assess risk properly and put measures in place to control the risk.

However, it’s true that a worker’s vaccination status is health information and, as such, is classified as “special category data” for data protection purposes.  In order to process special category data, you must satisfy yourself that there is a lawful basis to do so under data protection laws.  Consent is rarely sufficient in the employment context given the imbalance of power between an employer and employee. 

Instead, the lawful basis will usually be that you have a legitimate interest in understanding the vaccination status of the workforce in order to manage and discharge your health and safety duties.  However, you would also need to show that it’s necessary to process this data in order to achieve that legitimate interest.  The ICO’s guidanceprovides that an employer needs “clear and compelling” reasons for recording this information and should not do it on a “just in case” basis.  The ICO also recommends conducting a Data Protection Impact Assessment if the use of the data has risks for the worker (e.g. denial of employment opportunities).

If you do decide to collect vaccination status data, the ICO says that before collecting the data you should tell staff:

• why you need to collect the information;
• what it will be used for;
• who it will be shared with;
• how long it will be kept; and
• what decisions may be made based on the data held.

You may need to update your Staff Privacy Notice to reflect the fact that you are collecting this type of data.

5. How should we deal with unvaccinated staff?

Early evidence suggests that vaccination reduces the risk of transmission of COVID-19 but does not eliminate it altogether.  This position should be monitored as further evidence is published, although it seems likely that unvaccinated staff are at greater risk of being infected and transmitting the virus than vaccinated staff. 

As part of your COVID-19 risk assessment, you should assess the risks posed by unvaccinated staff to other workers and third parties (and vice versa).  You may assess the risks to be material and consider it reasonable to take additional steps to manage those risks.  This could cover a range of measures such as:

• conducting regular lateral flow tests on all staff;
• requiring all staff to wear face masks at work (in addition to other COVID-19 secure measures);
• making temporary changes to seating arrangements and/or job roles to separate unvaccinated and vaccinated staff; and/or
• requiring unvaccinated staff to work from home where possible for a further period of time (e.g. until the virus recedes or becomes less harmful).

It will be vital that any such changes are managed carefully.  Ideally, staff should be consulted before they are introduced.  For example, an unvaccinated worker may argue that a change to their job role or work location is detrimental and – depending on their reason for refusing the vaccine – discriminatory.  We would recommend that you obtain legal advice before taking any such action.

6. Should we tell staff if they are working with someone who hasn’t been vaccinated?

As discussed at above, a worker’s vaccination status is classified as “special category data” for data protection purposes.  The ICO’s guidance provides that employers should not disclose a particular worker’s vaccine status to other workers unless there is a legitimate and compelling reason to do so.  For example, you may have workers who are immuno-suppressed, meaning they do not develop a full immune response to the vaccine and remain exposed to COVID-19.  It’s likely to be legitimate to tell them that they are working alongside an unvaccinated worker and discuss an appropriate response, but even then it should not be necessary to tell them who that person is (although in a small workplace they may be able to work it out). 

7. Once staff have been vaccinated staff can we dispense with COVID-19 health and safety measures in the workplace?

No. The Government’s COVID-19 Secure Guidelines for different industries provide that the guidelines apply even where workers have been vaccinated (regardless of whether they have had 1 or 2 doses).  This means you must implement the relevant measures such as hand washing / sanitising, use of PPE where relevant, social distancing, good ventilation and regular cleaning.

8. Should we introduce a Vaccination Policy? What should go in it?

Even employers who are not mandating staff vaccination may find it helpful to introduce a staff Vaccination Policy, primarily to communicate your position of encouraging uptake of the vaccine.  The Policy could address the following areas:

• Information about the COVID-19 vaccine, including the benefit and risks.
• The employer’s position regarding encouragement of staff to have the vaccine.
• Approach to paid time off to attend vaccine appointments.
• Approach to vaccine-related sickness absence.
• If relevant, the requirement for staff to disclose their vaccination status.
• Measures that may be taken to manage risks posed by and to unvaccinated staff.
• Other COVID-19 secure measures the employer has in place.
• A point of contact within the business with whom staff can raise questions.

If you would like to discuss your approach to staff vaccination please get in touch with Amanda Steadman (amandasteadman@bdbf.co.uk) or your usual BDBF contact.

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