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In this briefing, we round up eight key changes for employers to know about this April.

1. Covid-related changes – 1 April 2022

The following changes will take effect on 1 April 2022:

• Self-isolation:those with Covid symptoms will be encouraged to “exercise personal responsibility” and show consideration to others, but will not be required, nor advised, to stay at home.
• Covid testing:free lateral flow and PCR testing will end for the general public (PCR tests will remain available for social care workers and certain vulnerable groups).
• Risk assessments:the requirement for employers explicitly to consider Covid in their health and safety risk assessments will be removed.
• Guidance for employers:the “Working safely” guidelines for employers in different sectors will be replaced by new public health guidance (which had not been published at the time of writing), which will urge employers to continue to consider the needs of those at greater risk from Covid.
• Covid certification:the use of voluntary Covid-status certification will no longer be recommended for use.

2. National Living / Minimum Wage: rates increase – 1 April 2022

The hourly rates for the National Living Wage and National Minimum Wage will increase as follows:

• National Living Wage – age 23+: £9.50 (up from £8.91).
• Standard adult rate – age 21+: £9.18 (up from £8.36).
• Development rate – age 18+: £6.83 (up from £6.56).
• Youth rate – age 16+: £4.81 (up from £4.62).
• Apprentice rate: £4.81 (up from £4.30).
• Accommodation offset – maximum daily deduction: £8.70 (up from £8.36).

3. Statutory pay: increase to statutory family leave payments – 3 April 2022

The weekly rates of Statutory Maternity Pay, Maternity Allowance, Statutory Paternity Pay, Statutory Adoption Pay, Statutory Shared Parental Pay will increase to £156.66 (up from £151.97).

4. Deadline for publication of gender pay gap report – 4 April 2022:

During the middle of the pandemic, gender pay gap reporting was suspended and then reintroduced with a delayed publication schedule.  The original reporting pattern has been restored for 2022, meaning that private sector employers with at least 250 employees must publish gender pay gap reports by 4 April 2022 (with public sector employers having to publish by 30 March 2022).  Reports must be published on the organisation’s own website and also on this central Government website.

5. Statutory Sick Pay and changes to fit notes – 6 April 2022

The weekly rate of Statutory Sick Pay will increase to £99.35 (up from £96.35).

It had been the case that a doctor’s fit note had to be signed in ink by the issuing doctor.  From 6 April 2022, fit notes may be issued digitally without the need for a “wet-ink” signature by the doctor (although wet-ink signed fit notes may continue to be issued).

6. Employment Tribunal awards: increase to certain limits – 6 April 2022

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 increases to £571 (up from £544).
• The maximum compensatory award for unfair dismissal claims increases to £93,978 (up from £89,493).

In dismissal claims, these figures will apply to claims where the effective date of termination falls on or after 6 April 2022.

7. Changes to right to work checks – 6 April 2022

New rules will permit employers to use “Identification Document Validation Technology” (IDVT) service providers to verify digitally the identity of British and Irish citizens with valid passports or Irish passport cards for the purpose of right to work checks.  This will be an alternative to conducting a manual check.  Provided the employer has complied with relevant guidance and the Code of Practice, they will be excused from paying a civil penalty in the event that they employ someone who is disqualified from working because of their immigration status.

8. New duty to provide personal protective equipment to workers – 6 April 2022

The duty to provide suitable personal protective equipment (PPE) where there is a health and safety risk will be extended to cover the wider group of “workers”, in addition to employees.  Employers may not charge workers (or employees) for the provisions of such PPE.

Steps for employers to take

• Decide whether you will require those displaying Covid symptoms to take a lateral flow test before attending work and, if so, whether you will pay for such tests.
• Decide whether you will, in principle, permit those testing positive for Covid on or after 1 April 2022 to attend work if they are fit to do so. However, ensure that you review the new public health guidance when it is published and consult with your workforce before finalising your approach
• Ensure that staff are paid at least the minimum wage at the applicable rate for the hours they work.
• Ensure that staff are paid the correct rates of pay for family and sick leave and that any policies and template letters that refer to the statutory rates of pay are updated.
• Notify those responsible for receiving fit notes from staff about the new form of digital fit note.
• If you are within scope, ensure that your gender pay gap report is published by the deadline.
• Ensure that statutory redundancy calculations made in respect of any redundancies taking place on or after 6 April 2022 are calculated using the new weekly rate of pay.
• Decide if you will use an IDVT service provider to conduct relevant right to work checks and, if so, ensure that you review the related guidance and Code of Practice.
• Ensure that all workers provided with suitable PPE if this is not already the case.

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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On 17 March 2022 the Government published its response to the report by the Commission on Race and Ethnic Disparities (the Sewell Report), which examined racial and ethnic disparities that persist in education, employment and enterprise, crime and policing and health.  The Government’s response paper, entitled “Inclusive Britain”, responds to the recommendations made in the Sewell Report and sets out a 74-point action plan towards a “more inclusive and integrated society”.   In this briefing we consider the proposals of most interest to employers.

The action points in Inclusive Britain are extremely wide-ranging but the following will be of most interest to employers.

Voluntary ethnicity pay reporting

A consultation on introducing mandatory ethnicity pay reporting for large employers was launched in October 2018.  Over three years later, the Government has not responded to that consultation, but has announced that mandatory reporting will not be introduced “at this stage”.  The rationale for this is that the Government does not wish to impose new reporting burdens on businesses as they recover from the pandemic

Instead, the plan is to support employers to report voluntarily on ethnicity pay within their organisation.  The Department for Business, Energy and Industrial Strategy will publish guidance this summer to support employers to do this.  The new guidance will:

• encourage employers to use specific ethnic groups rather broader categories (e.g. white vs non-white) when publishing their data. It is acknowledged that this means ethnicity pay reporting will be a more resource-intensive activity for employers than gender pay gap reporting;
• support reporting across demographically different areas, in particular to assist employers in parts of the country with very small ethnic minority populations to report in a meaningful way;
• include case studies from employers who have already chosen to report on their ethnicity pay to set the benchmark for other employers to meet; and
• help employers identify the causes of pay disparities and take steps to address them.

It is not clear whether the Government will collate and publish reported ethnicity pay gaps on a central Government website, in the same way as is done for gender pay gap reporting.  A centralised website would enable readers to access all the reported data in one place and compare how employers are performing.  However, the response paper is silent on this issue.

Strengthening the Equality and Human Rights Commission

The Government says it wishes to strengthen the ability of the Equality and Human Rights Commission (EHRC) to enforce the Equality Act 2010.  The response paper says the Cabinet Office will invest in EHRC enforcement activity to challenge race discrimination through investigations and supporting individual cases.

In order to improve good practice in equality law across Britain it is said the EHRC will also support a wider range of organisations to comply with the law and develop policies and processes that support equality of opportunity for all.  However, no details are given as to which organisations will receive this support or when it will be provided.

New resources for employers to promote inclusion at work

The Government says it wishes to build a stronger evidence base showing how we can make workplaces more inclusive and fairer for everybody.  To that end, it proposes to establish an “Inclusion at Work Panel” by Spring 2023.  The Panel will be made up of academics and practitioners in business and will develop and disseminate resources for employers to drive fairness within their organisations.  This will go beyond race and ethnicity and identify actions to promote fairness for all in the workplace.

The UK Civil Service and public sector employers will lead by example by adopting evidence-based approaches, rooting out poor quality training and trialling new approaches.

Improved guidance on the use of positive action measures

The Government recognises that employers wish to introduce measures designed to improve representation and provide opportunities to certain protected groups.  However, it is important that such measures amount to lawful positive action, rather than straying into unlawful positive discrimination.

The Government believes it can help smaller organisations be more confident in using positive action measures by refreshing the guidance in this area.  Therefore, updated guidance on positive action is to be published by the Government Equalities Office by December 2022.

Improve standards by launching an “Inclusion Confident” scheme

While the Sewell Report found that the ethnicity pay gap is improving and ethnic minorities have made significant strides in occupational representation, underrepresentation persists at senior levels and ethnic minorities are more likely to experience discrimination at work.

The Government notes that the Disability Confident Employer Scheme helps organisations take action to improve how they recruit, retain and develop disabled people within the workplace.  The plan is to put in place a similar scheme that includes, but is not exclusive to, ethnicity and race. The new scheme will be live by Autumn 2023 and employers will be able to sign up to the scheme on a voluntary basis.

Regulation of artificial intelligence technology

The Sewell Report had recommended that the Government do more to improve the transparency and use of artificial intelligence (AI) technology by publishing guidance on applying the Equality Act 2010 to algorithmic decision-making.  In response, the Government has said that later this year the Office for AI will publish a white paper setting out the national position on governing and regulating AI.  This will include how to address potential racial bias in algorithmic decision-making.

In addition, the EHRC will issue guidance explaining how the Equality Act 2010 applies to algorithmic decision-making.  An algorithmic transparency standard will also be piloted in the public sector.

What are the next steps and what should employers do now?

The Government says the Inclusive Britain action plan will serve as a template for the public sector, businesses, charities and individuals.  It plans to report back to Parliament in 12 months’ time on the progress made in delivering these actions.

Despite the wide-ranging nature and ambitious tone of the Government’s response, there is, in fact, no new legislation for employers to get grips with.  Rather, the workplace initiatives are all voluntary in nature and it remains to be seen how many employers will choose to take them forward.  However, it would be sensible for employers with an interest in these issues to diarise the following dates and give some thought to which, if any, initiatives they wish to pursue.

• Summer 2022 – review new guidance on voluntary ethnicity pay reporting and work towards reporting.

• December 2022 – review new guidance on positive action and implement appropriate measures

• Spring 2023 onwards – review new materials on inclusion in the workplace and implement a strategy.

• Autumn 2023 – sign up for the Inclusion Confident scheme.

Inclusive Britain: Government Response to the Commission on Race and Ethnic Disparities

If you would like further information, or to discuss how your organisation can approach these initiatives, please contact Amanda Steadman (amandasteadman@bdbf.co.uk) or your usual BDBF contact.

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In the recent case of Law by Design v Ali the High Court upheld a 1-year non-compete restriction preventing a solicitor from going to work for a competitor

What happened in this case?

Ms Ali joined Law by Design (LBD), a boutique employment law firm, as an employee in 2013. She became a shareholder in 2016, at which point she signed a Shareholders’ Agreement which contained restrictive covenants.  In 2021, she received a substantial pay increase and entered into a Service Agreement which included further post termination restrictions lasting for 12 months. This included a non-compete clause preventing her from being involved in any business which was in competition with the parts of LBD that she had been materially involved with in the 12 months before her employment ended.

In May 2021, she resigned to join a larger national firm as a partner. LBD wrote to her asking that she confirm in writing that that she would abide by her restrictions. She refused, stating that, in her and her new employer’s view, the non-compete clause was not enforceable. Ms Ali did agree to abide by the separate non-solicitation and non-dealing restrictions.

LBD applied for an interim injunction to restrain Ms Ali from breaching her obligations.  However, the hearing did not go ahead because Ms Ali provided undertakings that she would comply with the covenants the evening before the hearing. She was, however, ordered to pay LBD’s wasted costs of £50,000 due to the delay in agreeing to LBD’s request.       

What was decided by the High Court?

At the final hearing, the High Court held that, while the restrictions in the Shareholders’ Agreement were too wide to be enforceable, the non-compete clause in the Service Agreement was enforceable. The Court was satisfied that LBD had a legitimate business interest to protect (including confidential information in the form of client contacts, charge-out rates and training materials) and that the restrictions were no wider than reasonably necessary.  In particular:

• Ms Ali could join a business anywhere in England and Wales which did not compete with LBD for the same clients;
• the geographical location was definable by the location of LBD’s clients; and
• the 12-month period was considered to be the shelf life of the confidential information and was also the time required to replace Ms Ali.

It was the Court’s view that Ms Ali was asking it to release her from a restraint so that she could take up employment with “the very type of competitor in respect of whom the restraint was intended to apply”.

What does this mean for employers?

It is surprising that the Court found that LBD was not adequately protected by Ms Ali’s ongoing obligations of confidentiality, non-dealing with and non-solicitation of clients, and needed the non-compete restriction. If it were to be appealed, we do think there is a fair chance this decision would be overturned. In any event, as restrictive covenant cases tend to be fact-specific, this is not a decision that will necessarily be repeated   

In this case, LBD’s position was helped by the fact that it had issued Ms Ali with a Service Agreement when it provided her with a pay rise in 2021. It is prudent for employers to consider updating employees’ contracts at the time of any pay rise or promotion to increase the chances of the restrictive covenants being enforceable. This is because it demonstrates that the restrictions have been considered and that payment is being made in exchange for the employee’s acceptance of the new terms.

This decision also demonstrates that employers may be awarded costs not just when they have succeeded in an application for interim relief but also when an employee has delayed unreasonably in responding to an employer’s request for undertakings that would avoid the need for an interim hearing.  

Law by Design v Ali

If you would like to discuss any issues arising out of this decision please contact Theo Nicou (theonicou@bdbf.co.uk), Amanda Steadman (amandasteadman@bdbf.co.uk) or your usual BDBF contact.

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In the recent case of Fentem v Outform EMEA Ltd it was decided that the employer’s use of a PILON clause to bring forward an employee’s termination date after he had resigned did not amount to a dismissal.

What happened in this case?

Mr Fentem resigned from Outform, giving nine months’ notice in accordance with his employment contract. He indicated to Outform that he might be willing to be flexible about the amount of notice he served.

A month before Mr Fentem’s notice was due to expire, Outform told him that they were using the PILON clause in his employment contract to bring his termination date forward and that he would be paid in lieu of notice for the remainder of the notice period.   Bringing the termination date forward by a month meant that Mr Fentem would not be eligible for a bonus under the terms of the company’s bonus scheme.

Mr Fentem argued that where employment is terminated by an employer (no matter what the circumstances) this constitutes a dismissal. He claimed that bringing forward his termination date amounted to unfair dismissal.

What was decided?

Ever since the 1994 decision in Marshall (Cambridge) Ltd v Hamblin it has been accepted that an employee’s resignation is not converted into a dismissal if an employer exercises its contractual right to make a PILON. This decision was unpopular at the time and has remained unpopular ever since. Mr Fentem, therefore, wanted the Employment Appeal Tribunal (EAT) to look at this question again.

The EAT agreed with Mr Fentem that the use by an employer of a PILON in these circumstances should amount to a dismissal. However, the EAT concluded it could not override the earlier decision in Marshall. For the decision in Marshall to be overturned a higher court (i.e. the Court of Appeal or Supreme Court) needed to hear the case. Therefore, it held that the use of the PILON clause by Outform did not amount to a dismissal of Mr Fentem.  However, it granted permission to appeal to the Court of Appeal.

What does this decision mean for employers?

For now, the law remains that employers can bring forward the termination date of an employee who resigns and this will not constitute a dismissal (providing there is a valid PILON clause in the employee’s employment contract). If the employee’s employment contract does not contain a PILON clause, then bringing forward the employee’s termination date will amount to a dismissal.

However, it is worth remembering that the judge who made the decision in this case did so reluctantly. There are many who think the use by employers of a PILON in such circumstances should amount to a dismissal and may be overturned in a future case.  We are inclined to agree. Therefore, employers should exercise caution before using a PILON clause to bring forward an employee’s termination date without their consent.

Fentem v Outform EMEA Ltd

If you would like to discuss any issues arising out of this decision please contact Rebecca Rubin (rebeccarubin@bdbf.co.uk), Amanda Steadman (amandasteadman@bdbf.co.uk) or your usual BDBF contact.

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