Employment Review - February 2019

Welcome to our February Employment Update. In this bulletin, we outline the Government's Good Work Plan. We also consider two interesting cases on disability discrimination and whistleblowing and we highlight key employment legislation changes to expect in 2019. We also provide some guidance on retaining European employees during and post Brexit.

Our Spring HR update seminar programme 'Performance Management' is now available for you to book a place at dates and venues across the UK here.

• The Good Work Plan: "The biggest package of workplace reforms for over 20 years"

The response to the recommendations of the Taylor Review sets out a strategy covering 3 key areas, with measures to address these - some at a date to be specified in the future.

• Complaining about defamation can amount to a "protected disclosure" for the purposes of a whistleblowing claim

In considering Ibrahim v HCA International Ltd the EAT has highlighted that individuals who complain to their employer about defamation could mount a successful whistleblowing claim, providing the other requirements for such a claim are met.

• Consultation Paper on extending rights relating to redundancy and women on maternity leave

Following research showing that pregnancy and maternity discrimination is still prevalent in the workplace, the Government has published a consultation paper on whether the extended protection offered to women who were made redundant, whilst on maternity leave, should be extended.

• Constructive knowledge and disability discrimination

In Lamb v Garrard Academy the Employment Appeal Tribunal has overturned a tribunal's finding that a school had no knowledge of an employee's disability until a date four months later than evidence showed that it was reasonable for them to have known this.

• Settlement Agreements - What should you be doing?

Settlement Agreements play an important role in preventing tribunal claims and restricting potential damage to your organisation. When drafting these there are various practicalities to consider and pitfalls to avoid, as well as recent legislative changes to take into account to ensure your organisation's interests are protected.

• Retaining European Employees During and Post Brexit

We provide answers to frequently asked questions over the new EU Settlement Scheme, which allows European nationals to apply for indefinite leave (settled status) or limited leave (pre-settled status) to remain in the UK.

• Key legislation changes to expect in 2019

In addition to the Good Work plan, there are a number of employment changes coming up, including Parental Bereavement leave and pay, National Minimum Pay increases, right to payslips extended to 'workers', executive pay reporting and a consultation on mandatory ethnicity pay reporting.

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The Good Work Plan: “The biggest package of workplace reforms for over 20 years”

You may have read this headline in the lead up to Christmas 2018 about the Good Work Plan (GWP) - the Government's latest response to the recommendations of the Taylor Review (see our article on the Taylor Review here).In summary, the GWP sets out the Government's strategy consisting of three key ideas:

• Fair and decent work;
• Clarity for employers and workers; and
• Fairer enforcement.

The GWP sets out a whole host of proposed measures to be implemented at some point in the future (some known and some unknown), including:

• Legislation to improve the clarity on employment status;
• Introducing a right to request a more predictable and stable contract for all workers;
• Producing an online tool that determines employment status;
• Extending from one week to four weeks, the consideration of the relevant break in service for the calculation of the qualifying period for continuous service;
• Launching a holiday pay awareness campaign;
• Requiring employment businesses to give agency workers a 'key information' document which sets out certain prescribed information concerning their relationship (including information about pay, benefits, costs, deductions and fees, and a representative example statement which illustrates the remuneration which the individual seeking work can expect to receive) - this comes into force on 6 April 2020.
• Extending the right to a written statement to all workers and making it a 'day 1' right - this comes into force on 6 April 2020.
• Changing the rules for calculating a week's pay for holiday pay purposes, increasing the reference period for variable pay from 12 weeks to 52 weeks (this comes into force on 6 April 2020).
• The abolishment of the Swedish Derogation for agency workers (this comes into force on 6 April 2020).
• Increased penalties for aggravated breaches of employment law (this comes into force on 6 April 2019)
• A lower percentage being required for a valid employee request for the employer to negotiate an agreement on informing and consulting its employees (this comes into force on 6 April 2020).

Whilst we have some clarity on the Government's planned reforms, there is still a huge amount of uncertainty around certain areas such as employment status for atypical workers, particularly in the gig economy, which the Government is proposing to clarify. Employment businesses and hirers should therefore keep their eyes peeled for further developments in this area, in order to give themselves enough time to plan ahead and implement any necessary changes.

Complaining about defamation can amount to a 'protected disclosure' for the purposes of a whistleblowing claim

The case of Ibrahim v HCA International Ltd has highlighted that individuals who complain to their employer about defamation could mount a successful whistleblowing claim, providing the other requirements for such a claim are met. The Claimant in this case was an interpreter who raised grievances about his colleagues falsely blaming him for breaching confidentiality, which was particularly concerning as he worked in a hospital. He was keen to clear his name and pushed to ensure that the matter was fully investigated. When Mr Ibrahim brought a claim for whistleblowing, the original Employment Tribunal dismissed his claim, on the basis that his complaints did not fall within the realms of alleging “a failure to comply with a legal obligation” and also because he did not have a subjectively reasonable belief that his complaints were in the public interest. Both of these elements are required by section 43B(1) of the Employment Rights Act 1996.However, on appeal, the Employment Appeal Tribunal (EAT) found that the original Tribunal had erred in concluding that Mr Ibrahim's complaints were not within the scope of alleging a failure to comply with a legal obligation. It was immaterial that his grievances did not specifically refer to “defamation” as the wording of his complaints was clear in setting out that he was concerned about damage to his reputation. Section 43B(1) is wide enough to cover allegations of defamation, and generally claims in tort or for breach of a statutory duty.

Comment

Ultimately, Ibrahim's appeal to the EAT failed due to the public interest point, but the decision on defamation is noteworthy. The reason his appeal failed was that there was no evidence that he held a subjectively reasonable belief that his claims were in the public interest. At the time of making his complaints, Mr Ibrahim made it very clear that he was concerned with his own personal circumstances (clearing his name) and there was no evidence that he believed at the time that his complaints were in the public interest. In order for a Claimant to succeed on this point, the Tribunal needs to be satisfied that there was both a subjective belief that the claim was made in the public interest, and that the belief was objectively reasonable.

Consultation Paper on extending rights relating to redundancy and women on maternity leave

The Government has published a consultation paper on whether the extended protection offered to women who were made redundant, whilst on maternity leave, should be extended. The consultation follows research from the Department for Business, Energy and Industrial Strategy and the Equality and Human Rights Commission which demonstrates that pregnancy and maternity discrimination is still far too prevalent in the workplace. Currently, under regulation 10 of the Maternity and Parental Leave etc 1999, if a woman on maternity leave is selected for redundancy, she must be given priority over other employees at risk of redundancy when the employer offers suitable alternative employment. The consultation recommends extending the current protection afforded under the above Regulations to those women who have returned from maternity leave in the previous six months. It also considers whether it should be extended to those employees who have told their employer that they are pregnant, are on adoption leave, shared parental leave or extended periods of parental leave. The closing date for responses to the consultation is 5 April 2019.

Constructive knowledge and disability discrimination

In Lamb v Garrard Academy the Employment Appeal Tribunal has overturned a tribunal's finding that a school had no knowledge of an employee's disability until 21 November 2012, where the evidence showed that it was reasonable for them to have known that she was a disabled person four months prior to this. Ms Lamb had been employed as a teacher at The Garrard Academy, and was on sick leave from 29 February 2012 because of reactive depression and alleged bullying at work. In March 2012 she raised a grievance that was upheld. However, the grievance report presented to the chief executive was regarded as inadequate and was set aside without a review of the supporting material. On 18 July 2012 Ms Lamb met with the chief executive and told her that she was suffering from post-traumatic stress disorder (PTSD), caused by childhood experiences, which could be triggered by difficult situations. Occupational Health subsequently assessed her. Occupational Health concluded in a report dated 21 November 2012 that Ms Lamb's symptoms of reactive depression probably began in September 2011, and found that she had a good prognosis for full recovery if any outstanding issues relating to her grievance were resolved. The respondent conducted a fresh investigation, which rejected her grievance in January 2013. Ms Lamb complained to an employment tribunal of unlawful disability discrimination. Her complaint included a claim of failure to make reasonable adjustments all connected with the School's handling of the report. The tribunal allowed her claim for failure to make reasonable adjustments from 21 November 2012. It found that the School had actual knowledge of her PTSD from 18 July 2012, but concluded that it did not know that she was a disabled person until 21 November 2012, because only then, one year after her symptoms had first appeared, was the long-term element of the definition of disability satisfied. As a result, no duty to make reasonable adjustments arose before that date. Ms Lamb appealed to the EAT. The EAT held that the School ought reasonably to have known that the employee was a disabled person by early July 2012, and had actual knowledge of her disability by 18 July 2012. Accordingly, the tribunal had erred in finding that there was no duty to make reasonable adjustments prior to 21 November 2012. The tribunal had also erred in finding that none of the adjustments contended for by the employee were reasonable.

Practical Points

This is a useful authority on constructive knowledge in relation to disability discrimination. It is a reminder to employers of the possible danger of failing to refer a matter to Occupational Health and then claiming not to know of an employee's disability.

Settlement Agreements - what should you be doing?

Settlement Agreements play an important role in preventing tribunal claims and restricting potential damage to your organisation. There are various practicalities to consider, pitfalls to avoid and legislative changes in the last year which should be considered when drafting Settlement Agreements, to ensure your organisation's interests are protected including;

• How to conduct protected conversations, considering the legal status and admissibility of evidence;
• How to open negotiations, determine (i) your fall-back position and (ii) when and how to walk away;
• The tax treatment of payments including payments in lieu of notice following the changes introduced on 6 April 2018;
• Ensuring the transfer of property including phone, phone number and laptop;
• Enforceability of confidentiality clauses and the impact of Non-Disclosure Agreements;
• Considering alternatives to Settlement Agreements including dismissal and/or facilitating a settlement via ACAS;
• How to enforce a Settlement Agreement if things go wrong;
• Forthcoming changes in this area.

If you require any advice or bespoke training on any of the above issues please contact Rena Magdani on 0345 2725715 or by email: rena.magdani@freeths.co.uk

Retaining European Employees During and Post Brexit

EU Settlement Scheme - FAQs

What is the EU Settlement Scheme?

The EU Settlement Scheme is an application process for European nationals to apply for indefinite leave to remain (settled status) or limited leave to remain (pre settled status).

 

Who needs to apply for the EU Settlement Scheme?

Almost all European nationals and the family members of European nationals will need to register on the EU Settlement Scheme. This includes European nationals who already hold a permanent residence document. The only European nationals who do not need to register on the scheme are Irish nationals, European nationals with indefinite leave to remain and European nationals who are also British Citizens.

 

Is the Scheme open for applications?

On 21 January 2019, the Scheme opened for a further phase of testing. Any European national or family member who holds a biometric passport or ID card can apply. The Scheme will open fully by 30 March 2019.

 

Can a European national still work in the UK if they have not registered on the Scheme?

At the moment the Scheme is voluntary, and will remain so until 30 June 2021 if we reach a deal with the European Union, and until 31 December 2020 if no deal is reached. European nationals may remain in employment in the UK without registering on the Scheme during this voluntary period. At the end of the voluntary period, the Scheme will become mandatory. A European national will only be able to continue working lawfully in the UK if they have registered on the Scheme once it becomes mandatory to do so.

 

As an employer do I have a duty to ensure my European employees are registered?

No, technically not. The responsibility falls to the individual to ensure they are registered. However if an employer continues to employ a person who needs to register at a time when the Scheme is mandatory that employment will be unlawful and the employee will be considered to be an illegal worker. The employer could face a civil penalty of up to £20,000 per illegal worker.

 

Is there a fee for registering on the Scheme?

The fee is currently £65 for people over the age of 16 years and £32.50 for those under the age of 16 years. The Prime Minister has however announced that the fee will be scrapped. The fee may still need to be paid but it will be refunded.

 

As an employer, how can I support my European workforce?

• You could review your HR records to understand which employees will need to register on the Scheme.
• To support the employees you could ensure they have access to information about the new Scheme.
• Many employers have offered to provide support with the application process. This could include providing access to an Android phone and laptop or PC and time to complete the application.
• To minimise risk as an employer of European nationals you should ensure that you keep a record of the date on which the Scheme becomes mandatory and that you undertake a full audit of your right to work records before this date and bring them up to date.

If you or your employees would benefit from further information about the Scheme or the process for applying, you can contact Emma Brooksbank - emma.brooksbank@freeths.co.uk or any member of our Immigration Team. We were happy to provide briefings, workshops and support to employers of all sizes.

Key legislation changes to expect in 2019

There are a number of upcoming employment legislation changes to look out for in 2019 (in addition to the Good Work Plan outlined above). The key changes are:

The Parental Bereavement (Leave & Pay) Act 2018

• The Parental Bereavement (Leave & Pay) Act 2018 received Royal Assent on 13 September 2018
• The Act provides a right to 2 weeks off work for employees who have lost a child below the age of 18
• This right applies irrespective of their length of service
• Regulations will be published in due course to cover remuneration during this time, amongst other things
• The Act could be fully in force by April 2020.

An increase in the National Minimum Wage

• Both the National Living Wage (NLW) and National Minimum Wage (NMW) rates will increase in April 2019
• Under the NLW, the minimum hourly rate for workers aged 25 and over will increase from £7.83 to £8.21
• Meanwhile, the NMW rate for workers aged between 21-24 will increase from £7.38 to £7.70 per hour
• The rate for 18-20 year olds will increase from £5.90 to £6.15 per hour, and those over compulsory school age but under 18 will see an increase from £4.20 to £4.35 per hour
• The minimum rate for apprentices will also increase from £3.70 per hour to £3.90 per hour, providing the apprentice is under the age of 19, or 19 and over but in the first year of their current apprenticeship.

The legal right to payslips is to be extended to those classed as 'workers'

• From 6 April 2019, the legal right to a payslip will be extended to include those who are classed as 'workers'
• Employers will need to include the total number of hours worked, on payslips for employees whose wages vary due to differing hours
• Businesses ought to work with their payroll teams to ensure that the correct procedures are in place ahead of April's deadline.

Executive pay reporting has been introduced

• From 1 January 2019, UK quoted companies with more than 250 employees will need to report on ratios between the CEO and employees' pay and benefits
• The first tranche of reporting will actually start in 2020, but affected companies will need to start gathering the evidence in order to calculate their pay ratios before the deadline
• The data will be supplied in the directors' remuneration report.

Government consultation on Mandatory Ethnicity Pay Reporting

• Questions have been asked about what ethnicity pay information should be reported by employers to allow for meaningful action on this topic
• The consultation looked at who should report such information, and next steps
• The consultation closed on 11 January 2019 and the Government is currently considering the feedback received
• We may see further action on this later in the year.

Our Spring HR update seminar programme 'Performance Management' is now available for you to book a place at dates and venues across the UK here.