Employment Law Developments: Looking Ahead to 2020


Posted by Joanne Davies, 16th January 2020
We look ahead to employment law developments this year. The decisive result of December 2019’s general election means at least one key date for 2020: 31 January 2020, the date of the UK’s withdrawal from the EU.

From an employment law perspective, 6 April 2020 is also very significant with a number of developments ranging from changes to required employment particulars, increased costs for employers when making certain termination payments and increased rights for agency workers. There are plenty of developments in 2020 to take your mind off Brexit and take a careful look at the April 2020 changes in particular. There are lots of them!

Employment Law Developments:

January

April

Other Employment Law Developments

Immigration

Pensions

Upcoming cases

Here are a selection:

  • Royal Mencap Society v Tomlinson-Blake
  • Uber BV and others v Aslam and others
  • Ali v Capita Customer Management Ltd and Hextall v Chief Constable of Leicestershire Police
  • Various Claimants v WM Morrisons Supermarket

JANUARY

Brexit

The European Union (Withdrawal Agreement) Bill 2019-20 was passed by the House of Commons on 9 January 2020 and is currently being debated in the House of Lords.

The UK is scheduled to leave the EU on 31 January 2020 and because of the Brexit transition period (until 31 December 2020) there will be no immediate impact in the employment law context following withdrawal from the EU.

APRIL

Increases to statutory rates

From 1 April 2020, the hourly rates of the National Living Wage (for workers aged 25 and over) and the National Minimum Wage increase as follows:

  • For workers aged 25 and over from £8.21 to £8.72
  • For workers aged 21- 24 from £7.70 to £8.20
  • For workers aged 18- 20 from £6.15 to £6.45
  • For workers aged 16- 17 from £4.35 to £4.55
  • Apprenticeship rate from £3.90 to £4.15 

These changes represent increases of between 4.6% and 6.5% and it is estimated that 2.8 million workers will benefit.

At the same time that the increases were announced, the Government stated its intention to extend the National Living Wage to cover workers aged 23 and over from April 2021 and to those aged 21 and over within five years. This is expected to benefit around 4 million low paid workers. Interestingly, at the Conservative party conference, back in September 2019, the Chancellor Sajid Javid announced his plan to raise the rate of the National Living Wage to £10.50 within the next five years.

From 5 April 2020:

  • Statutory maternity, adoption, paternity and shared parental leave pay increases from £148.68 a week to £151.20 (or 90% of average weekly earnings if this is less than the statutory rate).

From 6 April 2020:

  • The weekly rate of statutory sick pay increases from £94.25 to £95.85.

Changes to required employment particulars

Currently, only employees have the right to a written statement of employment particulars. However, the Employment Rights (Miscellaneous Amendment) Regulations 2019, which come into force on 6 April 2020, extend the right to a written statement of employment particulars to workers as well as to employees commencing work on or after 6 April 2020. It will be important to identify those who are workers as opposed to employees, because a different type of statement will be required.

The Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018, which also come into force on 6 April 2020, provide that the written statement of employment particulars must be given before, or on the first day of work rather than within two months as at present. However, that’s not all. Employers will also have to provide additional particulars in the written statement where work commences on or after 6 April 2020, such as:

  • The specific days of the week the employee/worker is expected to work and details on variable working hours or days.
  • Any other benefits or remuneration provided by the employer, not otherwise specified, for instance, vouchers.
  • Detail around any probationary periods.
  • Specified details about particular required training.
  • Eligibility for other types of paid leave such as paid maternity leave.

The Regulations are not straightforward. Some particulars have to be provided in a single document and others can be provided in a separate document; some have to be provided before, or on day one of employment commencing and others within two months. For example, there are different rules depending on whether certain training is required by the employer or simply offered by the employer and whether it is to be paid for by the employer or by the employee/worker. Many written statements of particulars double up as contracts and so a careful review needs to be undertaken so that:

  • New contracts are in place in anticipation of these April changes.
  • They do not inadvertently create contractual rights in attempting to comply with the new (statutory) requirements for written particulars.
  • They do not inadvertently turn workers into employees.
  • HR teams know what the position is in relation to existing employees/workers.

Employers and HR should also review their recruitment practices to ensure that the new contracts are ready to be issued before the work commences or on the first day. Our team of Employment lawyers are happy to assist in this review and a further briefing of aspects to consider and how we can help will follow soon.

Holiday pay reference period

The Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018, also include provisions relating to paid annual leave, specifically the holiday pay reference period and they amend Regulation 16 of the Working Time Regulations 1998.

The reference period for calculating average weekly pay for holiday pay purposes where there are no normal working hours and other specified circumstances will be extended from the current 12 weeks to 52 weeks (or if employed for less than 52 weeks, the number of complete weeks of employment). Weeks in which no work is done will be ignored, but the maximum length of the reference period will be capped at 104 weeks.

This change to the reference period means that employers need to assess carefully which of their staff may be affected and to ensure that their records of working hours are accurate and up to date.

Agency workers

The Agency Workers (Amendment) Regulations 2019 come into force on 6 April 2020 and abolish the so-called “Swedish derogation”. Currently, the Swedish derogation means that, in certain circumstances, an agency worker can forfeit their right to be paid the same as directly recruited workers where they enter into a contract guaranteeing pay between assignments. Because of concern about misuse by some agencies, the Swedish derogation will be removed. On or before 30 April 2020, agency workers whose existing contracts contain a Swedish derogation must be given a written statement by their agency that, with effect from 6 April 2020, the Swedish derogation in their original contract is no longer effective.

Separate regulations, the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2019, which are also in force from 6 April 2020, require temporary work agencies to provide agency work-seekers with a “Key Information Document”. This will include certain specified information such as information on the type of contract, the rate of remuneration or minimum expected rate of pay, how and when they will be paid and by whom and details of any entitlement to paid annual leave.

Our specialist Recruitment Law experts can assist you with advice and documentation if your organisation is affected either by the Swedish derogation change or the key information requirements for work-seekers.

Taxation of termination payments

From 6 April 2020, a new employers’ class 1A NICs of 13.8% will be chargeable on any termination payments in excess of £30,000 that are subject to income tax. This brings the treatment of termination payments for NICs purposes in line with the rules on the income tax treatment of termination payments. The NIC payment will be collected through “real time” information/PAYE and will need to be paid and reported to HMRC at the time the NIC liability arises rather than after the end of the tax year.

This change should have taken place two years ago, in April 2018, and the new implementation date may have slipped under the radar for some employers but it is a significant development. It will mean additional costs and increased administration for employers where the termination payment is over £30,000 both of which provide a clear incentive to finalise any significant settlement agreements before 6 April 2020.

Information and consultation

The Employment Rights (Miscellaneous Amendment) Regulations 2019, which come into force on 6 April 2020, amend the Information and Consultation of Employees Regulations 2004 by lowering the 10% threshold required regarding a request to set up information and consultation arrangements to 2% of employees, subject to the existing minimum of 15 employees.   

Parental bereavement leave

We are still waiting for regulations to implement the Parental Bereavement (Leave and Pay) Act 2018 and these are expected to be in force in April 2020 but the exact date is unknown at the moment.

The right to parental bereavement leave will allow parents and primary carers with 26 weeks’ continuous service, two weeks of paid leave (probably at the statutory rate) where they suffer the loss of a child under the age of 18 or a stillbirth after 24 weeks of pregnancy. Employees without the relevant service will be entitled to two weeks of unpaid leave. The leave will have to be taken at any time within 56 weeks of the bereavement and can be taken as a single block or as two separate weeks. Details of the notice requirements will be set out in the regulations and these are expected to be flexible so that there is no onerous burden on parents and carers.

Off-payroll rules in the private sector

The off-payroll working rules tightening up on IR35 compliance are due to be extended to the private sector with effect from 6 April 2020 although this date is not confirmed. There was no mention of IR35 in the Queen’s Speech on 19 December 2019 and many commentators thought that implementation would be delayed. However, on 7 January 2020, the Government announced a review into the off-payroll rules and the review will look at whether any “further steps can be taken to ensure the smooth and successful implementation of the reforms”. The review will be completed by mid-February 2020 with no indication that the roll out for April 2020 will be delayed.

OTHER EMPLOYMENT LAW DEVELOPMENTS

Employment Bill 2019 – 20

Following the election of the new Government, the Queen’s Speech took place on 19 December 2019. A new Employment Bill was announced and many of its provisions were previously included in the Good Work Plan published in 2018. Legislation is expected this year in relation to:

  • Extending the period of redundancy protection for expectant and new mothers returning to work after maternity leave until six months after the end of maternity leave (and possibly changes to other types of family leave).
  • Introducing the right to additional paid neo-natal leave for parents whose children spend two or more weeks in neo-natal care.
  • Providing one week of leave for unpaid carers.
  • Introducing the right to request a more predictable work contract.
  • Establishing a single enforcement body for employment rights.
  • Introducing a potential requirement to offer flexible working as a default option.
  • Strengthening the rules on tips and service charges so that distribution of these is more transparent.

Sexual harassment and Non-disclosure agreements (NDAs)

Continued high profile allegations of sexual harassment in all types of organisations and sectors make this a key topic once again for the year ahead.

In July 2019, the Government published its response to a consultation exercise on measures to prevent the misuse of confidentiality clauses in situations of workplace harassment or discrimination. A key proposal relates to legal limitations whereby, no provision in an employment contract or settlement agreement can prevent someone from making any kind of disclosure to the police, regulated health and care professionals or legal professionals. Other proposals are that the effect and limits of confidentiality clauses need to be explained in clear, plain English to the individual and they will also need to receive specific advice on the limitations of confidentiality clauses in a settlement agreement in order for it to be valid.

There is no information about timing other than the Government will legislate “when Parliamentary time allows”.

Data protection

The right of access (known as subject access) is a fundamental right of the General Data Protection Regulation (GDPR). Many employers are experiencing a significant increase in subject access requests from employees often in the context of grievances or Employment Tribunal proceedings. Initial guidance on this right was published by the Information Commissioner’s Office (ICO) in April 2018. The ICO has now drafted more detailed guidance and is currently consulting on this. The consultation replies will inform the final, published version.

The consultation period ends on 12 February 2020.

Whistleblowing

In July 2018, the Chair of the All Party Parliamentary Group (APPG) on Whistleblowing committed “to put whistleblowers at the heart of our work and to produce world class, gold standard draft legislation that would protect those who speak out in the public interest”. The APPG’s Report was published in July 2019. It found that the UK regulatory framework for whistleblower protection is complicated, overly legalistic and fragmented and that the definition of whistleblowing and whistleblowers is too narrow.

The APPG has put together a 10 Point Plan and says that the need for reform is urgent having found that three quarters of whistleblowers were retaliated against by their employers and only 5% said that their employers were generally supportive of whistleblowers. The APPG states that the adoption of effective whistleblowing systems not only benefits society at large but has considerable business benefits. There is no information at the moment about any potential whistleblowing changes but this is a topic worth keeping an eye on in 2020.

IMMIGRATION

With the Conservative party winning a majority in the General Election in December 2019, we expect to see wide ranging changes to the UK’s immigration system. It is unlikely much will change in 2020, but the Government reiterated its commitment to introduce a completely new, Australian-style, immigration system as soon as 2021.

Brexit and Immigration

By way of recap, the rights of the EEA nationals already residing in the UK are protected under the EU Settlement Scheme. The Scheme is reported to work well. In excess of 2.2 million EEA and Swiss nationals together with their families, out of the estimated 3.4 million resident in the UK, have already been granted status under the Scheme.

Applications under the Scheme are free and reasonably straightforward. That said, there are reports of a high percentage of unsuccessful decisions being overturned on administrative review, which could suggest that the application process is not working as well for everyone.

The deadline for applying under the Scheme remains 30 June 2021, unless the UK leaves the EU without a deal, in which case the deadline will be 31 December 2020.

New immigration system in 2021

Although, there have not been detailed policy announcements published by the new Government as of yet, the Queen’s Speech in December 2019 provided an outline as to what we can expect from the new immigration system to be introduced in 2021.

The main proposals are as follows:

  • Ending free movement under the UK law, whilst protecting status of Irish citizens.
  • Creating visa schemes to address staff shortages in public services, to include a fast track scheme specifically for the NHS.
  • Increasing quotas under the Seasonal Agricultural Workers Scheme which is currently being piloted.
  • Increasing Immigration Health Surcharge (currently at £400 per year for most applicants).
  • Creating a single immigration system for EEA and non-EEA migrants with three broad categories aimed at:
    • migrants demonstrating exceptional talent, sponsored entrepreneurs setting up a new business and investors;
    • skilled workers with a job offer;
    • migrants in low-skilled sector specific work positions, youth mobility and short-term visits – these subcategories are to offer no option for settlement.

Notably, the Queen’s Speech did not refer to some previous proposals contained in the White Paper published in December 2018 or the proposal to re-introduce the Post-Study Work visa.

In a separate announcement from the Home Office, it has been confirmed that world leading scientists and researchers will become eligible to benefit from a fast-tracked process to apply to come to the UK. The extended list of fellowships is to be added to the existing Tier 1 (Exceptional Talent) category.

For more detail, we will need to await further announcements from the Government which are to follow in due course. It is expected, that the Migration Advisory Committee, commissioned to comment on various proposals, is to publish its report this month. This report will hopefully provide some further detail, particularly as the new system may be in place in just over a year.

Visiting the UK after Brexit

Those employers, who need to oversee future trips of their staff from the EU to the UK, will be pleased to know that there have been some further updates to the Home Office guidance. If the UK leaves the EU with a deal, EEA and Swiss citizens will continue to be able to travel to the UK with no changes until 2021, and possibly beyond. This includes the ability to use national ID cards for border checks, which are to be phased out in 2021.

If the UK leaves the EU without a deal, EEA and Swiss nationals will still be able to come to the UK for holidays and short visits without having to apply for a visa and also using national ID cards. These, however, are to be phased out in 2020 in a no deal scenario.

It has also been confirmed that travellers will continue to be able enter the UK on a passport which has less than 6 months validity remaining. The Home Office pledges to give travellers sufficient notice to prepare for any changes.

For more information please contact a member of our Immigration team.

PENSIONS

The Pension Schemes Bill was re-introduced in Parliament on 7 January 2020 after being initially introduced in October 2019.  It had been put on hold due to the general election. Amongst many other changes such as a more onerous framework for the transfer of occupational pension savings to ensure that such transfers are made to non-fraudulent schemes, the Bill’s measures give the Pensions Regulator increased enforcement powers “to punish abuse and wrongdoing within the occupational pensions industry” (explanatory note to the Bill) by introducing three new criminal offences and a new power to issue civil penalties of up to £1 million where an employer deliberately avoids an employer debt.  It will be a criminal offence to have committed “wilful or grossly reckless behaviour” in relation to a pension scheme, which will carry a prison sentence of up to 7 years.  The Regulator’s information-gathering powers will also be extended and the new financial penalty regime will apply if a person knowingly or recklessly provides false or misleading information to the Regulator.

For more information please contact a member of our Pensions team.

UPCOMING CASES

Several important employment cases will be heard in the Supreme Court in 2020.

Royal Mencap Society v Tomlinson-Blake

This case will be heard from 12-13 February 2020, and will address how sleep-in shifts should be viewed for the purposes of NMW legislation. The Court of Appeal held that sleep-in workers are only entitled to receive NMW when they are awake for the purposes of working. This followed on from a complex array of cases at Employment Tribunal and Employment Appeals Tribunal level. It is hoped that the Supreme Court decision will provide a clear conclusion.

Uber BV and others v Aslam and others

From 22-23 July 2020 the Supreme Court will hear arguments as to the employment status of Uber drivers, the Court of Appeal having previously held that the drivers were “workers” for the purposes of the Employment Rights Act 1996, Working Time Regulations 1998 and National Minimum Wage Act 1998. Although this will undoubtedly attract a lot of media attention, as the decision is likely to be very fact-specific it will not necessarily have huge implications for cases that follow.

Ali v Capita Customer Management Ltd and Hextall v Chief Constable of Leicestershire Police

In May 2019, the Court of Appeal held that failing to pay male employees enhanced shared parental pay (in circumstances where there was enhanced maternity pay) was neither direct nor indirect sex discrimination, nor a breach of the equal pay sex equality clause. Permission to appeal to the Supreme Court has been given and the Supreme Court will consider these cases together. A date is still to be confirmed.

Various Claimants v WM Morrisons Supermarket

We are awaiting the Supreme Court’s judgment on this case. The Court of Appeal previously upheld the decision that Morrisons were vicariously liable for a deliberate (and malicious) data breach by one of their employees. This judgment is likely to have broader implications for the law on vicarious liability. If the decision is upheld, employers are advised to check their insurance policies to ensure that they are adequately covered for such situations.

As can be seen from the above, there are a number of important developments in April 2020 that employers and HR managers will need to address in the very near future. Looking ahead, as with 2019, Brexit will still dominate the news but with the Government’s healthy majority there certainly appears to be plenty of Parliamentary time available for it to progress its legislative objectives many of which will have significant implications for employment, immigration and pensions law and HR practice and procedure.

This article has been co-written by Joanne Davies and Debra Gers.

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