January 20, 2021

Employment legal update #42 | February 2021

Employment law update

In this month's legal update, our Employment & HR team cover:

Employment law news including staff dismissals after raising Covid-19 concerns; the UK's gender pay gap; The Immigration and Social Security Co-ordination bill; regulators made to provide for payment of NICs; platinum jubilee four-day weekend; a free one year-long visa extension for over 6,000 frontline workers; the new national minimum wage; new guidance on filtering rules for criminal records certificates.

Commentary on recent employment law tribunal cases, including cost justifying discriminatory acts; health and safety detriment extended to workers; aggregated disclosures did not amount to whistleblowing.



A report published by a whistleblowing charity from its analysis of over 600 calls to its advice line between March and September 2020, has found that 41% of callers were ignored and 20% were dismissed after raising their concerns related to COVID-19, most of which were about furlough fraud and public safety (especially a lack of PPE and not observing social distancing). Managers were found to be more at risk of dismissal, with 32% of managers losing their jobs compared with 21% of non-managers.

The report referred to above also indicated that small organisations (those below 50 employees) were more likely to commit furlough fraud (comprising 76% of total callers).

The Office of National Statistics has published figures showing that the UK's gender pay gap, calculated using the median hourly earnings of full-time employees, has fallen to 7.4% from 9% in 2019. This means that, as of April 2020, female workers earned 92.6% of male employees' hourly pay. In particular, the gender pay gap for workers under 40 was virtually zero.

On 11 November 2020, the Immigration and Social Security Co-ordination (EU Withdrawal) Bill received Royal Assent and became the Immigration and Social Security Co-ordination (EU Withdrawal) Act 2020. This Act ended free movement of persons under retained EU law in the UK at 11.00 pm on 31 December 2020 and repeals other retained EU law relating to immigration.

On 5 November 2020, regulations were made to provide for payment of NICs in light of the extension of the "off-payroll working" tax rules from 6 April 2021.The extension shifts the compliance burden from workers' personal service companies to the medium and large clients for which they work, by treating clients as employers for income tax and NICs purposes. The regulations aim to effect this treatment for NICs purposes, allow HMRC to recover unpaid NICs under these rules from other persons in the supply chain, and ensure that existing NICs rules continue to apply to arrangements outside the extension. The regulations mainly follow the draft published on 22 January 2020, and subsequent revisions In particular, which differs from the draft regulations, these ones:

  • Exclude wholly non-UK clients and reduce the window for HMRC to seek recovery from persons other than clients to 12 months (rather than 24), reflecting the PAYE position.
  • Impose on clients an obligation, either if required by workers or anyone with which clients contract as part of the service arrangements, to state whether they are "small" for a tax year. This is enforceable if not provided within the later of 45 days after the request and 45 days before the start of the tax year.
  • Ensure that the rules only apply to work carried out after 5 April 2021, with payments for services straddling this date split on a "just and reasonable" basis and representations made as to status before 6 April 2021 treated as having being made on that date.

The Government has announced the creation of a Platinum Jubilee four-day weekend in June 2022 as part of the celebration of the Queen's 70th anniversary. The late May bank holiday will be moved to Thursday 2 June, while an additional bank holiday will take place on Friday 3 June.

The Home Secretary has announced a free, one year-long visa extension for over 6,000 frontline workers. The announcement expands on the Government's earlier offer of free visa extensions for health professionals whose visas were due to expire between 31 March 2020 and 1 October 2020, with the extension period now coming to an end on 31 March 2021. A range of doctors, nurses, paramedics, midwives, occupational therapists, psychologists and other allied health professionals will be eligible.

The new national minimum wage rates have been announced which will come into effect from April 2021 as follows:

  • Age 23 or over (NLW rate): £8.91 (up 2.2% from £8.72)
  • Age 21 to 22: £8.36 (up 2% from £8.20)
  • Age 18 to 20: £6.56 (up 1.7% from £6.45)
  • Age 16 to 17: £4.62 (up 1.5% from £4.55)
  • Apprentice rate: £4.30 (up 3.6% from £4.15)
  • Accommodation offset £8.36 per week (up 2% from £8.20)

Following the Government's announcement in July 2020 about proposed changes to the criminal records disclosure regime, the Disclosure and Barring Service (DBS) has published new guidance dealing with the filtering rules for criminal records certificates which now apply, effective from 28 November 2020.

  • There will no longer be a requirement for youth cautions, reprimands and warnings to be automatically disclosed on standard and enhanced DBS certificates.
  • The "multiple conviction" rule, which requires the automatic disclosure of all convictions where an individual has more than one conviction (regardless of the nature of the offence or sentence), will be removed.
  • These changes are intended to ensure that the right balance is struck between rehabilitating offenders and protecting the public. They also address the Supreme Court's decision in R (on the application of P) v Secretary of State for the Home Department and another, which considered the sensitive nature of this balancing exercise.
  • The changes to the underlying legislation were set out in the draft Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975 (Amendment) (England and Wales) Order 2020, which has been approved by Parliament but is not yet in effect. The Order will amend the Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975 by changing the definition of "protected caution" to achieve a result consistent with the above.
  • Enhanced DBS certificates may include information relating to a protected caution or conviction if the police consider that it is relevant to the workforce in which the individual intends to work.


Cost can justify discriminatory acts

The Court of Appeal, in Heskett v Secretary of State for Justice, has held that, while saving or avoiding cost cannot, of itself, justify indirect discrimination, where an employer needs to reduce expenditure, which may include staff costs, in order to work within its budgetary constraints, this can constitute a legitimate aim for the purposes of the justification test.

Following this finding, the Court upheld the decision of an employment tribunal to dismiss a claim of indirect age discrimination brought by a probation officer who had been placed at a disadvantage by the introduction of a new pay progression policy at the National Offender Management Service (NOMS), which increased from 8 years to 23 years the time needed to progress from the bottom to the top of the pay band. The Court of Appeal held that the tribunal had been entitled to conclude that the reduction in the rate of pay progression pursued the legitimate aim of NOMS operating within its means after its pay budget had been frozen by central government.

Health and safety detriment protection is extended to workers

The EU Health and Safety Framework Directive provides protection from detriment on the grounds of health and safety and is implemented into UK law by section 44 of the Employment Rights Act 1996. However, this section covers only "employees". The Directive goes wider than that, in requiring all those who fall within the autonomous meaning of "worker" specific to EU law, to be so protected. As such, in R (on the application of the Independent Workers‘Union of Great Britain) v Secretary of State for Work and Pensions and anor, the High Court has held that the UK has failed properly to implement the relevant articles of the EU Health and Safety Framework Directive in restricting protection from detriment on health and safety grounds in the ERA to “employees” only. In contrast, the Directive covers any person who performs services for and under the direction of another person in return for remuneration. As such, the protection must also extend to ‘workers’ as defined in s.230(3)(b) ERA.

Aggregated disclosures did not amount to whistleblowing

In Simpson v Cantor Fitzgerald Europe, the Court of Appeal has held that an employment tribunal was right to reject a whistleblowing claim which was based on 37 separate alleged disclosures. The tribunal had not erred in not aggregating the disclosures to look at the ‘composite picture’. Although individual communications, taken together, can potentially amount to a protected disclosure, on the facts of this case none of the communications amounted to a protected disclosure, whether taken individually or in aggregate.

The claimant made a number of fairly continuous complaints regarding a process known as “front running”, an illegal practice not dissimilar to insider dealing. The employers noted that he was a constant complainant; in addition they had issues with his working practices, including his ability to generate business, and also with his timekeeping. Eventually his conduct was referred to HR, whereupon he was suspended and dismissed. He brought claims in the tribunal that he had been automatically unfairly dismissed for whistleblowing.

The tribunal gave short shrift to the claimant’s 37 alleged individual disclosures, considering that neither together nor in aggregate did they constitute protected disclosures. The tribunal accepted the evidence of the employer that he had become impossible to work with and this was the reason he was dismissed. His appeal failed.

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