Immigration related developments
The UK was originally due to leave the EU on 29 March 2019, but two extensions and a General Election later and the UK now looks set to leave the EU on 31 January 2020. The Conservatives gained a majority in the recent General Election and therefore it is expected that the Withdrawal Bill will put to MPs before Christmas for a further reading.
Our article on what a "no-deal" Brexit could mean for workplace rights can be found here and this was supplemented later in the year when details of the temporary immigration status known as European Temporary Leave to Remain were released.
In the meantime, the EU Settlement Scheme ("EUSS") went "live" in March 2019, in preparation for the end of free movement from 2021. The latest statistics confirm that over two million EEA nationals have applied and this has resulted in 61% being granted settled status, 38% being granted pre-settled status and two people being refused. The EUSS will remain open for applications until 31 December 2020 (in the event of a no-deal) and 30 June 2021 (in the event a withdrawal agreement is agreed). Our latest summary on what each outcome means for workplace rights can be found here.
2) Tier 1 Changes
During the course of 2019, the Tier 1 visa category was overhauled with the Tier 1 (Entrepreneur) visa scheme ending on 29 March 2019 and the Tier 1 (Graduate Entrepreneur) visa category being closed from 5 July 2019. Instead, two new Tier 1 visa categories were introduced, namely the "start-up" and "innovator" visas to encourage international entrepreneurs looking to establish a business in the UK. Crucially, both new Tier 1 routes require an applicant's business or business idea to be assessed for innovation, viability and scalability and then endorsed by an approved body.
The Government's intention was to boost business innovation in the UK; however, the recent statistics from the Home Office shows that only four applications under the Tier 1 Innovator route were granted between April and June 2019.
3) Expansion of the Shortage Occupation List
The Shortage Occupation List ("SOL") is an official list of jobs for which there are not enough resident workers to fill vacancies. The Migration Advisory Committee regularly reviews the SOL and following its latest recommendations, the Home Office announced an expansion to the SOL. From early October 2019, the SOL includes psychologists, architects, veterinarians, web designers and acknowledges the growing demand for scientists in the UK. This is a welcome change for businesses as the expansion means that the SOL will now cover around 9% of the jobs in the UK labour market, compared to only 1% previously. It remains the case that it is not necessary to complete the resident labour market test for any vacancies on the SOL, so this benefit along with the more extensive job shortages, should further assist businesses in employing non-EEA nationals more easily.
4) PhD level jobs move to unrestricted certificates of sponsorship
Most businesses will be aware that the number of Tier 2 visas that can be issued to migrants living outside the UK is limited to 20,700 annually and these are split into monthly allocations. Approximately 2,000 Tier 2 visas are made available by the government each month. PhD jobs would originally be subject to the requirement of a restricted certificate of sponsorship within the annual allocation; however, from 6 October 2019 this will no longer apply. From this date, individuals can be assigned to PhD level jobs via an unrestricted certificate of sponsorship. This means that PhD level jobs will be treated more favourably and in turn this will free up places for other skilled roles that contribute to the UK economy within the monthly allocation process.
Employment related developments
5) Holiday Pay
The Court of Appeal confirmed in Harpur Trust v Brazel that the correct approach to calculating holiday pay for employees on permanent contracts whose pay varies is to work out the average weekly pay over a 12-week reference period. It rejected the employer's argument in this case that Mrs Brazel's holiday pay entitlement should be capped at 12.07% of annual earnings to mirror the position of those who work regular hours. The 12-week reference period produced a figure that represented 17.5% of Mrs Brazel's annual pay; this illustrates the potential exposure to unlawful deductions claims for employers who use the 12.07% method to calculate holiday pay for workers whose pay varies.
From 6 April 2020, this 12-week reference period will be increased to 52 weeks when Part 3 of the Employment Rights (Employment Particulars and Paid Annual Leave) (Amendment) Regulations 2018 comes into force.
The EAT confirmed in East of England Ambulance Service NHS Trust v Flowers that, where employees undertake voluntary overtime, this must be included in holiday pay calculations where it is sufficiently regular and settled. The rationale is that such pay is part of normal remuneration. The question of whether voluntary overtime is sufficiently regular and settled is to be determined on a case-by-case basis by employment tribunals and, as such, the EAT did not provide further guidance on this point.
6) Senior Management and Certification Regime
The Senior Management and Certification Regime will be extended to all firms regulated or authorised under the Financial Services and Markets Act 2000 (FSMA) from 9 December 2019. The FCA will alter its previous approach, with the new regime intended to be proportionate and flexible in order to accommodate the range of financial services firms that will become subject to the rules. There will be three categories of firm ('Limited scope' firms, 'Core' firms and 'Enhanced' firms), each being subject to varying requirements.
The change is expected to affect around 47,000 firms including financial advisers, asset managers, mortgage brokers and consumer credit firms.
7) Itemised pay statements
Entitlement to receive itemised payslips was extended to workers from 6 April 2019. Since this date, the only individuals who are not entitled to receive itemised payslips are those who are genuinely self-employed. These payslips must be provided at or before the time at which payment of wages or salary is made, and must contain the following information:
- Gross amount of wages or salary;
- The amounts of any deductions from that gross amount and the purposes for which they are made (subject to the employer having an ability to provide a statement of fixed deductions instead);
- Net amount of wages or salary and, where different elements of the net amount are paid in different ways, the amount and method of each payment;
- If the amount of wages or salary varies according to time worked, the employer must include the total number of hours worked for which variable pay is received.
Since 6 April 2019, workers have also had the ability to enforce this right by making a reference to an employment tribunal, which can be made where their employer does not give them a statement at all, or where they are given a statement that does not comply with the above requirements.
8) Vegetarianism ruled not to be a legal disability
In September 2019, an Employment Tribunal found that vegetarianism could not be considered a belief when bringing a claim of discrimination on the grounds of religion or belief under the Equality Act 2010. Whilst the Tribunal ruled that the Claimant's belief was genuine and worthy, it did not concern a substantial aspect of human life and behaviour to warrant protection under the Equality Act 2010 (Conisbee v Crossley Farms Ltd). For our article on this decision please see here.
9) Altering a draft investigation report did not render a dismissal unfair
In Dronsfield v The University of Reading, the Employment Appeal Tribunal ("EAT") upheld a tribunal's decision that removing evaluative conclusions from a draft investigation report did not render a dismissal unfair. The universities in-house solicitor had recommended that the investigation report should be amended to remove the opinions given by the investigator – as this was not part of an investigator's remit. The EAT found that no evidential material had been withheld, the substance of the investigation remained and the independence of the investigator was not jeopardised. More information can be found here.
10) Covert recordings can result in financial awards being reduced
In Phoenix House Ltd v Stockman, whilst the EAT did not regard the employee's covert recording of an HR meeting as a breach of the implied term of trust and confidence, due to the claimant recording one meeting which related to her own position and employment rather than trying to entrap or record confidential information, it agreed that the original decision to reduce compensation by 10% and nothing more, was appropriate in these circumstances. For more information see here.
11) Employer was not vicariously liable for a social media image posted outside of employment
The EAT has held that an employer was not vicariously liable for harassment under the Equality Act 2010 when an employee posted a racially offensive image on Facebook and shared it with a colleague (Forbes v LHR Airport Ltd). The employee in question had not been at work at the time and had not mentioned any colleagues or the employer in his Facebook post. The EAT concluded that the original decision that the posting of this image was not done "in the course of employment" was correct having regard to all the circumstances of this case. For further details on this case, please see our case report here.
12) Shared Parental Leave
The Court of Appeal confirmed that it is not discriminatory to pay men on shared parental leave less than an enhanced rate of maternity pay paid to women on maternity leave. The main issue in the two appeals (Capita v Ali and Hextall v Chief Constable of Leicestershire) was whether men on shared parental leave being paid less than birth mothers on ML would constitute unlawful sex discrimination.
Ultimately the decision of whether to offer enhanced SPL pay is personal to each business or organisation. The legal position is unlikely to be solely determinative for many, with cost and employee relations both being key considerations. However, this decision is obviously a welcome comfort for employers (subject to any appeal to the Supreme Court).
Both claimants are seeking leave to appeal to the Supreme Court so this may not be the final decision on this matter.
For a more in depth look at the two cases, please click here to read Shelley Morgan's (Senior Associate) summary.
13) Quadrupled financial penalties for employers
The April 2019 tax year brought about a number of changes. In particular, The Employment Rights (Miscellaneous Amendments) Regulations 2019 has been updated to increase the maximum level of penalty available for aggravated breach of a worker's employment rights has been increased from £5,000 to £20,000.
14) Agency Worker Rights
In Kocur v Angard Staffing Solutions Ltd and another, the Court of Appeal has upheld an employment tribunal's decision that the Agency Workers Regulations 2010 do not entitle agency workers to work the same number of contractual hours as a directly-recruited employee comparator.
The court reached its decision based on the purpose of the legislation as well as the language used and decided that there was nothing to suggest that the regulations were intended to regulate the amount of work that agency workers were entitled to.
The court was also mindful of the fact that to do otherwise in this case would be contrary to the purpose of using agency workers, namely to allow workforce flexibility.
15) Restrictive Covenants
In July this year, the Supreme Court in almost 100 years considered the law relating to the severance of wording within restrictive covenants in Tillman v Egon Zehnder Ltd  UKSC 32.
The court held that offending words could be removed in order to render the remainder of the clause enforceable provided that there would be no need to add to or modify the rest of the wording of the covenant and that this would not result in a major change in the effect of the restriction. As much as this decision was employer friendly, it would be ill-advised to regard this decision as allowing them to impose wide restrictions with the understanding that the courts will simply sever such unreasonable parts.