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

News:

• ACAS has updated its guidance on the testing of employees
• Immigration changes in the spring budget
• Other budget announcements
• All businesses can now order the lateral flow tests
• The statutory tribunal financial limits have been increased
• Unemployment in BAME has risen since 2019
• Female Financial Directors are being paid less than their male counterparts
• Restriction of Public Sector Exit Payments
• Employment Rights Act will extend protection to workers
• The Statement of Changes to Immigration Rules
• HMRC changes to the off-payroll working rules guidance
• Updated employer's guide to right to work checks
• Employee payment records should now be retained for 6 years

Commentary on recent employment law tribunal cases:

• Multiple transferees applies to service provision changes in TUPE
• Removal of Christian Director for speaking publicly was not discriminatory
• Do standby periods count as working time?
• No right to payment where annual leave has been taken unpaid

News

ACAS has updated its guidance on the testing of employees

ACAS has updated its “working safely” guidance with information for employers on broaching the testing of employees in the workplace, discussing how to implement this and best practice. The page is entitled, “Testing staff for Coronavirus” and contains information on how the employees would be tested, when they would get their test results, and what happens if they test positive. There is also a page dealing with “Getting the coronavirus vaccine for work” which covers how best to support staff in getting the vaccine, and consideration of offering paid time off to be inoculated, and paying full pay rather than SSP if staff are off sick with side effects. Interestingly, the guidance has removed reference to three previously included points: forcing staff to be vaccinated; only making it mandatory if it is necessary for someone to do their job; and if the employer believes an unreasonable refusal to have the vaccine could be a disciplinary offence. These have presumably been removed because ACAS realised that these are complex areas.

Immigration changes in the Spring Budget

The spring budget contained a number of announcements regarding changes to immigration to update the system and do more to attract global talent. These include:

• the introduction of an elite points-based visa by March 2022, within which there will be a "scale-up" stream, enabling those with a job offer from a recognised UK scale-up to qualify for a fast-track visa
• reforming the Global Talent visa, including automatic qualification for holders of international prizes and winners of scholarships and programmes for early promise
• reviewing the Innovator visa to make it easier for those who have the skills and experience to start an innovative business to obtain a visa
• launch of the new Global Business Mobility visa by spring 2022 for overseas businesses to establish a presence or transfer staff to the UK
• provision of practical support to small firms that are using the visa system for the first time
• modernisation of the immigration sponsorship system to make it easier to use via the publication of a delivery roadmap in the summer
• establishing a global outreach strategy by expanding the Global Entrepreneur Programme, marketing the UK's visa offering and exploring building an overseas talent network.

Other budget announcements were:

• the extension of the CJRS to September with the government paying 80% of salary and employers contributing 10% in July and 20% in August for furloughed employees
• the self-employed income support scheme (SEISS) is being extended, with a grant to cover February to April 2021, and a further one to cover May to September 2021
• the temporary continuation of tax exemptions to cover Covid 19 tests and home office expenses, and SSP Rebate scheme while the sickness levels remain high.

All businesses can now order the lateral flow tests

Still on the Covid front, the Department of Health and Social Care has announced that all businesses of whatever size can now register to order lateral flow tests for their staff. Previously the business had to have at least 50 staff to qualify. This limit has now been removed.

With effect from 6 April 2021, the statutory tribunal financial limits have been increased as follows:

• the cap on a week's pay increases from £538 to £544
• the maximum compensatory award for unfair dismissal increases from £88,519 to £89,493 where the effective date of termination is on or after 6 April 2021
• the minimum basic award for certain unfair dismissals (including health and safety dismissals) increases from £6,562 to £6,634.

Unemployment in BAME has risen since 2019

The TUC has analysed data produced by the Office of National Statistics which shows that the level of unemployment in B&ME has risen from 5.8% in the last quarter of 2019, to 9.5% in 2020, almost double that of unemployment in the white population for the same period. They claim that this is a “mirror to the structural racism” currently evident in Britain. One charity placed the blame largely on the pandemic.

Female Financial Directors are being paid less than their male counterparts

Research conducted by a law firm has revealed that female financial services directors are paid 66% less than their male counterparts. Women directors working in the UK's biggest financial services firms earn an average yearly wage of £247,100, compared to the £722,300 earned by male directors. It is suggested that this significant gender pay gap indicates the lack of opportunities for women seeking higher paid executive roles at FTSE 100 and 250 firms. The data indicates that 86% of the female company directors accounted for were in non-executive roles which receive lower pay and encompass fewer daily responsibilities.

Restriction of Public Sector Exit Payments

On 19 March 2021, the Restriction of Public Sector Exit Payments (Revocation) Regulations 2021 came into force, revoking the Cap Regulations from that date. The Revocation Regulations provide that anyone who received an exit payment from a relevant public sector body between 4 November 2020 and 19 March 2021 which was capped as the result of the Cap Regulations will be entitled to receive an additional payment from that public sector body. The additional payment will be the difference between the amount of the payment originally made and the amount that would have been payable had the Cap Regulations not applied, including interest.

Employment Rights Act will extend protection to workers

The High Court ruling in the case of R (on the application of the Independent Workers’ Union of Great Britain) v Secretary of State for Work and Pensions and anor, held that restricting the protection from health and safety detriment in circumstances of danger which they believe to be serious and imminent, to employees only was in contravention of the EU Health and Safety Directive in not covering workers. Following this decision, the government has made provision to amend section 44 of the Employment Rights Act to extend this protection to workers. It is expected to come into force on 31 May 2021.

The Statement of Changes to the Immigration Rules have mostly come into force effective from 6 April 2021. The Statement includes:

• revisions to the UK's shortage occupation list, including 8 new occupations in the health and care sectors
• a new minimum hourly rate to the Skilled Worker category
• formalising the introduction of the new Graduate route which opens on 1 July 2021, allowing international students to stay in the UK and work, or look for work, at any skill level for up to two years after they successfully complete a course at a UK higher education provider (three years for doctorate holders).

HMRC has published changes to its off-payroll working rules guidance. Key changes include confirmation that:

• if a worker has no interest in a company, the company will not be a relevant intermediary. It was previously unclear whether a self-employed worker operating through a corporate agency in which they had no interest would fall within the rules
• either a worker or their intermediary can confirm whether the intermediary falls within the rules
• a client's status determination statement (SDS) can be provided through an online portal and expanded guidance on when a new SDS should be provided (dealing with contract extensions and changes to terms, conditions and working practices)
• clients retain their obligations even if they subcontract the tasks of determining the worker's status or producing the SDS.

The revised guidance also provides information on correcting payroll inaccuracies and confirms that:

• deemed employers cannot recover employer NICs from the amounts treated as employment income
• clients can stand by their SDS if disputes are instigated without any reasons or new information
• the consequences of a party unwittingly and in good faith passing on fraudulent information.

The Home Office has updated an employers' guide to right to work checks

The update will provide further guidance on right to work checks for EU citizens starting work in the UK between 1 January and 30 June 2021 (known as the “grace period”). Key points are the following:

• employers can continue to rely on checking an EEA or Swiss national's EU passport or national identity card to evidence their right to work in the UK up until 30 June 2021. They are not expected to differentiate between EU citizens who arrived in the UK before 11.00 pm on 31 December 2020 and those who arrived from 1 January 2021
• there will not be a mandatory requirement for employers to undertake retrospective checks on EU citizens employed before 30 June 2021
• provided a right to work check is undertaken in line with right to work legislation and guidance, and the employer does not know or have reasonable cause to believe the employee has no right to work, the employer will maintain a continuous statutory excuse against a civil penalty if the employee is subsequently found to be working illegally
• employers can invite those who already have status under the EU Settlement Scheme, or status under the points-based immigration system, to evidence their right to work using the Home Office online service. However, they cannot insist on this, or discriminate against those who wish to use their passport or national identity card during the grace period
• however, from 1 July 2021, all EU citizens (other than Irish nationals) will have demonstrate their right to work through evidence of their immigration status, rather than their nationality, via the online service.

Employee payment records should now be retained for 6 years

As well as the National minimum wage limits increasing from 1 April 2021, what has also increased is the period required for records to be kept to demonstrate the employer’s compliance with national minimum wage legislation. This has increased from 3 years to 6 years.

Commentary

Multiple transferees applies to service provision changes in TUPE

In a case which can probably only serve to cause confusion in respect of re-tendering and TUPE transfers, the EAT, in McTear Contracts Ltd v Bennett and ors, has ruled that the principle of employees transferring to more than one transferee in a business transfer, can also apply to service provision changes.

The case concerned a single contractor, AS Ltd, which undertook the work of replacing kitchens for North Lanarkshire Council. A group of AS Ltd’s employees worked exclusively on this contract, latterly in two teams which worked independently of each other. The Council retendered for the work and split it along geographical lines into two separate contracts. These contracts were awarded to two new contractors, MC Ltd and MPS Ltd. The companies took on some, but not all, of AS Ltd’s employees and some of those who were not taken on lodged tribunal claims.

At a preliminary hearing, the tribunal decided that there was a service provision change, and then proceeded to allocate employees to the two transferees in accordance with the teams in which they had been placed whilst with AS Ltd. Both respondents appealed to the EAT on the grounds that the tribunal had been wrong in its allocation of employees; and crucially it had not considered the possibility that some of the employees had not transferred to either entity.

Unfortunately for the respondents, in between the tribunal preliminary hearing and the EAT hearing, the CJEU had handed down a judgment which held that, where there is a transfer to multiple transferees under the Acquired Rights Directive (from which, of course, TUPE emanates), a full-time contract of employment can transfer to be split between the transferees into a number of part-time contracts. Although this applied to business transfers under the Directive, the EAT considered that it would be unconscionable for it not also to apply to service provision changes which are a domestic provision under TUPE. The reason for this was that it felt it would not be appropriate for the application or otherwise of TUPE protection to depend on the type of transfer.

The EAT found that the tribunal had, correctly at the time, relied on a previous case which established that employees could only transfer to one or other of multiple transferees, for whoever of which they undertook the greatest amount of work. However since then this judgment from the CJEU had been handed down and the EAT took the view that it should also apply to service provision changes.

The EAT noted that there is no reason in principle why an employee may not, following such a transfer, hold two or more contracts of employment with different employers concurrently, as long as the work attributable to each contract is clearly separate to, and identifiable from, the work on the other.

Removal of Christian Director for speaking publicly was not discriminatory

Mr Page was a non-executive director of a NHS Trust Development Authority. He was also a magistrate. He was a Christian. He brought two claims, one against the NHS Trust Development Authority, and the other against the Lord Chancellor. The first of the cases arose after he had spoken publicly regarding his views on homosexuality and same-sex marriage, to both of which he was opposed, and his non-executive directorship term was not renewed. He brought claims of direct and indirect discrimination on the grounds of religion or belief which ended up in the Court of Appeal as Page v NHS Trust Development Authority.

The Court of Appeal upheld the employment tribunal decision that his rights under article 9 of the European Convention on Human Rights, freedom of religion, was not engaged but, even if it had been, the restriction on Mr Page would have been justified as being necessary and proportionate in the circumstances. He had not been dismissed because of his views, but because he repeatedly spoke out in public to the media having been requested on a number of occasions not to do so without seeking permission, which he had failed to do. As such his direct and indirect discrimination claims failed, as did a claim for victimisation, because the protected acts upon which he relied were not the cause of the detrimental treatment of his term not being renewed.

With regard to his claim against the Lord Chancellor, he claimed that he had been removed as a magistrate because he had complained about discrimination on the grounds of religion and belief in earlier disciplinary proceedings. This was not, however, found to be the reason for his removal. He had been removed because he had stated publicly that he would deal with adoption of children by same-sex couples, not on the grounds of law and evidence, but on his own personal beliefs, which were against same-sex couples. As such his removal was found to be lawful under the Equality Act, and there was no breach of his Article 10 right to freedom of expression under the European Convention on Human Rights. His application to appeal to the Supreme Court was refused.

Do standby periods count as working time?

Following the recent Supreme Court decision in the case colloquially known as the Mencap case, the ECJ has given a decision regarding whether or not standby periods count as working time. What is particularly pertinent about this case is that, since judgment was given after the UK left the EU, it is no longer applicable in the UK although courts can have regard to it as needed.

There were two cases involved, one from Switzerland and one from Germany. DJ v Radiotelevizija Slovenija was a specialist technician working in transmission centres who was sometimes required to stay in the vicinity of the sites due to the specialist nature of the work, and the distance and the requirement for him to be in the vicinity on standby. When he had to stay over, the employer provided accommodation which he could use but was not required to. He had to remain in the vicinity whilst on standby but be available to attend a site within1 hour. In RJ v Stadt Offenbach am Main, RJ was a fireman who, during standby, had to be contactable at any time, with his service uniform and vehicle readily to hand. He had to be available to respond to calls, decide what action to take, and to get to the town boundary vicinity within 20 minutes.

In both cases, the ECJ held that a period of standby time must be classified as ‘working time’, even if the worker is not required to remain at his or her workplace, if the constraints imposed are such as to ‘objectively and very significantly’ affect the worker’s ability freely to manage the time during which his or her professional services are not required and to pursue his or her own interests.

No right to payment where annual leave has been taken unpaid

The EAT, in Smith v Pimlico Plumbers Ltd, has ruled on whether or not worker or employee who has taken as unpaid, annual leave, can subsequently claim the right to be paid for it from a previous leave year (in other words, claiming carried over unpaid leave already taken). The claimant had brought claims in the employment tribunal for accrued untaken holiday when his contract was terminated. The issue of his status to even bring such claims went all the way up to the Supreme Court which decided that he was a worker for the purposes of the Employment Rights Act.

The next issue was whether or not he was entitled to be paid for annual leave which he had taken in previous leave years, but for which he had not been paid, and for which he knew that he would not be paid at the time he took the leave.

The EAT held that the case of King v Sash Window Workshop Ltd was a case which expressly entitled someone to be paid for carried over holiday, unlimited in time, which they had been deterred from taking because they would not be paid for it. This was in contrast to the current case where Mr Smith had, in the full knowledge that he would not be paid for it, taken holiday over a period of several years. As such, the EAT held that, as the lack of payment had been no deterrent to him taking the holiday, and the purpose of holiday is rest and relaxation, he could not then claim payment for that holiday which he had previously taken but for which he had not been paid, and his claim was limited only to annual leave taken in the current leave year.

In the event, the holiday pay claim was deemed to be out of time but the principle is an interesting one for assessing accrued annual leave claims which are increasingly likely to be hitting the employment tribunals, given the decisions recently regarding gig economy workers.