Employment Update - January 2021

COVID vaccine – what will it mean for employers?

The COVID vaccine is now being rolled out on a phased basis across the country, with millions expected to be vaccinated in the next few months. This extremely welcome development raises various questions which employers will likely need to consider in 2021. For example, are there any circumstances in which an employer could require all staff to be vaccinated? What if an employee is unwilling to return to work because a close colleague is refusing the vaccine? What should you do if an employee is spreading misinformation or intimidating or harassing colleagues due to their views on vaccination?

Many employers will want to encourage staff to have the vaccine once it becomes available. There is nothing preventing this – indeed, it would be a prudent step to take as part of the employer's duty to create a safe working environment.

Whether employers can require staff to be vaccinated is a more difficult question. Employers cannot force staff to have the vaccine against their will but could, for example, consider a policy which requires staff to be vaccinated in order to attend the workplace, with the threat of disciplinary action for those who refuse to do so. However, such a policy could expose the employer to unfair dismissal claims if employees with at least two years' service are dismissed as a result of their refusal. It could also expose the employer to discrimination claims from those who refuse to be vaccinated due to religious or philosophical beliefs or because of health concerns related to an underlying disability.

Any policy should therefore be based on a risk assessment which considers the nature of the work and the risks of infection to colleagues and clients, and also takes account of any guidance from the Government or Public Health England in this area.  Outside of the health and social care sectors, it would seem difficult to justify a policy of requiring staff to be vaccinated, but much will depend on future Government guidance on the issue. 

In contrast, employers will, in general, be justified in taking action against employees who spread misinformation or who intimidate or harass others due to their views on vaccination. Employers must strike a careful balance between allowing staff to express their views (particularly where these are based on religious or philosophical beliefs), and the need to counteract misinformation and stamp out intimidating or harassing behaviour. 

Furlough extension

The Coronavirus Job Retention Scheme (CJRS) will be extended to 30 April 2021, following a Government announcement in mid-December 2020. Under the CJRS, employers can put staff on furlough (full or partial paid leave) provided the employee receives at least 80% of their usual wages for any hours not worked, up to a cap of £2,500 per month (prorated for any hours worked). The Government has also confirmed that it will continue to fund the 80% of wages up to the cap until the CJRS closes on 30 April 2021. Employers will continue to have to pay the employer NICs and pension contributions on the Government subsidy plus normal pay for any hours worked during furlough.

The CJRS had been due to close on 31 March 2021 and was also due to be reviewed in January 2021, with a suggestion of a tapering in Government support. However, the Government's announcement means employers have certainty that the scheme will continue until April 2021 without the Government subsidy reducing.

In the light of the closure of schools and childcare facilities, the Government has also updated its CJRS guidance to make it clear that employees are eligible for furlough if they are unable to work (or are working reduced hours) as a result of caring responsibilities arising from COVID-19, including caring for children who are at home because of school or childcare closures or caring for a vulnerable individual in the household.

It has also been confirmed that, from February 2021, HMRC will publish details of all employers who claim under the CJRS for periods starting on or after 1 December 2020. The information published will include the employer's name and (for companies and LLPs) company number, along with an indication of the value of the claim within a banded range.

For further information on the CJRS, please see our Q&A briefing note.

Ethnicity pay gap reporting

In December 2020, the BBC reported that black workers at Lloyds Bank earn a fifth less than other colleagues. According to the bank, the discrepancy is because they "are disproportionately under-represented at senior levels".  The bank has pledged to take action and intends to do so by increasing the number of black staff members in senior roles to at least 3% by 2025.

Lloyds Bank's disclosure of its ethnicity pay gap was voluntary, but the Government is proposing to introduce a mandatory requirement for large companies to report on their ethnicity pay gap figures. The Government is still analysing feedback from last year's consultation and a response is expected imminently.

We have been working with clients to analyse their pay gaps and to help them implement measures to improve equality in the workplace. Please get in touch with the team if you would like to discuss further.

Travel quarantine rules

Employees who travel abroad for any reason, including for work or business, must self-isolate on their return to the UK, unless they have visited an exempt country or region. On 14 December 2020, the mandatory self-isolation period reduced from 14 days to 10 days. On 15 December 2020, the 'test to release' scheme was also introduced to allow individuals to opt for a private COVID-19 test (from a designated provider) five days after arriving in the UK and to end self-isolation as soon as a negative result is received.

The Government has also introduced limited exemptions to the self-isolation rules for work and business travel. The exemptions are narrowly defined and include:

• an exemption for cross-border workers who can evidence regular weekly travel to the UK; and
  
  
• an exemption for high value senior executives, who are permitted to leave self-isolation temporarily in order to undertake specific activities which are ‘more likely than not to deliver significant economic benefit to the UK’ and which cannot be done remotely.
  
  

End of Brexit transition period

Following the end of the Brexit transition period on 31 December 2020, the following key changes with effect from 1 January 2021 should be noted by employers:

• Employers must hold an immigration sponsor licence if they wish to sponsor the visas of EU employees who arrive in the UK to work from January 2021 onwards. They can be sponsored under the Skilled Worker visa route which replaced the Tier 2 (General) route or the Intra Company Transfer (“ICT”) route which replaced the Tier 2 (ICT) route (for short-term secondments from linked overseas offices).
  
  
• Short business trips between the UK and the EU for specified business activities can be undertaken on a visa-free basis (e.g. to attend meetings or conferences, receive training in work practices, or engage in commercial transactions). Productive work or providing services locally will generally be prohibited without a work permit which will be subject to local requirements in the UK or EU country.
  
  
• UK passport holders will need valid passports issued within the last 10 years with at least six months left to run when entering the EU for work or leisure. Border controls will also mean UK passport holders must be prepared to confirm the purpose and duration of their trip, their accommodation plans and the funds available.
  
  
• Time spent by UK nationals in the Schengen area (i.e. the EU27 countries excluding Bulgaria, Croatia, Cyprus, Ireland and Romania, plus Iceland, Norway, Switzerland and Liechtenstein), will be subject to a strict limit of no more than 90 days in each rolling 180-day period.

EU employees already working in the UK by 31 December 2020 will have until 30 June 2021 to apply for status under the EU Settlement Scheme in order to continue living and working in the UK legally beyond 30 June 2021.

Agency workers – what rights do they have?

Under the Agency Workers Regulations (AWR), agency workers have the right to be informed of relevant vacancies in the organisation hiring their services (the "hirer"). After 12 weeks with the hirer, they also have the right to the same basic working and employment conditions as they would have got had they been employed directly by the hirer (rather than engaged through an agency). A recent case demonstrates the limits on these rights.

The agency workers in this case were employed by an agency that supplied workers exclusively to Royal Mail. The workers claimed a breach of the AWR when they were told they could not apply for vacancies advertised internally on a Royal Mail noticeboard. They also claimed breaches of the AWR because:

• they were required to work 12 minutes longer each day than comparable Royal Mail employees;
  
  
• they had to work at times when Royal Mail employees were attending 30-minute training sessions;
  
  
• Royal Mail employees were given first refusal over any available overtime before it was offered to agency workers;
  
  
• they were not told in advance when their breaks would be, whereas breaks were specified in advance for Royal Mail employees;
  
  
• they received a pay increase six months after Royal Mail employees (although the increase was backdated); and
  
  
• they received less detailed pay slips than Royal Mail employees.

The Employment Appeal Tribunal (EAT) ruled that there was no breach of the right to be informed of vacancies, even though the agency workers were told they could not apply for them. The agency workers received the same information about the vacancies as employees (via a noticeboard) and the right to be informed of vacancies did not carry with it a right to be considered, or to even apply, for those vacancies.

The EAT also ruled there had been no breach of the AWR by offering agency workers longer shifts than employees. It would not be workable to require agency workers to be given shifts of the same length as employees, as the purpose of using agency workers is often the flexibility they offer. Similarly, there was no breach of the AWR by requiring agency workers to work during time when employees were receiving training, as there is no requirement that the work given to agency workers is the same as that given to employees.

The EAT also ruled that it was lawful to give employees first refusal over overtime before offering it to agency workers, and it was not a breach of the AWR that agency workers were not told in advance when their breaks were (even though this was specified for employees). Finally, in terms of pay, while there was no issue with agency workers receiving less detailed payslips than employees, there was an issue with the agency workers receiving a pay rise some six months later than comparable employees, even though the pay rise was backdated. The right to the same basic working conditions covered the timing of payment as well as the amount of pay.

Gender fluidity discrimination

The employee in this case had worked as an engineer for the employer for many years. Having previously identified as male, from 2017 onwards, the employee identified as gender fluid and non-binary, and generally dressed in female clothing. The employee was subjected to insults and abusive jokes at work and found management unsupportive. The employee brought claims of harassment and discrimination on grounds of gender reassignment.

The Equality Act 2010 protects individuals who have undergone, are undergoing or are proposing to undergo gender reassignment. The employer argued that this does not include someone who is gender fluid or non-binary. However, the Employment Tribunal disagreed. It said that gender reassignment discrimination laws do cover gender fluidity and non-binary gender. Further it concluded that the employee had been harassed and discriminated against because of gender reassignment. The Tribunal expressed their surprise that there was no proper support, training or enforcement on diversity matters until the employee raised their concerns and, although the employer had a good equal opportunities policy, none of the employer's witnesses had ever seen it.

National Minimum Wage

The Government has announced the rates of the National Minimum Wage and the National Living Wage that will apply from April 2021. Significantly, the National Living Wage, which currently applies to workers aged 25 or over, will be extended to workers aged 23 or over for the first time.

The new rates from April 2021 will be:

• £8.91 per hour for workers aged 23 or over (increasing from the current National Living Wage of £8.72 per hour for workers aged 25 and over)
  
  
• £8.36 per hour for workers aged 21 to 22 (increasing from £8.20 per hour)
  
  
• £6.56 per hour for workers aged 18 to 20 (increasing from £6.45 per hour)
  
  
• £4.62 per hour for workers aged 16 to 17 (increasing from £4.55 per hour)

The apprenticeship rate, which is for apprentices under 19 years or in the first year of their apprenticeship, will also increase from £4.15 to £4.30 per hour.

Statutory sick pay

The Department for Work and Pensions (DWP) has published its proposed increase to the rate of statutory sick pay, which is to apply from April 2021. It is proposed that statutory sick pay would increase from £95.85 to £96.35 per week. The increase now needs to be confirmed by an Order, which is yet to be made. 

Statutory pay for family leave

The DWP has also proposed the increased rate for the lower rate of statutory maternity pay and the rate of statutory paternity, adoption and shared parental pay. It is proposed that the rate would increase from £151.20 to £151.97 per week from April 2021. The increase must also be confirmed by an Order, which is yet to be made. 

Off payroll rules

On 6 April 2021, changes to the tax rules for those who engage consultants and contractors via personal service companies will come into force. The so-called "off payroll rules" were introduced in the public sector in April 2017 and are being extended to the private sector from April 2021.

These rules are designed to ensure that workers who provide their services like employees are taxed like employees, even if they provide their services through a personal service company. From 6 April 2021, large and medium-sized businesses in the private sector will be caught by the rules. Such businesses will have to decide whether without the personal service company the worker would be regarded as an employee for tax purposes. If so, if the business (or the body responsible for paying the personal service company) must account for tax and national insurance contributions on payments to the personal services company.

Those in scope should therefore review their arrangements for engaging consultants, contractors and other workers, and implement systems and processes to ensure compliance with the new rules ahead of 6 April 2021. We have been working with a number of employers on such projects and have produced a 'toolkit' of template documents to assist with this. Please speak to your usual Employment team contact for more information. You can also view our webinar on the practical aspects of implementing the off-payroll rules here.

Banning non-competes?

Are non-compete covenants on their way out in the UK? The Government has published a consultation paper proposing major reforms of post termination non-compete clauses.

There are two options under consideration. Under option 1, employers would have to pay employees throughout any non-compete period (between 60 and 100% of pay), as is already the case in some other European countries, including France, Germany and Italy. Option 2 would prevent employers from using non-compete clauses altogether, with the inspiration being California.

The reforms are proposed to help create an environment where start-ups will flourish (hence California being the model) but would have wide-ranging implications for employers of all sizes and across all sectors. We will be responding to the consultation and will be seeking views from our clients and contacts in due course. If you have any views you would like us to include in the response, please get in touch with your usual Employment team contact.

Extending the ban on exclusivity clauses

In 2015, the Government introduced a ban on exclusivity clauses in zero hours contracts. An exclusivity clause is any contract provision which seeks to prevent the worker from working for another employer (or from doing so without consent). The Government is now consulting on whether to extend this ban beyond zero hours workers to cover all workers whose guaranteed income is below the Lower Earnings Limit, currently £120 a week. This would prevent employers from restricting lower earners from working for another employer and is being proposed because lower earners have been particularly adversely affected by the COVID-19 pandemic. The Government's consultation runs until 26 February 2021.

Since the last Employment Update, our work has included:

• advising on collective consultation regarding changes to terms and conditions, alongside statutory pension consultation obligations, in relation to changes to a final salary pension scheme
  
  
• successfully defending a constructive dismissal claim at a virtual Employment Tribunal hearing
  
  
• preparing to defend a claim by a contractor in the civil courts
  
  
• advising on the establishment of an employee consultative body
  
  
• advising a global business on the employment implications of allowing its staff to relocate temporarily to different jurisdictions during the COVID-19 pandemic
  
  
• advising clients on the impact of the latest Government lockdown and their ability to continue operating
  
  
• defending a number of claims involving allegations of pregnancy and maternity discrimination