Employment law changes and cases coming up in 2020

If, as expected, the UK will leave the EU on 31 January 2020 EU law will continue to apply in the UK during the transition period which will end on 31 December 2020. In the meantime the new domestic Employment Bill contains proposed employment law reforms including:

• creating a new, single enforcement body, offering greater protections for workers
• ensuring that tips for workers go to them in full
• introducing a new right for all workers to request a more predictable contract
• extending redundancy protections to prevent pregnancy and maternity discrimination
• allowing parents to take extended leave for neonatal care; and introducing an entitlement to one weeks leave for unpaid carers
• the potential of making flexible working the default unless employers have good reason not to.

The Bill also contains a clause which would provide lower courts powers to overturn European Court of Justice rulings which had not previously been anticipated. In addition to these proposed changes, other legislation is coming into force this year.

Legislative changes coming into force on 6 April 2020

The right to a written statement of terms

This is a right for all workers (not just employees) to be given the right to a written statement of terms which must be provided on the first day of employment, rather than within the first two months. Additional information will be required including any terms and conditions relating to hours of work, any paid leave to which the worker is entitled, any probationary period and its conditions and duration and details of any other benefits provided by the employer that are not already included in the statement. Organisations will need to consider changes this will mean for their standard on-boarding documentation for both employees and workers.

Holiday pay calculations

The reference period for determining an average week's pay for the purposes of calculating holiday pay will increase from 12 weeks to 52 weeks, discarding any weeks that a worker did not earn pay. If the worker has been employed for less than 52 weeks, the reference period will be the number of complete weeks for which the worker has been employed. This new change will have implications where workers pay varies during weeks that they work.

Taxation of termination payments

All termination payments above the £30,000 tax free threshold will be subject to class 1A NICs (i.e. a rate of 13.8%). There are no transitional provisions. This means that the employer will be required to pay employer NICs above this threshold so will be an additional cost and should be factored in to settlement agreements with employees.

Extension of the off-payroll working rules for the private sector

The off-payroll working rules will be extended to large and medium-sized companies in the private sector to address non-compliance with IR35 in the private sector. Responsibility for determining if IR35 applies to independent contractors will shift to the organisation engaging the individual. Such a business engaging contractors via an intermediary, such as a personal service company, would need to carry out a determination of their tax status as to whether the contractor is deemed to be an off payroll worker for tax purposes. If this is the case the fee payer would have to account for the tax and National Insurance contributions.

On 7 January 2020 the Government launched an off-payroll review to determine if any further steps can be taken to ensure the smooth and successful implementation of the reforms.

The review will focus on the implementation of these reforms. The review, which will conclude by mid-February, will engage with affected individuals and businesses on their experiences of the implementation of these reforms.

HM Treasury has also recently published a new "Off-payroll working rules: Contractor Factsheet". It explains that, if the organisation for which a contractor provides services falls within the new rules, then it will determine the individual's employment status for tax purposes from 6 April 2020. The factsheet explains that the hirer will provide a ‘Status Determination Statement’, which will set out the determination the hirer has made and the reasons behind this. The individual may be asked to provide the hirer with some information to helpthem make their determination.

Agency Workers

The Government are implementing a recommendation from the Taylor Review and removing the "Swedish derogation" in the Agency Workers Regulations 2010. This currently exempts employment businesses from providing pay parity between agency workers and permanent employees where the agency workers are paid a minimum amount between assignments when they are not working for a hirer. This will mean that agency workers will have the right to the same pay as comparable permanent workers after 12 weeks.

Temporary work agencies will also need to provide a Key Information document to agency work seekers, including information on the type of contract, the minimum expected rate of pay, how they will be paid and by whom e.g. an intermediary or umbrella company, any leave entitlement and payment for leave.

Parental bereavement leave and pay

Legislation is expected to come into effect from April which will provide for parents and primary carers who have at least 26 weeks’ service with their employer to take 2 weeks’ paid leave (at the statutory rate) following a stillbirth after 24 weeks, or the death of a child up to the age of 18. Leave will be able to be taken in a two week block, or two blocks of one week, up to 56 weeks after the death. Bereaved parents with less than 26 weeks’ service are eligible to take bereavement leave as unpaid leave.

Information and consultation agreement

The threshold for employees to request an information and consultation agreement under the Information and Consultation of Employees Regulations will be lowered from 10% to 2% for employees, subject to a minimum of 15 employees.

National living and minimum wage

From April 2020, the new rates will be:

• For 25 and over £8.72 (currently £8.21)
• For 21 to 24-year-olds £8.20 (currently £7.70)
• For 18 to 20-year-olds £6.45 (currently £6.15)
• For under-18s £4.55 (currently £4.35)
• For apprentices £4.15 (currently £3.90)

Family leave pay and sick pay

The Department for Work and Pensions has set out proposed increases to various payments of statutory benefits.

From April 2020 it is expected that the weekly rate of :

• statutory sick pay (SSP) will be £95.85 (currently £94.25).
• statutory maternity pay (SMP) and maternity allowance will be £151.20 (currently £148.68).
• statutory paternity pay (SPP), statutory shared parental pay (ShPP) and statutory adoption pay (SAP) will be £151.20 (currently £148.68).

Upcoming cases in 2020

Employment status

The Supreme Court will hear an appeal in Uber BV and others in July 2020 on whether its drivers are workers. It will be interesting to see whether the Court agrees with the majority decision of the Court of Appeal that drivers are workers whenever they are logged onto the app and ready and able to work. The majority of the Court of Appeal was prepared to disregard the contractual documentation between Uber and the drivers (which characterised them as self-employed) as "artificial" but the dissenting judge felt this infringed too far on the commercial freedom of the parties.

If the drivers are workers, they will be entitled to the national minimum wage and will have rights under the Employment Rights Act 1996 and National Minimum Wage Act 1998. The case obviously has huge implications for businesses whose model is based on engaging workers through an online platform, and for the gig economy in general. The Supreme Court is likely to set out important observations on employment status generally.

Sleep-in workers

In February 2020 the Supreme Court will hear an appeal in Royal Mencap Society v Tomlinson-Blake, deciding whether employees who sleep at their employer's premises to carry out their duties are entitled to the national minimum wage when they are asleep or just, as the Court of Appeal held, when they are awake. The case has ramifications for the care sector and employers who engage "on-call" workers to sleep in. Currently the case law on when sleep-in workers are entitled to the national minimum wage is inconsistent so clarification from the Supreme Court will be extremely helpful.

Vicarious Liability

The Supreme Court is expected to give its judgment in early 2020 in Various claimants v Wm Morrisons Supermarket (heard in November 2019) on whether Morrisons is vicariously liable for the actions of a disgruntled employee who posted the details of 500 staff members publicly. If the Supreme Court agrees with the High Court and Court of Appeal that Morrisons is liable for the data leak, businesses will be particularly vulnerable to rogue employees who have access to employee data, with potential fines for data breach being so significant.

Shared parental leave and pay

A hearing date is awaited in the Supreme Court case of Ali v Capita Customer Management Ltd; Hextall v Chief Constable of Leicestershire Police, which will decide whether it is direct or indirect sex discrimination (or a breach of the equal pay sex equality clause) not to pay men enhanced shared parental pay. With the Court of Appeal having decided so robustly that it was not discriminatory, broadly on the basis that it was not appropriate to make comparisons with women on maternity leave being paid enhanced maternity pay, it will be interesting to see if there is a radical departure from the previous approach. If the Supreme Court departs from the Court of Appeal, employers will have to review shared parental pay policies where these are not enhanced.

Equal Pay

As yet, no hearing date has been set for the equal pay case of Asda v Brierley but in 2020 the Supreme Court is due to consider whether workers in depot stores are on comparable terms and conditions with workers in retail stores for equal pay purposes. The Court of Appeal held that they were, taking a broad approach to how the comparison should be viewed.

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