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Budget 2020 – Extraordinary Measures and the Coronavirus

Downing Street & Whitehall

In the Budget address on 11 March, Rishi Sunak, Chancellor of the Exchequer, announced £7 billion of extraordinary measures to support the economy through the coronavirus (COVID-19) crisis.

The following key measures were announced:

  • The cost of statutory sick pay (SSP) for coronavirus-related absence of up to 14 days will be refunded by the government. This applies to businesses with fewer than 250 employees.
  • SSP will be available “to all those advised to self-isolate even if they haven’t yet presented with symptoms”. This will apply from day one of sickness.
  • Employees will be able to obtain a sick note (fit note) from the NHS non-emergency service (111), which they can use as evidence for absence from work. This initiative is intended to take pressure off local GPs.

The self-employed and those working in the gig economy are not eligible for SSP and so the government has made it quicker and easier to access benefits.

Additional financial support is being made available under a new temporary Coronavirus Business Interruption Loan Scheme with banks offering loans of up to £1.2m to support SMEs.

A special HMRC helpline has also been set up to assist businesses and self-employed individuals in financial difficulties with and outstanding tax liabilities. Those concerned about their ability to pay tax due to the coronavirus can contact HMRC’s helpline on 0800 0159 559.

Preparing Your Business for the Coronavirus

Nurse with Blood Sample

The current strain of coronavirus, known as 2019-nCoV, is part of the same family of viruses that includes the common cold and SARS (Severe Acute Respiratory Syndrome). There are now three confirmed cases of the coronavirus in the UK and the outbreak has spread across China and to at least 18 countries globally.

If the new strain of coronavirus follows the same pattern as the SARS outbreak in 2003, it may be that the impact on the UK is quite limited. Coronavirus is not, however, an issue that employers can just ignore. At present, the risk level is assessed as being low to moderate, but the situation is evolving all the time. Providing a safe and healthy workplace for employees is a legal requirement and employers should consider the following:

  • In general terms, the government advice is for people who may be infected by the coronavirus to take simple, common-sense steps to avoid close contact with other people as much as possible, much as they would with other flu viruses.
  • If any employees are required to travel to China, employers should be sure to follow up-to-date government advice (see advice from the Foreign and Commonwealth Office). Consideration should be given to cancelling visits to affected areas and assessing whether any meetings could be done via electronic means such as Skype or other online video meetings instead.
  • Business continuity plans should be reviewed.
  • Where employees have recently returned from China, consider allowing them to work from home until it is certain that they are not infected.
  • Good hygiene standards should be enforced across businesses with clear hand-washing instructions displayed in kitchens and bathrooms.
  • In the event that coronavirus spreads rapidly in the UK, employers will have to review sickness absence policies and add instructions to follow if employees believe they may have been exposed to the virus.

Advice on infection prevention and control for healthcare providers, including care homes, can be found here on the GOV.UK website.

Updated on 6 February 2020 with new number of confirmed cases in the UK.

Ethical Veganism is a Protected Characteristic

Employment in Focus

Earlier this month, an employment tribunal ruled that ethical veganism is a non-religious philosophical belief that should be protected under the Equality Act 2010. For a belief to be protected under the Act, it must meet several tests including being worthy of respect in a democratic society, being compatible with human dignity, and not conflicting with the rights of others.

The case concerned a charity worker, Jordi Casamitjana, who claimed he was unfairly dismissed because of his philosophical belief in ethical veganism. An ethical vegan is defined as someone who not only follows a vegan diet but also opposes the use of animals for other purposes. Casamitjana is taking his former employer, the League Against Cruel Sports, to an employment tribunal following his dismissal.

Having established that veganism is a philosophical belief, the case will now be taken to a second, full hearing to establish the reasons for Casamitjana’s dismissal. Casamitjana says he was dismissed by the League Against Cruel Sports after raising concerns that its pension fund was being invested in companies involved in animal testing, whereas the charity maintains he was sacked for gross misconduct.

As this is a first instance decision and may yet be appealed, it is not enough to have a binding effect on other tribunals and each subsequent case will depend on its own facts. However, in light of this ruling, employers may wish to review how they support ethical vegans in their business and consider if any changes are required.

Employment Tribunal: Vegetarianism is Not a Philosophical Belief

Image - Waiter Serving Food

A recent employment tribunal, in Conisbee v Crossley Farms Ltd and others, has found that vegetarianism is not a “philosophical belief” under the Equality Act 2010. Interestingly, however, the tribunal suggested that veganism is more likely to be protected under the Act.

Mr Conisbee, who is vegetarian, resigned from his position as a hotel waiter after he was shouted at in front of customers for wearing an un-ironed shirt. Mr Conisbee could not bring a claim for constructive unfair dismissal as he had not worked for his employer, Crossley Farms Ltd, for long enough, but instead claimed that his employer had discriminated against him for being vegetarian. He brought an employment tribunal claim for religion or belief discrimination under the Equality Act.

In support of his claim, Mr Conisbee claimed that he had been bullied by colleagues who gave him snacks and later told him they contained meat, such as a croissant that had been basted in duck fat and pistachio sponge pudding that contained gelatine powder.

As a vegetarian, Mr Conisbee claimed that he should have the same rights as employees who suffer discrimination over their religious beliefs or sexual orientation, which are characteristics protected by the Equality Act.

Mr Conisbee’s argument was that many vegetarians feel that: “it is wrong and immoral to eat animals and subject them and the environment to cruelty and perils of farming and slaughter”. He said that, for many vegetarians, this is not a mere “opinion or viewpoint”, but is a “serious belief integral to [their] way of life”. Mr Conisbee cited a Wikipedia article from 2010 stating that 21.8% of the world’s population are vegetarians. He argued that vegetarianism has attained a high level of cogency, seriousness, and importance, and is certainly worthy of respect in a democratic society.

In response, Crossley Farms claimed that Mr Conisbee’s belief is simply an “opinion or viewpoint” that is not capable of protection under the Equality Act.

Mr Conisbee’s claim was rejected by the tribunal who decided that vegetarianism was a “lifestyle choice” but not a “philosophical belief” capable of protection under the Equality Act 2010.

The employment tribunal did, however, suggest that veganism may qualify for the legal protection as there was “a clear cogency and cohesion in vegan belief”, as vegans all shun meat, fish, and dairy products because they believe it is “contrary to a civilised society and against climate control”.

New Laws on Non-Disclosure Agreements – What Will They Mean for You?

NDAs in Employment

Non-Disclosure Agreements or ‘NDAs’ have become something of a touchy subject in recent years owing to their increasingly frequent appearances in high-profile cover-ups and abuse scandals. In particular, NDAs are said to be widely used to cover up allegations of unlawful discrimination and sexual harassment in the workplace and have featured in a number of major news stories, not least those involving figures such as Sir Philip Green and Harvey Weinstein.

Settlement agreements also feature significantly in this area and are used to resolve workplace disputes without recourse to an Employment Tribunal. Settlement agreements can cover matters other than harassment and discrimination and may even be used in cases where an employee leaves without any trouble. They can also be used to impose obligations of confidentiality on both parties to a dispute, meaning that neither party can discuss the circumstances leading up to the agreement. Despite their obvious use as a legitimate tool for dispute resolution and for the protection of employers and employees alike, however, such agreements also fall prey to misuse.

In light of such issues, last month, Business Minister, Kelly Tohurst, announced plans for new legislation designed to stop NDAs from being misused in this way. The proposed reforms would:

  • Require employers to clearly explain the limitations of confidentiality clauses in plain English, within settlement agreements and written statements from employees. This should ensure that individuals properly understand what they are signing and what their rights are.
  • Build on existing legislation so that individuals signing NDAs get independent legal advice on the limitations of confidentiality clauses. This would include making it clear that information can still be disclosed to the police, legal professionals, and other regulated health and care professionals (e.g. doctors and social workers), irrespective of the NDA.
  • Introduce new enforcement measures to deal with confidentiality clauses that do not comply with the law, such as voiding those not following the new legislative requirements.

Critics of the proposals have said that they do not go far enough. Employees entering into NDAs would not be permitted to disclose matters covered by the NDA to their friends and relatives, and detail relating to permitted disclosure to regulations such as the Financial Conduct Authority also appears to be lacking.

Implications for Employers

For many businesses, this should not make a significant amount of difference. When announcing the proposals in July 2019, Ms Tolhurst stated that:

“The vast majority of businesses comply with the law and use NDAs legitimately – from protecting commercially sensitive information to preventing information being shared with competitors.”

“We will not tolerate the use of NDAs to silence and intimidate victims from speaking out. The new legislation will stamp out misuse, tackle unacceptable workplace cultures, protect individuals, and create a level playing field for businesses that comply with the law.”

At present NDAs and confidentiality clauses are barred from preventing individuals from reporting wrongdoing in the public interest (also known as ‘whistleblowing’). Such disclosures could include a criminal offence, danger to health and safety, or failing to comply with legal obligations. NDAs and confidentiality clauses are also unable to prevent individuals from taking matters to an employment tribunal.

In the realm of employment, written confidentiality clauses are a common (and, indeed, perfectly normal and acceptable) feature in employment contracts. Not only that, but some employees actively prefer NDAs in the form of settlement agreements as, when used properly, they can alleviate the stresses of an acrimonious departure, legal action, and tribunals. Moreover, the courts have established that all employment contracts contain an implicit expectation of confidentiality with respect to information which has a necessary quality of confidence. This cannot, however, be used to cover up immoral or grossly unfair conduct.

The proposed reforms will not, therefore, have a negative impact on those businesses using NDAs and confidentiality clauses properly, and they will continue to have an important and valid role to play. It is nevertheless good practice to ensure that your documentation complies ahead of time, making sure that the boundaries of such provisions are clearly defined and clearly explained, and making sure that you do not attempt to prevent individuals from making disclosures that should be permissible.

What About Commercially Sensitive Information?

Not all NDAs are created equal. Indeed, many have very little to do with terms of employment. With so much talk in the media of new laws to clamp down on NDAs, however, it is easy to become concerned that all NDAs are being targeted.

It is important to understand that the proposed reforms are specifically targeted at those NDAs and confidentiality provisions that seek to supress evidence of wrongdoing in the workplace. NDAs which are rightfully used to protect commercially valuable information, for example, when sharing confidential information with another business for limited purposes in a joint project, should not be affected.

As is often the case in such matters, if you are using NDAs as the law and good practice dictate, there is no reason to believe that business will not simply continue as usual.

When Will the Reforms Take Effect?

At present, there is no parliamentary timetable for the new law, but we will update you as and when more precise information becomes available. In the meantime, your comments are, as ever, welcome.

Do you use NDAs in your business? Do you include confidentiality provisions in employment contracts? How do you limit the scope of such provisions to balance the fair and lawful treatment of your employees with the protection of your commercially sensitive information?

Court of Appeal Ruling on Enhanced Maternity Pay and Shared Parental Leave

New Parents and Baby

In May of this year, the Court of Appeal delivered an important decision for employers who enhance maternity pay but do not mirror that enhancement for employees taking shared parental leave.

The current legal position is that it is up to employers to decide whether or not to enhance contractual pay to employees on shared parental leave, when they pay enhanced maternity pay. In making such a decision, employers must take into account the need to avoid discrimination in that if they make enhanced payments to employees on maternity leave but not to employees on shared parental leave, there is a risk of sex discrimination claims from male employees who take shared parental leave and consider that they are being treated less favourably than female employees on maternity leave.

This latter point was tested out in Capita v Ali and Hextall v Chief Constable of Leicestershire [2019] EWCA Civ 900, where Mr Ali and Mr Hextall argued that the failure by their respective employers to mirror enhanced maternity pay amounted to direct and/or indirect sex discrimination. Mr Ali argued that it was direct sex discrimination by his employers to allow a new father on shared parental leave only 2 weeks’ leave on full pay when female staff were allowed 14 weeks’ maternity leave on full pay. Mr Hextall argued that it was indirectly discriminatory for him to receive only statutory pay during shared parental leave, whereas a woman on maternity leave was entitled to full pay for the first 18 weeks of her maternity leave.

In both cases, the Court of Appeal held that there was neither direct nor indirect discrimination. As regards direct discrimination, the court found that the correct comparator for a man on shared parental leave is a woman on shared parental leave, not a woman on maternity leave. The court said it was necessary to consider the purposes of maternity leave and pay, which include enabling the mother to recover from the effects of the pregnancy and childbirth.

Similarly, the Court rejected the argument that a policy of enhancing maternity pay but not shared parental pay amounted to indirect sex discrimination against men.  It held that Mr Hextall’s claim was actually an equal pay claim (which was not upheld) rather than indirect discrimination.

Although this decision gives employers a degree of clarity in respect of enhanced maternity pay and shared parental leave, the government has expressed concern about the low take-up of shared parental leave and so it may be that there is a review of statutory pay during shared parental leave in the future.

Key Points on the Government’s Good Work Plan

At the end of 2018, the Government published details of its Good Work Plan, setting out its plans to introduce a number of reforms designed to improve protection for agency workers, zero hours workers, and others with atypical working arrangements.

The Good Work Plan is the Government’s considered response to Matthew Taylor’s report:  Good Work: the Taylor Review of Modern Working Practices, published in July 2017.

The main proposals included in the Good Work Plan are:

  • • Employment status clarification. The Government says it will bring forward “detailed proposals” as to how the employment status frameworks for the purposes of employment rights and tax will be aligned. There will also be legislation to “improve the clarity of the employment status test, reflecting the reality of modern working relationships”. This is a problematic area for employers and employees alike and has the potential to be a significant development, but the Good Work Plan is light on detail as to what this will involve.
  • • Extending the right to a statement of particulars to all employees and workers from day one. This right currently only applies to employees, and the statement can be provided up to two months after employment starts.
  • • Extending the relevant break in service for the calculation of the continuous service qualifying period from one week to four weeks. This is intended to help workers who work intermittently for the same employer and find it difficult to build up employment rights.
  • • Removal of the ‘Swedish derogation’ in the Agency Workers Regulations 2010 and banning this sort of contract from being used to withhold agency workers equal pay rights.
  • • A ban on employers making deductions from staff tips.

The Good Work Plan also includes proposals to improve the enforcement of employee rights, including:

  • • Introducing a ‘name and shame’ scheme for employers who fail to pay Employment Tribunal Awards.
  • • Implementing stronger sanctions for employers who have previously lost similar cases.

The Government has not given a timetable for introducing this legislation and, with the ongoing Brexit negotiations, may have other things on its mind for the foreseeable future. It is, however, useful to be aware in a general sense of what is likely to happen.

Elective and Cosmetic Surgery and Your Employment Policies

In November, we updated our Sickness and Absence Policy to include a section on elective and cosmetic surgery.

For these purposes, cosmetic surgery may be defined as surgery which is intended to improve a person’s appearance rather than their health. Elective surgery, on the other hand, refers to any surgery that is scheduled in advance, doesn’t involve a medical emergency, and does not have to be performed within 24 hours. Elective surgery can include cosmetic surgery.

Employers must be careful to observe strict confidentiality in respect of elective and cosmetic surgery. Clearly, employers cannot disclose information about any medical procedure without the employee’s consent. Communication is key here and, in some sensitive situations, it is advisable to agree in advance with the employee what will be communicated to colleagues.

All employees, including those who are undergoing elective and cosmetic surgery, are entitled to Statutory Sick Pay (SSP) when they are unfit to work provided that they follow the proper procedures and supply the appropriate certification. If employees are indeed unfit to work, and have provided the employer with the correct notice, SSP should be paid.

Contractual Sick Pay is, however, in the control of the employer and it is advisable to be clear about what the company policy is. Some employers may treat elective and cosmetic surgery in the same way as ‘ordinary’ sick leave but, if different arrangements apply, the company policy should be clear and applied consistently.

Employed vs. Self-Employed – Can You Spot the Difference?

A self-employed/independent contractor working arrangement has considerable attractions for both the employer and the self-employed worker, but it can be difficult definitively to identify the difference between employed and self-employed status.

HMRC provides helpful guidance that employers and workers can use to determine if an individual is an employee or self-employed and the key factors that determine whether a worker is an independent contractor depend on the tests of control, substitution and mutuality of obligation.

Control

If the client/employer specifically tells a contractor how to perform a task, what task to perform, when to perform it and where the task should be performed – known as ‘how, what, when and where’ tests – then the worker is probably controlled by the client and therefore an employee.

Substitution

If a contractor is required to perform the services himself/herself without being allowed to provide a substitute, then this, too, is an indication of employment.

Mutuality of Obligation

This is where an employer is obliged to provide work and the employee is obliged to perform the work. If a worker has to perform any task allocated by the client or employer then there is a mutuality of obligation and the worker is probably not an independent contractor.

In the case of a dispute, a range of factors are taken into account but these are the main ones.

With the rise of the gig economy worker, the situation has become even more complicated.

A Gig as a Plumber

Earlier this year, a gig economy worker status question came before the Supreme Court for the first time in the case of Pimlico Plumbers Ltd v Smith.   Its decision – that Mr Smith was indeed a worker and not a self-employed contractor as stated in his contract – follows the direction of travel set by other cases which have considered whether staff in the gig economy are workers, and so entitled to paid holiday and limited other rights, or genuinely self-employed and out of employment protection altogether.

Pimlico Plumbers Ltd v Smith concerned Mr Smith, a plumber working for Pimlico Plumbers, who claimed that the company had deprived him of a number of employment rights, such as paid holidays and sick pay, because it wrongly classified him as a self-employed contractor.  The background of the case was that Mr Smith had worked for Pimlico Plumbers Ltd for over five years and had a contract with the company which described him as an independent contractor.  Mr Smith was registered for VAT, submitted invoices, and filed tax returns on the basis that he was self-employed.  Mr Smith’s contract was terminated four months after he suffered a heart attack. He subsequently brought various claims in the Employment Tribunal and his employment status was considered as a preliminary issue. The Supreme Court has now upheld the rulings of the Employment Tribunal, Employment Appeal Tribunal (EAT), and Court of Appeal that Mr Smith was a worker, not an independent contractor. This decision is a significant one and means that Mr Smith can now proceed with his claims for unlawful deductions from wages, paid holiday, and disability discrimination.

In reaching a decision, the Supreme Court noted that Mr Smith took on a significant proportion of the commercial risk (i.e. he would not be paid in the event a customer failed to settle an invoice), provided his own tools and materials, was personally liable for his work, and was not supervised by the company. However, the facts considered by the court showed that Pimlico Plumbers had tight control over Mr Smith’s working life, which pointed away from Mr Smith being a truly independent contractor.

The following factors were particularly relevant to the Court’s decision:

  • • Mr Smith was required to carry a company identity card, wear a branded uniform, and use a Pimlico Plumbers-branded, tracked van leased from the company;
  • • Pimlico Plumbers had tight control over payment terms and the administrative aspect of all jobs;
  • • Mr Smith’s contract referred to ‘wages’, ‘gross misconduct’, and ‘dismissal’;
  • • Mr Smith was subject to post-termination restrictive covenants, including a three-month non-competition covenant;
  • • The terms of Mr Smith’s contract clearly pointed to an obligation of personal performance. Although he could appoint another Pimlico operative to do a job he had quoted for, but no longer wished to perform, this was more like swapping a shift than providing a substitute; and
  • • Mr Smith’s contract stated that the company was not obliged to offer him work and he was not required to accept work, but Mr Smith’s contract also stated he must work at least 40 hours per week for Pimlico. The working hours indicated a level of commitment to the company on Mr Smith’s part which was inconsistent with his self-employed status.

Although this is an interesting and significant case, the question of employment status is always tied closely to the facts of any given case, and it does not automatically follow, therefore, that other gig economy workers have employment rights.

More cases are due to be heard by courts and tribunals in the coming months and this should hopefully provide more clarity.  In the meantime, employers should ensure that they have written contracts in place that reflect the reality of the working relationship.  Here at Simply-Docs, we have a variety of documents covering a wide range of employer/employee and freelance working relationships accompanied by explanations of when the document should be used.  If in doubt, always seek professional advice.

A Tough Gig?

Time to deliveroo some über-important rights to gig economy workers?

Many of us have been there. You whip out your smartphone to book a taxi to take you home and, on the way, you order up a tasty takeaway to be sped to your house in a large box strapped the back of a student riding a bicycle. It’s convenient to be sure, but many (not least our drivers and box-backed riders) can’t help but notice that many legal protections bestowed upon employees are conspicuous only by their absence.

The gig economy has grown considerably in recent years and it can be highly beneficial, not only for businesses, but also for workers who value the flexibility inherent in the business model. Such benefits notwithstanding, however, the House of Commons Work & Pensions, and Business, Energy & Industrial Strategy Committees recently called on the government to close loopholes in employment law that currently allow gig economy businesses to force workers to be self-employed, denying them key entitlements such as holiday and sick pay.

This follows on from the Taylor Review, commissioned by the government in October 2016 and lead by Matthew Taylor, Chief Executive of the Royal Society of the Arts. The Review’s report (available here) was published in July 2017 and, at the time of writing, is yet to receive a full response from the government.

Shifting the Burden

There have been a number of court cases concerning the status of gig economy workers, including some which the persistently-embattled Uber has lost, but the default position for such workers remains mostly unchanged.

The Committees argue that “the current situation puts an unacceptable burden on workers to address poor practice through an expensive and risky court case while the companies themselves operate with relative impunity.” Under the new proposals, gig economy workers would benefit from a new presumption of worker by default, shifting the burden onto the companies who would have to either provide basic standards, rights, and benefits to their workers or prove that their workers’ true status reflected self-employment. Furthermore, the proposals include tough new penalties designed to outweigh any gains that companies might stand to make from unlawful practices.

Wage Premiums

The Committees’ proposals also include measures to compensate workers for the uncertainty inherent in gig economy work in the form of a wage premium for hours where work cannot be guaranteed. Not only would this help to balance out a situation in which the flexibility benefits can become quite one-sided, but it may also encourage companies to provide more clearly-defined hours or staff rotas.

A Good Gig?

Pleasing everyone may be difficult, of course. While it would be difficult to argue against improving the rights and protections afforded to gig economy workers, a trade-off that may stand to reduce the flexibility in the system may not be so welcome. Gig economy businesses, of course, maintain that everyone working for them loves the flexibility, and they most likely do, however the lack of protections and rights must surely be addressed in some manner that allows the flexibility in working hours to be preserved.

Do you work in the gig economy? Does your business take on staff on a self-employed basis like this? If so, how would you respond to a change in the law that required you to provide increased rights and benefits to workers while retaining the flexibility inherent in the gig economy of today? As ever, we value your input on the subject!

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