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February 2020 newsletter

In this months edition...
Almost three million UK workers will receive a pay rise in April 2020 of 6.2% following the government’s pledge to deliver on promises to increase the national minimum wage (NMW), the biggest raise since the NMW was introduced more than two decades ago.

What's on the horizon
NMW Rates for April 2020 announced
New Employment Legislation (April 2020)
Day One right for an Employment Contract
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Recent cases

Dismissed, but then later reinstated
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HR good practice

Harassment
National Minimum Wage
Abbreviations used in this issue:
ET - Employment Tribunal
EAT - Employment Appeal Tribunal
NMW - National Minimum Wage
Updates to member's toolkit
 
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WHAT'S ON THE HORIZON ...
The following changes are due to come into force in April 2020.

Increase in holiday reference period from 12 weeks to 52 weeks: the proposal is to increase the reference period used for determining a week's pay when calculating holiday pay for workers with irregular hours from 12 weeks to 52 weeks, which is seen to be a fairer time period to use

Extension of the right to a written statement of employment particulars to all workers:  
Written statement will be a day one right for all workers. Employers will also have to provide additional information as mandatory content for a written statement

Parental bereavement leave rights take effect: Provides for at least two weeks' leave for employees following the loss of a child under the age of 18 or a stillbirth after 24 weeks of pregnancy. Employees with 26 weeks' continuous service will be entitled to paid leave at the statutory rate and other employees will be entitled to unpaid leave

In April 2020, the IR35 Regulations will begin to take effect to medium and large companies in the private sector that contract with personal service companies for the provision of services. This has the effect that these companies will have to account for tax and national insurance through PAYE in the same way as the public sector has been required to do since April 2017. (See November Newsletter for more Information)

Extension of the right to a written statement of employment particulars to all workers.
Whilst all contracts for new joiners starting after April 2020 will need to be amended and updated, two of the biggest changes are that such statements will now need to be given to employees on the first day they start work. 

Practically speaking many businesses will therefore need to be on top of their paperwork sooner than before.

Who do they need to be given to and when?
Many employers are using this as an opportunity to review and refresh contract terms to check they comply with other recent developments and are generally fit for purpose.

It will be necessary to provide Statements to employees and there is no minimum service requirement. The statements also need to be provided on or before the individual starts their employment.

The new requirements do not apply to employees employed before 6 April 2020; however, they can request a Statement complying with the new requirements and it will need to be provided within one month of a request.

What additional information needs to be provided and where should it be included?
Statements may be given as a separate statement or included in a letter of engagement or contract of employment. Whereas previously employers were allowed to include some information in another document, now the majority of information needs to be included in a single document (known as the “Principal Statement”). On top of the current information required in the Statement, the following additional information needs to be included in Statements from 6 April 2020:
 
  • The days of the week that they are required to work and whether the days are variable and, if so, how they vary;
    • Any paid leave entitlement which is additional to annual leave and holiday pay (such as maternity and paternity leave) ("Additional Paid Leave");
    • Details of all remuneration and benefits;
    • Any probationary period, including any conditions and its duration, and
    • Any training entitlement provided by the employer (including whether any training is mandatory and/or must be paid for by the worker ("Mandatory Training").
Going forward from April 2020 the Statement can only refer to another "reasonably accessible" place (e.g. the employer's intranet or Handbook or requested from HR) where terms relating to the following can be found:
  • incapacity and sick pay;
  • Additional Paid Leave;
  • pensions/pension schemes;
  • certain information about disciplinary and grievance procedures; and
  • any training entitlements (other than terms relating to Mandatory Training).
The Statement can only refer to the law or to a collective agreement in relation to terms on notice periods, but it is not permissible to refer to any other accessible document for this information.

From 6 April 2020, most of the terms in the Statement need to be given on day one or before. There are still some exceptions to this though and the following information can be given in a later instalment in a supplemental statement as long as it is given within 2 months of the job starting:
  • pensions/pension schemes
  • certain information about disciplinary and grievance procedures
  • any training entitlements (other than terms relating to Mandatory Training)
  • Practical impact and steps for employers
In practice, these changes mean that businesses need to have processes in place to ensure they are on top of their paperwork and provide information at the right time and in the right way to the right individuals.

It will also have an impact on what information should be received and provided as part of business transfers and outsourcing arrangements under TUPE.

Determining whether contracts are compliant with the new changes on Statements is not entirely straightforward and could be an administrative burden for employers.

Updated template employment contracts will be available on the Toolkit, once all changes are confirmed following Brexit.
 
RECENT CASES
Individuals who have been dismissed, but then later reinstated

The Employment Appeal Tribunal (EAT) has ruled that individuals who have been dismissed, but then later reinstated, can still claim that their dismissal amounted to a detriment under the Equality Act 2010.

Under the Equality Act, an individual is victimised when they are subjected to a detriment because they have done, or it is believed they have done, a ‘protected act’. For example, if an individual brings a complaint that they have been discriminated against as a result of their disability, and then feel they have been mistreated as a result, they may also be able to claim victimisation.

In situations where an employee is dismissed but then reinstated or re-engaged, there is generally no dismissal for the purposes of an unfair dismissal claim.

Facts
In this case, the claimant was disabled and had previously taken time off due to sickness as a result. His role became at risk of redundancy and when he refused an alternative offer, which would have seen him relocate to an office at the other end of the country, he was dismissed. However, the organisation had previously agreed with its recognised trade union that no roles of the claimant’s grade would be made redundant in that year. They therefore retracted his dismissal but failed to do so until his notice expired.

The claimant argued that the redundancy had been used as an excuse to get rid of him as he had previously raised a grievance that related to his disabilities. He later brought numerous claims to the employment tribunal, including disability discrimination and victimisation.

ET
Viewing the events through ‘the prism of case law on dismissal’, the tribunal held that, as the claimant been reinstated, his potentially unfair dismissal could be held to not have taken place. They found that the organisation had ‘put right a bad decision’, with the claimant having all of his employment rights restored when he was reinstated. Therefore, this dismissal could not amount to a detriment and the claimant was not subjected to victimisation.

The claimant appealed against this decision to the EAT. He argued that the tribunal had wrongfully applied the law in relation to unfair dismissal claims to his discrimination claim and had therefore failed to correctly determine if he had suffered a detriment.

EAT
The EAT upheld his appeal in relation to victimisation, agreeing that the tribunal had wrongfully applied the law of unfair dismissal to discrimination.  

They explained that a dismissal can still amount to a detriment for the purposes of victimisation even if it is later withdrawn. This is because detriment in discrimination law is a separate issue to that of unfair dismissal. The tribunal had erred as they had determined that the vanishing of the unfair dismissal issue also meant the detriment had vanished. This was not the case. For example, such an action could have led to non-pecuniary loss, including injury to feelings, that could constitute a detriment.

Note for employers
It can be difficult to establish what can be considered a detriment for the purposes of the Equality Act 2010. Generally, the employee will need to demonstrate that a reasonable individual in their position could have the view that they have been disadvantaged in their working conditions. As seen here, even if an organisation recognises that it has unfairly dismissed an employee and then does reinstate them, such an act does not automatically remove the potential for a detriment claim. In claims where unfair dismissal and discrimination does overlap, organisations must be careful to consider all elements. These two separate claims do not serve to cancel each other out.
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HR GOOD PRACTICE
Harassment

What employers can learn about harassment from Gareth Southgate?
Following the racist abuse directed at England football players at a recent match, how should organisations deal with similar issues in the workplace.

Last year’s Uefa European qualifier between England and Bulgaria in Sofia will forever be remembered for the worst and best behaviour of which people are capable. On the one hand, the conduct of a section of home fans who chanted racist abuse and performed Nazi salutes, directed towards the England team’s black players, was deplorable. On the other, the players who called out the behaviour, stopping the game until the abuse had been addressed, with the support of England manager Gareth Southgate, were commendable.  

While employers are unlikely to be faced with a situation akin to harassment from a group of this particular size, nor a group channelling such poisonous mentality, it does raise some questions about how they might address behaviour of a similar nature.

What if this happens in the workplace?
If an employee were to share concerns about being harassed, they should be able to expect the full support of their employer. Harassment under the Equality Act 2010 means “unwanted conduct” related to one or more of the protected characteristics, of which race is one. Harassment is further defined by the Act as “conduct that has the purpose or effect of violating someone’s dignity, or creating an intimidating, hostile, degrading, humiliating or offensive environment” for someone.  

Prevention is better than cure
Employers need to have robust policies in place to deal with this kind of problematic behaviour and should be expected to follow them at all times. However, failure by businesses to follow their own policies is unfortunately not untypical.  

Simply having a policy in place is no use unless the employer is prepared to actively follow it. Failure to adhere to their own policies puts companies at risk of being taken to an employment tribunal – which has no cap on the level of compensation it may award. This poses a huge reputational risk for any business. No company wants to be known for harassment of workers. This affects an organisation’s ability to recruit and retain staff and can also be deeply off-putting for customers and trading partners. 

Good employee relations can be fostered where staff receive training about anti-harassment policies, both to raise awareness for those who may be tempted to engage in problem behaviours, and to give confidence to employees that harassment is not, and will not, be tolerated.

Anti-harassment policies are essential and foundational in good governance and should outline what kinds of behaviours could constitute harassment, alongside how an individual’s personal perception of harassment is important and relevant. In most cases, anti-harassment policies sit within an organisation’s guidelines on equality, diversity and inclusion.

Without such procedures to guide behaviours, there is a real risk of claims in the employment tribunal for harassment relating to one or more of the protected characteristics under the Equality Act, with liability not only in relation to employment rights (and any compensation awarded), but also exposure to failings of governance standards and regulatory compliance. Terms of reference for boards of directors and committees now often include specific references to the company’s equality, diversity and inclusion policies, with measurable objectives as part of its risk management systems. 

Directors and boards, including trustees and council members, who ignore or sideline equality, diversity and inclusion issues do so at their peril. There is no place for harassment in the modern workplace, and those who do not take it seriously, or act accordingly, may well face repercussions, including claims and reputational damage.  

Top Tips
Do:
  • Have robust policies in place, defining all behaviours that could constitute harassment.
  • Ensure all policies are understood and actively followed by all employees.
  • Include the anti-harassment policies within your organisation’s guidelines on equality, diversity and inclusion.
  • Ensure all employees (including senior management teams) undertake anti-harassment training – this ensures an educated workforce, reduces the risk of undesirable behaviours and fosters good employee relations.
Don’t:
  • Fail to be prepared. Ensure clear policies are in place and all employees are aware of and understand them.
  • Divert from your company’s policies – this puts you at increased risk of being taken to an employment tribunal.
  • Ignore any potential claims, no matter how small of an issue it may seem. Everyone’s perception of harassment is important and relevant.
*Article by Jennifer Maxwell-Harris, an employment partner at Joelson for People Management.

National Minimum Wage Rates

The national minimum wage (NMW) applies to all workers and is paid at different rates according to age. There is a separate rate for apprentices, and a National Living Wage (NLW) applies to workers aged 25 and over. The current and future rates for the minimum wage (which represents gross pay) are as follows:
 
Age Rate from 1 April 2019 Rate from April 2020
Workers aged 25 and over (NLW)  £8.21 ph £8.72 ph
Workers aged 21 and over £7.70 ph £8.20 ph
Development rate for workers aged 18-20 £6.15 ph £6.45 ph
Young workers rate for workers aged 16-17 £4.35 ph £4.55 ph
Apprentices under 19, or over 19 and in the first year of the apprenticeship £3.90 ph £4.15ph

Employers paying output workers, including home workers, piece rates (payment according to the number of items produced or tasks completed) must either pay the minimum wage for every hour worked, or a 'fair piece rate' (currently set at 120 per cent of the NMW). 

The minimum wage rates are reviewed annually and will be updated in April.

Key points
  • All workers, except those who are genuinely self-employed, are entitled to receive the NMW/NLW
  • Gross pay is used to calculate whether an eligible worker has been paid the minimum wage.
  • The NMW/NLW is calculated by including most financial awards or payments, but excluding allowances such as regional or on-call allowances, unsocial hours payments, tips and gratuities, or any benefits in kind, with the exception of accommodation up to a specified amount.
  • Employers can average the hourly rate of pay over the pay period.
  • Non-compliance can result in an enforcement notice requiring the employer to pay the difference between what was actually paid and what the worker should have received under the NMW legislation. Further non-compliance could result in the issue of a penalty notice and financial penalties.
 
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This bulletin is for general information only.  It is not intended to constitute professional advice.  Though The Sevier Consultancy Group is confident of its accuracy, no duty of care is assumed to any recipient of the bulletin and no liability is accepted for any omission or inaccuracy.
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