Employment Update - March 2020

Coronavirus - what should employers do?

The increase in the spread of coronavirus (Covid-19), both in the UK and globally, presents a number of challenges for employers. Below we highlight some of the key employment law issues raised by the outbreak.

• Travel guidelines: Many employers are putting in place travel guidelines which prohibit all but essential business travel to affected regions, to minimise the risk of possible infection spreading in the workplace. Employers should also consider implementing procedures for staff to declare any recent or planned personal travel to affected areas, or any close contact with persons from affected areas.
  
  
• Quarantining staff: Depending on the areas visited and the extent of contact, workers who have been in affected areas (or in close contact with those who have) may be required to work remotely where possible for 14 days, to cover the period during which any coronavirus symptoms are likely to become evident. Where remote working is not possible, the worker could be required to remain at home. Such a requirement would be justified on health and safety grounds; however, the employer would be required to continue full pay in these circumstances.
  
  
• Self-isolation: Acas has produced guidance for employers which confirms that workers will be entitled to statutory sick pay if NHS 111 or a doctor advises them to self-isolate. The Government has also announced that statutory sick pay will be available for those who self-isolate from day one of absence (currently statutory sick pay is only payable from the fourth day of absence). It is also advisable to treat self-isolation as sickness absence under any enhanced company sick pay policy, to avoid employees coming to work in order to get paid and putting others at risk.
  
  
• Staff refusing to attend work: Some healthy employees may remain at home for fear of contracting the virus. Absent any particular vulnerability, the employer does not have to allow this and could, in theory, take disciplinary action against employees who refuse to come to work. However, depending on the circumstances, it will usually be more appropriate to allow the employee to work from home or take holiday or unpaid leave.
  
  
• "Pandemic plans": Many employers are thinking about their contingency planning for large-scale sickness absence and widespread remote working, and whether the business has the capabilities for this, in the event there is a rapid escalation of the virus in the UK or an incident of coronavirus in the workplace. Some organisations have already asked staff to work remotely where there has been a case or suspected case of the virus in the office.

Other measures to minimise the risk of infection spreading in the workplace include extra cleaning of communal surfaces (e.g. door handles, hand rails and lift buttons) and reminding staff to maintain good basic hygiene (e.g. by washing or sanitising hands frequently, especially after using public transport). Employers should monitor and follow the advice and guidance from government and relevant authorities, such as Public Health England, in order to discharge their general duty to protect the health and safety of staff and visitors to their premises.

We have produced a briefing detailing some of the other considerations for businesses, including issues associated with supply chain disruption – click here to access the briefing.

Post-Brexit immigration system

The Government has unveiled details of how the immigration system will look from 1 January 2021. In a significant change, employers will need a sponsor licence to sponsor both EU as well as non-EU employees.

The post-Brexit immigration system essentially replicates the existing Tier 2 sponsored skilled work visa regime and extends this to cover both EU and non-EU nationals. There will, however, be some changes to reflect the widening of the system:

• the resident labour market test will be removed (meaning employers will no longer have to show they cannot find a suitably qualified British candidate)
  
  
• the minimum salary threshold will be reduced from £30,000 to £25,600 (but employers will still need to pay the higher job-specific rate for a role set by the Home Office)
  
  
• lower salary thresholds will apply to candidates who have a relevant PhD qualification or are filling an occupation where there is a recognised skills shortage (eg nurses)
  
  
• the minimum skill level required will be reduced from RQF6 (broadly, degree level roles) to RQF3 (broadly, roles requiring an A-level qualification)
  
  
• the annual limit on visas (currently 20,700) will be suspended.

Under the new regime, EU nationals will have to demonstrate a certain level of English language ability, as non-EU nationals do now. The existing visa fees will also apply to EU nationals (currently around £8,830 for a five-year visa), representing significant additional costs for employers.

The Government has also confirmed there will be no general low-skilled or temporary work route, meaning employers will have very limited ability to recruit EU nationals in lower skilled roles, particularly in sectors such as hospitality, retail and manufacturing. Further details of the new regime are expected later this year and Employment Update will report developments.

Given the requirement to have a sponsor licence to sponsor both EU and non-EU employees, employers who are not already licensed sponsors should consider applying for a licence now to prepare for the changes. We are expecting a spike in applications as we approach January 2021 which may lead to delays.

If you would like to discuss making a sponsor licence application, or the impact of the changes on your business, please do get in touch with your usual Employment department  contact.

Disciplinary process - role of investigator

The employee in this case was a university professor. He failed to report a sexual relationship he had with a student that he supervised, contrary to the university's policy. Another professor and an HR partner were appointed to investigate. They produced an investigation report, a draft of which was reviewed by the university's inhouse lawyer. The final version of the report left out some findings that would have been favourable to the employee, including an opinion that the employee had not abused his power and that there was nothing immoral or scandalous about his conduct. Following a disciplinary hearing, the employee was dismissed for gross misconduct. He brought an unfair dismissal claim, arguing that the removal of findings favourable to him in the investigation report made his dismissal unfair because the inhouse lawyer had exercised too much influence over the report.

However, the Employment Tribunal ruled that the dismissal was fair and the Employment Appeal Tribunal (EAT) agreed. The Tribunal and EAT said that the purpose of the investigation was simply to identify whether there was a disciplinary case to answer. The findings removed from the draft investigation report were taken out on the advice of the inhouse lawyer because they contained opinions and "evaluative conclusions", which went beyond the scope of the investigation. Accordingly, the dismissal was fair despite the alterations to the report.

Disciplinary hearing - do you have all the facts?

The employee in this case was dismissed for inappropriate sexual and intimidating behaviour following a work social event. During an evening at the pub, he was seen kissing a university student who was on work placement and the two were also seen entering the disabled toilet. A manager was appointed to conduct an investigation. The student alleged that the employee had followed her into the toilet, locked her in and assaulted her. On the advice of the investigator, she reported the matter to the police. Another manager was appointed to chair an internal disciplinary hearing. Prior to the disciplinary hearing, the investigator learned that the student had withdrawn her complaint to the police but did not pass this information on to the chair of the disciplinary hearing. The disciplinary chair decided to dismiss the employee, and he brought an unfair dismissal claim.

The Employment Tribunal initially ruled that the dismissal was fair. However, on appeal, the Employment Appeal Tribunal ruled the dismissal was unfair. The withdrawal of the police complaint by the work placement student would have been material in the context of the employer deciding to dismiss or not. The investigator's failure to pass this information on to the decision-maker therefore made the dismissal unfair.

Off-payroll working

HMRC has confirmed that changes to the off-payroll working rules will come into force on 6 April 2020, as planned, meaning employers should press ahead with their preparations.

In early 2020, HMRC conducted a review of the proposed changes to the off-payroll rules and, on 27 February 2020, published the results of its review. The report includes some good news, including confirmation that:

• the new rules will only apply to payments made for services provided on or after 6 April 2020
  
  
• HMRC will not look into the tax affairs of contractors for prior tax years unless there is fraud or criminal behaviour
  
  
• "wholly overseas" clients with no UK presence will not have to apply the new rules (but contractors working for such clients will have to apply the existing IR35 rules) and
  
  
• HMRC will take a "light touch" approach to penalties in 2020/21.

We have been working with a number of clients on implementation and have prepared a 'toolkit' of key documents – please speak to your usual Employment department contact for more information.

Pay for family friendly leave

On 5 April 2020, the weekly rates of statutory maternity, paternity, adoption and shared parental pay will increase from £148.68 to £151.20 per week.

Statutory sick pay

On 5 April 2020, the weekly rate of statutory sick pay will increase from £94.25 to £95.85 per week.

Unfair dismissal compensation

On 6 April 2020, the maximum compensatory award for unfair dismissal will increase from the lower of a year's pay and £86,444 to the lower of a year's pay and £88,519.

Statutory redundancy pay

On 6 April 2020, the maximum amount of a week's pay, for the purposes of calculating statutory redundancy pay (among other things) will increase from £525 to £538 per week. The maximum statutory redundancy payment will therefore increase from £15,750 to £16,140.

Termination payments

From 6 April 2020, changes will be made to the national insurance due on termination payments, including redundancy payments. Currently, where an ex gratia payment is made on termination of employment (on top of notice pay), the first £30,000 can be paid free of income tax and any amount above this is taxable. However, the entire payment is currently exempt from national insurance contributions. From 6 April 2020, the first £30,000 of any ex gratia termination payment (including any redundancy payment) will still be free of income tax and national insurance but any amount above this will be subject to employer national insurance contributions.

HMRC has confirmed the change will only apply where both the termination of employment and the payment are on or after 6 April 2020.

Employment contracts

As reported in the January 2020 Employment Update, there are some changes to the particulars required to be included in employment contracts from 6 April 2020. In addition, employers will be required to provide a written statement of terms and conditions for all workers (eg casuals, freelancers and some contractors and consultants), not just employees. We have been working with a number of clients to update their template agreements ahead of the April 2020 changes. Please get in touch with your usual Employment department contact if you would like to discuss.

Parental bereavement leave

From 6 April 2020, employees who lose a child under the age of 18, or suffer a stillbirth after 24 weeks, will be entitled to two weeks' statutory bereavement leave. The leave will be able to be taken in one block or as two separate blocks of a week each. There will be no service requirement for the leave but parents with at least 26 weeks' service will also be paid statutory parental bereavement pay at the same rate as statutory paternity pay (which, from 6 April 2020, will be £151.20 per week).

Since the last Employment Update, our work has included:

• advising on a UK restructing, including collective consultation obligations as well as TUPE issues resulting from part of a business being hived out
  
  
• advising on the changes to the off payroll working rules and whether specific contractor arrangements will fall inside or outside scope
  
  
• presenting an engagement session for a client's contractor population on the off payroll working rules, aimed at dispelling myths and explaining the impact for them
  
  
• supporting a client in dispute with employees over the use of fingerprint scanners
  
  
• assisting with a sabbatical and loan agreement to deal with business downturn
  
  
• defending a client whose competitor is seeking to offload employees onto them using TUPE on a service provision change
  
  
• drafting a global Code of Conduct for a listed company.