Legal briefing | |

Employment Update - March 2022

Overview

Key employment and business immigration developments for employers.

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In the news

Living with COVID - what does it mean for employers?

The Government has announced a plan for "Living with COVID" in England but what does it mean for employers?

Under the plan, the legal requirement to self-isolate for those who test positive for COVID-19 ended on 24 February 2022. However, the Government continues to advise anyone with COVID-19 symptoms or a positive test to stay at home for up to ten days, with the option of ending isolation early after negative tests on days five and six. On 1 April 2022, this guidance will also end, and people will be advised to "exercise personal responsibility".

As of 24 February 2022, unvaccinated close contacts of a COVID-19 case are also no longer required to self-isolate. However, the Government encourages employees to work from home, where possible, if they live with, or have stayed overnight with, someone who has COVID-19.

The rules on statutory sick pay are also changing on 24 March 2022. From 24 March 2022, workers self-isolating with no symptoms will no longer be entitled to statutory sick pay. Normal sick pay rules will, of course, continue to apply to those with COVID-19 symptoms. However, statutory sick pay will be payable from the fourth day of absence for all types of illness (during the pandemic, statutory sick pay was payable from day one for any COVID-19-related absence).

Employers must now consider what measures will be put in place following these changes – for example, in what circumstances to require workers to remain away from the workplace and for how long. Employers may also wish to review their sick pay policies. Many employers are revising their workplace health and safety risk assessments in the light of the changes and are considering measures over and above the Government guidance. We have produced a checklist of considerations for employers in the light of these changes – if you would like a copy, please speak to your usual Employment Department contact.

Immigration radar

Right to work checks 

Employers are required to check that all employees have the right to work in the UK. Currently, right to work checks for EU nationals must be conducted online but checks for British and Irish nationals must be conducted manually. Checks for all other visa-holders can be done manually or online. However, a number of changes are being made to right to work checks:

  • The COVID-19 changes to manual right to work checks are being extended. Normally manual checks require the employer to see original documents in the presence of the individual. However, during the pandemic, temporary changes were made to allow checks to be done virtually using scanned copies of documents with verification completed over a video call. The Home Office has now said that these temporary changes will continue until 30 September 2022.

  • From 6 April 2022, mandatory online checks will be required for EU and non-EU national visa holders, including those with a biometric residence permit (BRP), biometric residence card (BRC) or frontier work permit (FWP). Employers can conduct online checks through the Home Office's online right to work service.

  • From 6 April 2022, employers will be able to carry out digital checks for British and Irish nationals using a certified digital identity service provider. This will be optional rather than mandatory, and employers can continue to conduct manual checks if they wish.

Employers should consider their approach to right to work checks going forward and update their policies and training in the light of these changes.

Work visa delays

The Home Office has announced that it is prioritising Ukraine Family Scheme applications in response to the humanitarian crisis caused by the invasion of Ukraine. This means that applications for new work, study and family visas made outside the UK may take longer than usual to process. Priority processing services have also been temporarily suspended and it is not clear at this stage when they will be reinstated. Employers should factor in the potential for visa delays for any new recruits or international transfers from abroad.

Tier 1 investor visa closed

On 17 February 2022, the Tier 1 Investor visa closed to new applicants. The Tier 1 Investor visa was for high-net-worth individuals with at least £2 million to invest in the UK. While the route is now closed to new applicants, it remains open for extension applications until 17 February 2026 and applications for indefinite leave to remain if submitted by 17 February 2028. The Government also intends to make alternative provision for investment-related visas from autumn 2022, although no details have been published at this stage.

High potential individual route

The Government plans to introduce a new High Potential Individual visa route this spring. This route will be for graduates of top overseas universities who want to work or look for work in the UK following completion of their degree. High Potential Individuals will not need to be sponsored by a licensed employer but must have completed a bachelor's degree or above from a recognised university in the last five years. They will be able to come to the UK for two years (with a bachelor's degree) or three years (with a PhD) but this route will not lead to settlement.

Global business mobility route

The Government plans to rebrand and expand the Intracompany transfer visa route as the Global Business Mobility route. The Intracompany transfer visa route is for employers who are licensed sponsors to bring employees from overseas branches or group companies to work in the UK. The new Global Business Mobility route, which is expected to open from 11 April 2022, will encompass the following sub-categories:

  • Global Business Mobility – Senior or Specialist Worker: This route reflects the traditional Intracompany transfer route and will allow employers who are licensed sponsors to bring senior managers or specialist employees from overseas branches or group companies to work in the UK. The individual must have worked for the sponsor's group outside the UK for at least 12 months to be eligible (unless they are a high earner).

  • Global Business Mobility – UK Expansion Worker: This route will be available where the employer sponsor has not yet begun trading in the UK but needs to bring senior managers or specialist employees to the UK to assist with setting up or expanding the business in the UK. The individual must have worked outside the UK for the sponsor's group for at least 12 months (unless they are a high earner).

  • Global Business Mobility – Graduate Trainee: This route is for overseas employees within the sponsor's group who are on a graduate training course leading to a senior management or specialist position and who are required to do a work placement in the UK. The individual must have worked outside the UK for the sponsor's group for at least three months.

  • Global Business Mobility – Secondment Worker: This route is for workers who are not employed in the sponsor's group but are being seconded to the sponsor in the UK as part of a high value contract or investment by their overseas employer.

  • Global Business Mobility – Service Supplier: This route is to allow workers who are either self-employed or employed by an overseas service provider to travel to the UK temporarily to deliver services in line with a UK trade commitment.

The maximum stay in the UK under these routes will generally be five years and the Global Business Mobility route will not lead to settlement in the UK.

Case watch

Holiday carry over for workers

A recent ruling confirms that workers who have not been given paid holiday because they were treated as self-employed are able to claim holiday pay going back to the start of their engagement.

The individual in this case was a plumber for Pimlico Plumbers. He was treated as a self-employed contractor throughout his engagement and was not entitled to paid holiday. As a result, he chose to take unpaid holiday at various points throughout the engagement. When the arrangement ended, he successfully brought a claim arguing that he was a "worker" and therefore entitled to paid holiday. He then sought backpay for the unpaid holiday taken. The question was whether his claim for holiday pay had to be brought within three months of each holiday (in which case it was out of time) or within three months of the termination of his engagement (in which case it was in time).

The Court of Appeal has now ruled that the claim for holiday pay was in time. The Court said that where a worker is not given paid holiday because their employer does not recognise their right to paid holiday, the holiday is carried forward indefinitely and becomes payable on termination. The same is true whether the worker has taken unpaid holiday or has taken no holiday at all. Holiday also carries forward indefinitely in the same way where any worker has not been given an effective opportunity to take their holiday in the relevant holiday year.

SMITH V PIMLICO PLUMBERS

Normally, the first four weeks of statutory holiday entitlement must be taken in the leave year in which it accrues and cannot be carried forward into subsequent years. However, this case confirms that such holiday will automatically carry forward where the worker has not taken any holiday or has taken unpaid holiday because the employer does not recognise the worker's right to paid holiday. The holiday carries forward and becomes payable on termination. Where a worker has been misclassified as a self-employed contractor for several years, this could mean the employer becomes liable for several years' holiday backpay going back to the start of the engagement. Employers should therefore review the employment status of their workers and contractors, to ensure they are properly categorised.

Holiday would also carry forward where the employer has not given the worker an effective opportunity to take their holiday in the leave year (e.g. where the worker could not take holiday due to work commitments). Employers should therefore ensure they remind workers to take their holiday in the leave year in which it falls due, otherwise it will be lost. The same approach should be taken for employees who are on long-term sickness absence or in receipt of permanent health insurance, to avoid liability for several years' holiday accruing.

The ruling in this case relates to the first four weeks of statutory holiday entitlement (which derives from EU law) but not the additional 1.6 weeks of statutory holiday in the UK or any contractual entitlement over and above statutory.

Fire and rehire

The High Court has granted an injunction restraining Tesco from attempting to "fire and rehire" employees in order to change their terms.

Tesco recognises the trade union USDAW for collective bargaining purposes. Historically, Tesco had agreed with the union to give employees an element of "retained pay" as an incentive for employees to remain with the company and relocate to a new site, instead of taking redundancy during a reorganisation. The "retained pay" became a contractual entitlement. Tesco said in communications with staff that "retained pay" would remain an entitlement as long as the individual remained employed and that it could not be negotiated away, except in limited circumstances. A collective agreement with the union also described it as a "permanent feature" of the employment contract.

However, years later, Tesco announced its intention to remove "retained pay". It offered employees the chance to give up "retained pay" in return for a lump sum compensation payment, otherwise it said employees would be dismissed and offered new terms which excluded "retained pay". However, USDAW successfully obtained a court order preventing Tesco from dismissing employees to remove "retained pay". The High Court ruled that, given the promises that "retained pay" would be permanent, there was an implied term in employees' contracts that Tesco would not terminate the contract in order to remove "retained pay".

USDAW & OTHERS V TESCO STORES LTD

This is a unique case and the ruling is arguably limited to its facts. It is unusual for an employer to promise that a particular benefit or element of pay is "permanent" and cannot be negotiated away. This case is a reminder to be very careful about such promises. However, the ruling does not prevent employers from using "fire and rehire" in appropriate circumstances to change terms and conditions.

The use of "fire and rehire" has come under scrutiny in recent years, as it involves implementing changes by terminating employees' contracts and offering them the same job on amended terms. Given the risks associated with "fire and rehire", employers should see it as a last resort, to be used only where agreement cannot be reached with employees and only where there is a legitimate business need to make the changes.

New law

Statutory sick pay

On 11 April 2022, the rate of statutory sick pay (SSP) will increase from £96.35 per week to £99.35 per week.

Changes made to the SSP regime as a result of the COVID-19 pandemic will also come to an end on 24 March 2022. During the pandemic, SSP became payable from day one of any COVID-19 related absence, instead of from the fourth day of absence, which is the standard position. From 24 March 2022, SSP will revert to the standard position and be payable from the fourth day of absence regardless of the reason for the absence. SSP is also currently payable for workers who are required to self-isolate due to COVID-19 regardless of whether or not they have symptoms. From 24 March 2022, SSP will only be payable where the worker is ill.

In addition, the Coronavirus Statutory Sick Pay Rebate Scheme will close on 24 March 2022. The scheme was introduced as a temporary measure to enable small businesses with fewer than 250 employees to claim back up to two weeks of SSP for any COVID-19 related absence. Eligible employers will have until 24 March 2022 to submit claims under the scheme but will only be able to claim for absences up to 17 March 2022.

Unfair dismissal compensation

On 6 April 2022, the maximum compensatory award for unfair dismissal will increase from the lower of a year's pay and £89,493 to the lower of a year's pay and £93,878.

Statutory redundancy pay

On 6 April 2022, the maximum amount of a week's pay, for the purposes of calculating statutory redundancy pay (among other things) will increase from £544 to £571. The maximum statutory redundancy payment will therefore increase from £16,320 to £17,130 for redundancies taking effect on or after 6 April 2022.

Health and social care levy

On 6 April 2022, the new health and social care levy will be introduced across the UK to help fund reforms to the NHS and care sector. The tax will begin as an increase of 1.25 percent in both employer and employee National Insurance Contributions ("NICs") from 6 April 2022 until 5 April 2023. Employers should ensure their internal or external payroll will reflect the increase from 6 April 2022. HMRC is also encouraging employers to include a note on payslips saying "1.15% uplift in NICs, funds NHS, health & social care" for employees who have to pay the increased contribution between 6 April 2022 and 5 April 2023. From 2023, the levy will become a separate tax on earnings, calculated in the same way as NICs and will need to be reported as a new item through the payroll.

Watch this space

Disability workforce reporting 

In December 2021, the Government launched a consultation on disability workforce reporting. The consultation seeks views on the possibility of introducing a mandatory requirement for employers with 250 or more employees to report on the proportion of employees in their workforce who identify as disabled. The consultation also considers if any other information could be reported alongside or instead of this, and whether there are alternatives to a mandatory reporting that would increase transparency and help improve the recruitment, retention and progression of disabled people in the workforce. The consultation closes on 25 March 2022 and a response is due to be published by 17 June 2022. Employment Update will report developments.

Our work

Since the last Employment Update, our work has included:

  • sucessfully settling a disability discrimination claim via judicial mediation

  • advising on the approach to a pan-European contract harmonisation exercise following a TUPE transfer, including coordinating with multiple overseas counsel

  • advising clients looking to enhance their paternity leave and shared parental leave offering

  • advising an asset management firm on a bullying and harassment investigation and associated disciplinary process

  • advising on an investigation into inappropriate messages sent on a work WhatsApp group and associated disciplinary action

  • advising on the employment issues associated with dual contracts for investment professionals working across a number of jurisdictions

  • advising a US client on the immigration considerations with its plans to set up a rolling secondment arrangement for US employees to gain experience in the UK

  • obtaining a strike out of an unfair dismissal and discrimination claim.
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