Key employment and business immigration developments for employers.
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The Government has announced that the Coronavirus Job Retention Scheme (CJRS) is being extended until 31 March 2021. The CJRS, which was due to close on 31 October 2020, had already been extended to cover the four-week national lockdown and will now continue until 31 March 2021. The scheme has also been made more generous than it was in October 2020.
The CJRS provides a Government-funded wage subsidy for employers who place staff on full or partial furlough (paid leave). Under the CJRS, employees on furlough must receive at least 80% of their regular wages for hours not worked up to a full-time maximum of £2,500 per month.
Following the Government's announcements on the extension:
Under the CJRS, employers can claim the Government wage subsidy before or after employees have been paid but the subsidy must be paid in full to employees.
In the light of the CJRS extension, both the previously announced Job Support Scheme and the Job Retention Bonus will be shelved. The Chancellor has said that an alternative job retention incentive will be considered at an appropriate time.
For more detail on the CJRS extension see our full Q&A briefing here.
The Government's new points-based immigration system was widely expected to take effect from 1 January 2021, following the end of the Brexit transition period. However, the Government has now announced that the new system will open for applications on 1 December 2020.
Under the new regime, the key new work visas are the Skilled Worker and the Intra-Company Transfer (ICT) routes. These will apply to both EEA and non-EEA nationals and will replace the existing employer-sponsored visas for non-EEA nationals from 9am on 1 December 2020. This means:
EEA and Swiss nationals who arrive in the UK by 31 December 2020 are covered by the EU settlement scheme which is already open. Applicants can apply now for settled or pre-settled status and must do so by 30 June 2021.
Employers who do not already hold an immigration sponsor licence should apply now, as this will be required to sponsor both EEA and non-EEA nationals under the new regime. Those with a sponsor licence should undertake a review to ensure the licence is fully up-to-date and also covers all linked entities across Europe, which will be necessary to facilitate transfers from those linked entities in future.
The new points-based immigration system will cover both non-EEA and EEA nationals going forward with new routes replacing the existing Tier 2 (General) and Tier 2 (ICT) visa routes from 1 December 2020.
The existing Tier 2 (General) visa category will be replaced by a new Skilled Worker visa category, which will cover individuals coming to the UK with a job offer from an approved sponsor employer. Employers will need to be paying a minimum salary of at least £26,500 or the "going rate" for the particular role set by the Home Office. Employers familiar with the Tier 2 (General) route will note the following helpful changes:
The ICT route allows companies to transfer staff from linked overseas offices to work in the UK temporarily. This route will remain under the new regime but with some key changes:
Please see our briefing Post-Brexit immigration – the new points-based system for more details of the new regime.
This case highlights the potential danger of getting the invitation to a disciplinary meeting wrong. The employee was a teacher with a long, unblemished record. Following a tip off, police raided his home and found a computer with indecent images of children on it. He told the school about this but denied any responsibility for the images. He was charged but ultimately not prosecuted. The employer invited him to a disciplinary hearing for misconduct related to the images on his computer. It was unable to obtain any information from the police about the nature or seriousness of the images or where they had come from. The disciplinary chair concluded there was insufficient evidence to say the employee was responsible for downloading the images but decided to dismiss the employee because of the reputational risk to the school. The employee claimed unfair dismissal.
The employee's claim was initially rejected but, on appeal, the Employment Appeal Tribunal (EAT) ruled that the dismissal was unfair. The EAT said that the letter inviting the employee to the disciplinary hearing only mentioned misconduct and said nothing about reputational risk as a potential issue – the employee therefore had no opportunity to respond to this in any material way. The EAT said that the employee could not have been fairly dismissed on the basis of misconduct in circumstances where the employer had found insufficient evidence that misconduct had occurred. The EAT also doubted whether there was enough of a reputational risk here to justify dismissal, given there had been a decision not to prosecute the employee, and therefore no chance of a conviction, and there was no information available about the nature or seriousness of the images.
The decision in this case will be surprising to many but it highlights the importance of being clear in a disciplinary invite letter about the case against the employee. The letter must set out all of the allegations against the employee and the possible bases for any disciplinary action. These must also be put to the employee at the disciplinary hearing, so the employee has the chance to respond. The case is also a reminder that simply being charged with a criminal offence will not always be sufficient to justify a dismissal based on reputational risk. The employer must be clear about how the charge or the surrounding circumstances give rise to potential reputational harm.
The employee in this case was a Christian and worked at a school. Someone outside the school complained about a post on the employee's personal Facebook page, which encouraged others to sign a petition against teaching in schools about same-sex marriage and gender fluidity. A further post by the employee was uncovered which referred to gender fluidity as a "perverted vision". The employee was dismissed for gross misconduct, which included breaching the school's policy on inappropriate use of social media. She claimed she had been discriminated against and harassed because of her religious beliefs.
The school argued that the employee's beliefs – that gender cannot be fluid and that people cannot change their biological sex – were not protected beliefs because they were incompatible with human dignity and conflicted with the fundamental rights of trans people. The Employment Tribunal rejected this argument and ruled that the employee's beliefs were protected beliefs. However, the employee had not been discriminated against or harassed because of those beliefs. Rather, she had been dismissed because her posts might reasonably lead others to conclude that she was homophobic and transphobic, which had the potential to negatively impact on pupils, parents, staff and the wider community.
This case is one of a number of recent cases on the delicate balance between religious beliefs and sexual orientation and gender identity issues. It is also likely to be appealed. However, it confirms that there is a distinction between an employee's beliefs, on the one hand, and how or where the employee expresses them, on the other. Taking disciplinary action against an employee because of their beliefs will almost certainly amount to discrimination and harassment. However, taking action due to the manner of expressing those beliefs is unlikely to be discriminatory where views are expressed in a forceful or offensive manner, or in such a way as to pose a risk to the employer's reputation. It was relevant in this case that the employee's Facebook friends included parents at the school, and the Tribunal also noted that the employee had gone beyond simply stating her beliefs in a factual way.
The Government has introduced a cap on public sector exit payments which took effect from 4 November 2020. Under the cap, payments by a public sector body in respect of an employee's termination of employment must not exceed £95,000 in total for that employee. In terms of what is covered by the cap:
Ministers have the power to relax the cap in certain situations and must do so in relation to payments made as a result of TUPE, as well as payments made to settle or avoid whistleblowing or discrimination claims. There are other situations where Ministers may relax the cap on a discretionary basis.
In March 2016, the Senior Managers and Certification Regime (SMCR) replaced the approved persons regime for employees in banks, building societies and other financial services organisations jointly regulated by the FCA and PCA. An equivalent regime was brought in for large insurers. The SMCR was extended to all insurers in December 2018 and to all FCA regulated firms on 9 December 2019.
There are transitional rules for employees who were approved under the approved persons regime and will become certified individuals under the SMCR. Firms originally had until 9 December 2020 to certify these employees as fit and proper under the SMCR, but this deadline is being extended to 31 March 2021 in light of the pandemic. The date on which the FCA conduct rules come into force for staff who are not senior managers, certification staff or board directors is also being extended from 9 December 2020 to 31 March 2021, as it the date by which relevant employees must have received training on the conduct rules. Despite the delay, the FCA encourages firms to meet the original deadline of 9 December 2020 wherever possible.
Changes to the tax rules for those who engage consultants and contractors are due to come into force in April 2021, a year later than expected due to the COVID-19 pandemic. The legislation introducing the changes has now been made, with a view to the rules coming into force on 6 April 2021. The so-called "off payroll rules" were introduced in the public sector in April 2017 and are being extended to the private sector from April 2021.
These rules are designed to ensure that workers who provide their services like employees are taxed like employees, even if they provide their services through a personal service company. From 6 April 2021, large and medium-sized businesses in the private sector will be caught by the rules. Such businesses will have to decide whether without the personal service company the worker would be regarded as an employee for tax purposes. If so, if the business (or the body responsible for paying the personal service company) must account for tax and national insurance contributions on payments to the personal services company.
Businesses in scope will need to write to all workers who supply services via a personal service company to explain whether the business believes the new rules apply or not, and the reasons for this determination. Businesses will also need to respond to challenges on such "status determination statements" within 45 days.
Those in scope should therefore review their arrangements for engaging consultants, contractors and other workers, and implement systems and processes to ensure compliance with the new rules ahead of 6 April 2021. We have been working with a number of employers on implementation projects and have produced a 'toolkit' of template documents to assist with this. Please speak to your usual Employment team contact for more information.
Since the last Employment Update, our work has included: