Welcome to the Travers Smith Winter Newsletter 2019!
Here we round up key developments in the employment law world, and in our team, in 2019, and take a look at changes coming up in 2020.
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2019 round up
Workplace culture remained firmly in the spotlight throughout 2019. In the wake of the #MeToo movement, employers are continuing to see historic sexual harassment incidents surfacing. We regularly advise on clients' internal investigations and in 2019 we also carried out a significant number of investigations.
In addition, regulators are increasingly focussing on sexual harassment and cultural considerations more widely. The FCA places great emphasis on the importance of having a healthy and open culture. Also, changes to the Corporate Governance Code require listed companies to have effective whistleblowing procedures and take measures to improve diversity and culture.
According to a report by the Women and Equalities Select Committee, part of the historic problem is the use of settlement agreements with confidentiality provisions (often referred to as NDAs), which in some cases have led to a failure by the employer to investigate complaints and can help to perpetuate a culture in which victims feel unable to speak up.
The Government is taking various measures to address these issues. It has announced new legislation setting out the limits on confidentiality clauses in settlement agreements and in employment contracts. Separately, the Equality and Human Rights Commission has published guidance on the use of confidentiality provisions.
There has also been a consultation on measures to tackle sexual harassment in the workplace, as a result of which there will be a new statutory code of practice on preventing sexual harassment, and there may also be a new requirement for employers to publish sexual harassment policies. Separately, we have assisted several clients who are considering introducing policies around relationships at work, typically requiring early disclosure of relationships which could lead to a conflict of interest.
The focus on workplace culture highlights the importance of having effective and meaningful whistleblowing or "speak up" policies and procedures. Employers across all sectors are reviewing their policies and using internal messaging campaigns, external whistleblowing hotlines, and business wide training programmes to raise awareness and show their commitment to the "speak up" process. We have worked with a number of clients to update their policies and deliver training to managers and staff, and we expect this to be a hot topic continuing throughout 2020.
Employee engagement was also high on the agenda this year. Companies with at least 250 UK employees are now required to detail their employee engagement, information and consultation initiatives in their annual report, and listed companies must implement, and report on, employee engagement at board level. The requirements apply to financial years beginning on or after 1 January this year. Some companies have already published reports voluntarily, but we will see the first mandatory reports in 2020.
Employers are increasingly being expected to be more transparent about their pay and policies. This year saw the second wave of gender pay gap reporting, and a Government consultation on ethnicity pay gap reporting, which some employers have chosen to do voluntarily already. Quoted companies (with at least 250 employees) are required to publish the pay ratio of the CEO pay compared with average workforce pay in different quartiles (for financial years beginning on or after 1 January this year).
Employers (with at least 250 employees) may be required to publish their family leave and flexible working policies, under proposals in a Government consultation this autumn on improving support for working families.
On the family friendly theme, the Court of Appeal this summer decided that enhancing maternity pay but not shared parental pay is not discriminatory. The case is going to the Supreme Court so this may change but, irrespective of the legal position, we have seen a number of employers this year deciding to enhance shared parental pay (not having done so initially) to improve the take up by fathers and demonstrate support for working parents.
The steady flow of employment status cases continued this year, including the Uber drivers' victory in the Court of Appeal (now on appeal to the Supreme Court). Many employers are reviewing their contractor arrangements in preparation for the new "off-payroll" rules coming in next year. We have been advising clients on the status of their contractors and associated documentation, and expect to see an uptick in these projects at the beginning of 2020, in the run up to 6 April.
2019 also saw interesting cases on a variety of topics including: whistleblowing; working time and record keeping; changing terms and collective bargaining; post termination restrictions; suspension for misconduct; recording disciplinary hearings; social media and discrimination; and third-party harassment.
Brexit was delayed twice in 2019 and is now scheduled to take place on 31 January 2020. EU nationals already in the country by that date will be able to apply to stay under the EU Settlement Scheme. They would have until 30 June 2021 to apply under the scheme, as long as the current withdrawal agreement is passed by Parliament (and if not they would have to apply under the scheme by 31 December 2020). We have been assisting a number of clients with their Brexit and immigration planning, including advising on the implications for recruitment, assisting with sponsor licence applications ahead of the post-Brexit regime and running Brexit "surgeries" for their EU employees.
- 31 January - the UK is scheduled to leave the EU
- 6 April - all workers will have the right to a written statement of terms on the first day of employment, and additional terms will need to be provided including in relation to leave and benefits. Also holiday pay for workers with variable hours or pay will be calculated by averaging over the previous year (rather than 12 weeks)
- 6 April - termination payments above £30,000 will become subject to employer national insurance contributions (as well as income tax)
- 6 April - the "off payroll" rules will require employers to assess whether their contractors who work through a personal services companies are covered by IR35, and tax payments accordingly
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