Key updates:

  • Increase in statutory payments
  • IR35 update
  • Increase in Tribunal awards
  • Furlough update
  • Vaccination – can employers demand a jab for a job?
  • Gender pay gap reporting
  • Technology in the workplace
  • Case law update

National Living Wage and National Minimum Wage

As of 1 April 2021 the National Living Wage (NLW) will increase to £8.91 per hour and will be extended to 23 and 24 year olds (previously only available to 25 years old and above).

All other applicable hourly rates will also be increasing:

23 and over £8.91
21-22 £8.36
18-20 £4.62
Apprentice £4.30

More information and previous rates can be found here

From 4 April 2021 the weekly rate of maternity, paternity, adoption, shared parental and parental bereavement pay increases to £151.97.

Statutory Sick Pay (SSP) also increases to £96.35

IR35

IR35 refers to the Government’s legislation bought in to prevent tax avoidance for off-payroll workers through the creation of an intermediary between the end user/client and the individual/contractor.

As of 6 April 2021 private sector companies will be responsible for working out the employment status of the person providing their services via an intermediate (often a Personal Service Company (PSC) or an agency). This includes some charities and third sector organisations.

This means assessing whether the contractor is genuinely self-employed or if they would be deemed to be employed if there was no intermediary. This has applied to the public sector since 2017 but is now being extended into the private sector. Where IR35 applies the fee-payer will be responsible for operating PAYE to make the appropriate tax and NIC deductions.

This does not apply to small private sector companies, who are exempt. However to be designated as a small company for these purposes you must have:

  • an annual turnover of not more that £10.2 million;
  • a balance sheet total of not more that £5.1 million;
  • no more than 50 employees.

The client is now required to provide a determination of the employment status as well as the reason behind that status. An individual has the ability to disagree regarding a determination made over their working status.

This will require medium and large private companies to consider their agreements with consultants and their potential tax liabilities. HMRC can look back 4 or 6 years from the end of the relevant tax year in their determination of tax payments.

The Government Guidance is here. If you have doubts regarding your responsibilities under IR35 legal advice should be sought.

Tribunal awards

The awards available from the Employment Tribunal will increase as of 6 April 2021. The limit for a compensatory award for unfair dismissal will rise from £88,519 to £89,493. This cap will be limited to the lower of 52 weeks’ pay or £89,493. There are exceptions where this cap does not apply, such as claims for discrimination, whistleblowing or raising health and safety issues, among others.

The limit on a weeks’ pay will increase from £538 to £544 for the purposes of calculating statutory redundancy payments and the basic award for unfair dismissal.

The awards for an injury to feelings for acts of discrimination (‘Vento bands’), will also increase as follows:

  • lower band of £900 to £9,100 (less serious cases);
  • middle band of £9,100 to £27,400 (cases that do not merit an award in the upper band)
  • upper band of £27,400 to £45,600 (the most serious cases)

With the most exceptional cases capable of exceeding £45,600.

Coronavirus Job Retention Scheme and “furlough”

The scheme is to be extended until 30 September 2021, as announced in the Spring Budget on 3 March 2021. The Government will contribute 80% to wages (subject to the cap of £2,500 per month) until the end of June 2021, employers remain responsible for NICs and employer pension contributions. In July employers will contribute 10%, and in August and September they will contribute 20%. Employers can continue to choose to top up employees’ wages above the 80% total and £2,500 cap at their own expense. The full policy paper documenting the changes and current rates / contributions can be found here.

Vaccination – can employers demand a jab for a job?

The Government does not compel anyone under its current legislation to have the Covid vaccination.

However employers have a duty of care to their staff and third parties under legislation such as the Health and Safety at Work Act 1974 and under common law. As such employers may consider this duty requires vaccinations by staff, and deem it to be a ‘reasonable instruction’ to insist on this for an employee to continue work, or as a requirement to offer a job. Nevertheless serious consideration should be given prior to insisting on a jab for a job as this may be legitimately challenged in a number of ways.

The Equality Act 2010 (the Act) covers workers and job applicants against discrimination based upon nine ‘protected characteristics’. This protects workers against discrimination by its employer as well as from other employees. As such employers require to be mindful of potential vaccination related discrimination or harassment by colleagues.

For example, an employee may have a medical condition which means they are unable to have the vaccination. In these circumstances an employer may also be required to make reasonable adjustments for this employee. A pregnant employee may also refuse to have a vaccine for reasons related to her pregnancy. A refusal to have the vaccine may also be related to an employee’s religion or belief. Dismissing an employee or subjecting them to a ‘detriment’ (some detrimental action short of dismissal) for not being vaccinated could lead to claims of discrimination or harassment under the Act.

Employers, such as those in the social care sector, may still consider requiring a vaccine amounts to a reasonable instruction in order to protect the vulnerable people in their care. Failure to follow a reasonable instruction by a worker can lead to a fair dismissal, most likely as a dismissal for ‘some other substantial reason’ (SOSR). However the employer would require to follow a fair procedure, involving warnings of the potential consequences of non-compliance i.e. dismissal, and would need to consider alternatives to dismissal, such as reassigning to alternative work where vulnerable service users are not at risk. Each situation will be fact specific and will require to be considered carefully. Further, dismissal of an individual with a protected characteristic will not automatically be unfair if it can be justified as a proportionate means of achieving a legitimate aim (such as protecting vulnerable service users). However it will again require careful analysis of the specific facts of the case and it may be that whilst the aim of protecting vulnerable users was legitimate, dismissal was not a proportionate means of achieving that aim.

Acas guidance is that it’s best to support staff to get the vaccine without forcing them to. If an employer feels it’s important for staff to be vaccinated, they should talk together with staff or the organisation’s recognised trade union to discuss what steps to take.

Gender Pay Gap Reporting

The Equality and Human Rights Commission (EHRC) suspended gender pay gap reporting in 2020 however this has been reinstated for 2021. Whist the normal deadlines remain in place (30 March 2021 for public sector employers and 4 April 2021 for larger private employers and voluntary organisations) enforcement is suspended until 5 October 2021, providing a grace period for both public and private and voluntary organisations.

Technology and artificial intelligence in the workplace

The AI Law Consultancy has produced a report for the Trades Union Congress (TUC) on the legal implications of artificial intelligence (AI) in the workplace. The report is a comprehensive examination of how new technologies are impacting the world of work. It considers the myriad of issues this raises, such as the scope for bias in AI systems, issues around the transparency of decision making and concerns over privacy and data protection. It also sets out the current legal framework covering these technologies along with recommendations for action and reform.

For anyone impacted by AI in the workplace (employers utilising automated decision making in hiring or the monitoring of staff while working from home, as well as workers who have concerns over these same issues) this will be a resource to draw on as these practices become more common place in our evolving and increasing technologically advanced workplaces.

The report can be found here

Brief case law update

Uber BV and others v Aslam and Others

The Supreme Court has recently ruled that Uber drivers are entitled to be treated as workers as opposed to self-employed independent contractors. The court looked behind the contractual documentation and examined the reality of the relationship between the parties, finding that Uber exerted significant control over its drivers including setting fares, dictating contractual terms and controlling the way in which drivers delivered their services. As such Uber could not rely upon written agreements that referred to the drivers as ‘independent contractors’. Drivers were deemed to be working from when they switched on their apps and were available for work until these were switched off again.

The designation of worker entitles divers to national minimum wage, to receive annual leave and other benefits such as auto-enrolment into the pension scheme. The case has been referred back to the Employment Tribunal to determine compensation.

This case has significant ramifications for those working in the ‘gig economy’. Edwards Duthie Shamash have produced a blog on this judgment here. Judgment available here

Smith v Pimlico Plumbers

Another judgment in the ongoing fight over holiday pay. In the previous case of King v Sash Window, it was established that where a worker was prevented from taking holiday, because his employer refused to pay holiday pay (perhaps due to a dispute over worker status), this was carried over each year. This applied to 4 weeks’ EU holiday (not the full 5.6 UK holiday) and claims could be backdated to 1996 when the Working Time Directive came into force. As such this had potentially significant ramifications for employers where an individual previously thought to be self-employed was established as a worker and brought a claim for backdated holiday pay.

In the current case of Smith v Pimlico Plumbers it was established that Mr Smith was a worker. It was thereafter ruled that if the worker in fact took this holiday, albeit he was not paid for it by virtue of not being an employee, any claim for holiday pay must be brought within the normal Employment Tribunal time limits (3 months minus a day). As such Mr Smith’s claim was ruled to be out of time. This was distinguished from Mr King’s case as Mr Smith did in fact take his holidays.

As a result of this judgment (and the previous judgment of Bear Scotland Ltd v. Fulton (No.1)), claims cannot be brought ‘out of time’ for previous year’s unpaid holiday, thereby limiting the backdated holiday pay that can be sought and any employers potential liability.

Judgment available here

Royal Mencap Society v Tomlinson-Blake

This case concerned the meaning of the sleep-in provisions in the National Minimum Wage Regulations. The Supreme Court has ruled that workers who are permitted to sleep during a shift are only entitled to be paid national minimum wage for time awake for the purpose of working, and not for time spent sleeping or on stand-by.

This effects workers in the care industry who are traditionally called upon to be ‘on-call’ and available on the premises for work throughout the night, even if sleeping. This ruling would have had a significant impact on the financial liabilities of the care sector had it been held that care workers were entitled to national minimum wage for the whole period of being on call. There are widespread calls to reform the care sector to bring pay in line with the value of the job to society, particularly in light of the demands on carers and medical staff highlighted by the covid pandemic. This was echoed by Royal Mencap in its press statement .

Judgment available here

Asda Stores Ltd v Brierley and others

The Supreme Court has ruled that the Claimants working in ASDA retail (predominantly woman) can compare themselves to their colleagues working in ADSA distribution (predominantly men) for the purposes of an equal pay claim. This is significant as it confirms that employees can compare themselves even where they are situated in different sites and this is not a method of avoiding comparison of colleague’s terms.

The next stage of the litigation is for the Claimants to argue that they were doing work of equal value with their comparators (retail and distribution). This claim has been brought on behalf of 44,000 individuals and will be watched closely by many in the retail sector.

Judgment available here

This update is not a substitute for legal advice. If you would like to discuss any of the issues raised in this update, or require legal advice on an employment matter, please get in touch with Colin Davidson, Head of Employment Law at Edwards Duthie Shamash

(cds@edwardsduthieshamash.co.uk)