What is on your HR agenda for the year? As COVID-19 restrictions ease, how will the world of work continue to evolve? In 2022, we expect developments in old favourite topics such as holiday pay and collective bargaining, while issues such as health & safety dismissals, menopause, gender identity and flexible working take on the HR centre stage.
Here, Gowling WLG's Employment, Labour & Equalities team brings you our baker's dozen pick of the top 2022 expected employment law developments.
Health & Safety dismissals
It has been reported that employment tribunal claims citing health and safety concerns were up three-fold last year. Section 100 of the Employment Rights Act 1996 provides employees with protection from dismissal for exercising their rights to leave the workplace and take steps to protect themselves where they reasonably believe there is serious and imminent danger to health and safety.
The tribunal judgments to date suggest that to succeed in a claim under s100 due to fears about COVID-19, the employee will need to show that the reason for refusing to return to the workplace was a belief that a serious and imminent danger was posed due to something directly linked to their working conditions (or possibly in travelling to and from the workplace in some cases), not simply circumstances of serious and imminent danger in society at large.
A number of COVID-19 tribunal decisions are seeking permission to appeal. Keep an eye out for one of the early cases, Rodgers v Leeds Laser Cutting Ltd, which is to be heard by the Employment Appeal Tribunal (EAT) on 12 April. We await the EAT guidance in this and no doubt other pending appeals.
Right to work checks
During the pandemic, the Home Office introduced adjusted right to work checks, which have enabled employers to carry out their right to work checking responsibilities without having to handle physical documents.
Since 30 March 2020, the adjusted process has allowed right to work checks to be carried out over video calls, with job applicants and existing workers able to send scanned documents or a photo of their documents to employers via email or a mobile app, rather than sending the originals. The adjusted process runs until 5 April 2022.
The adjusted process has been well-received, but the downside is an increased risk of individuals being able to use fraudulent documents to secure employment. The Home Office has now created a new digital right to work checking solution. From 6 April 2022, employers will be permitted to use certified providers to undertake digital identity checks. This will be available for use in relation to British and Irish citizens who hold valid passports (or Irish passport cards) who are currently outside the scope of the Home Office's existing online service (which is largely limited to EEA nationals with settled status).
Employers will need to provide appropriate training and guidance to their staff on using the new online system.
The current legal requirements to self-isolate for those who test positive for COVID-19 and for unvaccinated close contacts of positive cases are due to end when the Health Protection (Coronavirus, Restrictions) (Self-isolation) (England) Regulations 2020 automatically expire on 24 March 2022 as will the related criminal offences for breach of these regulations. The expiry of the regulations will also mean that payment of statutory sick pay for those self-isolating will also end.
More widely, the Coronavirus Act 2020 contains a sunset clause and many of its provisions and the powers that have enabled the Government's response to the COVID-19 pandemic are due to expire on 24 March 2022. Section 90 of the CVA 2020 does provide powers for this expiry date to be altered. On 9 December 2021, the Public Administration and Constitutional Affairs Committee launched an inquiry into the renewal and extension of legislative processes under the Coronavirus Act 2020. To date, there is no indication that the sunset clause date will be extended.
Holiday leave and pay
Calculating holiday pay should be straight forward, but often has proved to be anything but, providing a seemly endless stream of legal challenges. This year we are expecting two important judgments in cases heard at the end of 2021.
- First, we await the Supreme Court judgment in The Harpur Trust v Brazel (UNISON intervening) on whether holiday entitlement for term-time only workers (part-year workers) is subject to pro rata reduction. The Court of Appeal held no. While the pro rata principle applies to part-time workers who work throughout the year but for only part of the week, the Court of Appeal held it does not apply to part-year workers who work full time weeks but for only part of the year. Term time only workers are entitled to 5.6 weeks' holiday based on their weekly work pattern during the term, giving them a disproportionately higher level of holiday entitlement than full-time or part-time workers who work throughout the whole year. We wait to see if the Supreme Court agrees.
- Second, we await the Court of Appeal judgment in Smith v Pimlico Plumbers Ltd on whether the EAT was correct to hold that the Court of Justice of the European Union's 2017 ruling in King v Sash Window Workshop Ltd does not mean that a worker has a right to carry over payment for annual leave in circumstances where the worker took annual leave but was not paid for it. Although King established that a worker is entitled to carry over, without limit, any annual leave untaken because the employer refuses to remunerate it, the EAT held that the CJEU's judgment does not apply to leave that was in fact taken, albeit unpaid.
The Court of Appeal will give its judgment in two appeals this year with highly significant implications for employers facing industrial action. It has long been common practice by some employers to withdraw discretionary benefits from employees who take part in industrial action. Following two EAT judgments last year, employers adopting practices of this kind are now at risk of being held to have acted unlawfully. Instead, they may only safely deduct from an employee's pay an amount that is commensurate to the period for which they were taking industrial action.
Departing from previous case law, in June 2021 the EAT in Mercer v Alternative Future Group Ltd held that workers are protected from detriment short of dismissal for taking part in industrial action and in a bit of judicial legislative drafting added words to the relevant legislation to achieve this result. In November 2021, the EAT in Morais v Ryanair DAC confirmed the position as held in Mercer.
The Court of Appeal recently heard the appeal in Mercer on 27 January 2022, with the Ryanair appeal on hold pending its outcome. An important appeal for employers with a unionised workforce.
On 20 January 2022, the Court of Appeal considered in Angard Staffing Solutions Ltd and anor v Kocur and anor a number of issues relating to the application of the Agency Workers Regulations (AWR). Just what is the extent of equal treatment under the AWR? In particular, relating to:
- Opportunities for overtime - can direct hires have first refusal?
- Extent of the right to be informed by the hirer of any relevant vacancies - must they be considered on the same terms as directly-recruited employees?
- Extent of the meaning of 'equal treatment' in relation to "the duration of working time". Must they be offered the same shift lengths as directly-recruited employees?
- Is there a requirement for equality of treatment in relation to the content of working time?
The EAT answered yes to question one and no to questions two to four. Should the Court of Appeal overturn the EAT, this will impact the cost and management time when engaging temporary agency staff.
Organisations procuring labour services, such as freelancers and consultants, need to understand whether the IR35 ("off-payroll") rules apply. Last April's changes, placing responsibility on medium and large private sector organisations for determining the deemed employment status of contractors it engages via an intermediary, has brought this into focus.
The test for deemed employment status for tax purposes can be confusing. While employment status for employment law purposes has three options, employment status for tax purposes is a binary question: either employed or self-employed. Hopefully, some much needed guidance on the determination of employment status for IR35 purposes will be forthcoming. The Court of Appeal will be considering the significance of the economic dependence factor in HMRC v Atholl House Productions Ltd in February.
Permanent Health Insurance (PHI)
Permanent health insurance (PHI) is often a valuable part of an employee benefits package. The contractual status of PHI schemes and the relationship between the terms of the employment contract and the terms of the insurance policy can cause confusion. This year sees two significant appeals regarding PHI.
- Awaiting listing before the Court of Appeal this year is a case highlighting the importance of checking the status of contractual benefits underwritten by third parties, particularly in relation to employees inherited following a TUPE transfer. Last year, in Amdocs Systems Group v Langton, the EAT held that if there was any ambiguity or uncertainty as to whether an employer's obligation to provide benefits was limited by reference to the specific terms of its insurance cover, any such ambiguity would be resolved against the employer and in favour of the employee. This may result in the employer having to self-fund a benefit no longer covered by an insurance policy.
- Employers have an obligation to provide "access" to benefits in a non-discriminatory way. However, an exemption in the Equality Act 2010 allows employers to stop offering PHI and other group-risk insured benefits to employees at the greater of age 65 or the state pension age. The policy decision sitting behind the exemption is to avoid employers paying disproportionately large insurance premiums in respect of older employees. This has been a vexed area since its introduction. Last year, a tribunal rejected claims for both direct and indirect age discrimination on the basis that the employer did not extend an employee's PHI cover beyond age 65 to his state pension age of 66, as the increase in his state pension age occurred after he was "in claim" under the PHI policy. In June, the EAT in Pelter v Buro Four Project Services Ltd will consider, whether the tribunal was correct to find that the time for deciding whether a PHI scheme is discriminatory is while the employee is earning the protection, not when they are receiving payments.
Last year, the EAT in the high profile judgment of Forstater v CGD Europe and ors (Index on Censorship and Equality and Human Rights Commission - intervening) held that gender-critical beliefs, including a belief that sex is immutable and should not be conflated with gender identity, are protected under the Equality Act 2010. This judgment is on a preliminary question of whether a gender critical belief may amount to a philosophical belief and confirms that both those holding a gender identity belief and those holding a gender critical belief are protected under the law.
What last year's judgment does not mean, is that those with gender critical beliefs can indiscriminately and gratuitously refer to trans persons in terms other than they would wish. Such conduct could, depending on the circumstances, amount to harassment or discrimination. It is the manifestation of a belief that may, depending on the circumstances, be restricted.
This year, we expect to receive the tribunal judgment on the substantive issue as to whether Ms Forstater was discriminated against by CGD Europe when her contract was not renewed after expressing gender critical views in a social media debate. In April and May a claim raising similar issues will be heard by a tribunal in Bailey v Stonewall Equality Ltd and ors.
At appellate level, in March the EAT will consider the issue of 'manifestation' of a belief in two cases:
- Mackereth v The Department for Work and Pensions and anor - the tribunal found that a Christian doctor engaged to carry out health assessments for the DWP was not discriminated against on the grounds of religion or belief when he was dismissed for refusing to address transgender patients by their chosen pronoun (28 March).
- Higgs v Farmor's School - the tribunal found that a Christian employee was not discriminated against due to her gender critical beliefs, as her dismissal was not due to her holding the beliefs but the inflammatory language used in social media posts (1 March).
At present, there is no specific protection for the menopause under the Equality Act 2010. To seek legal protection against dismissal or detriment, women experiencing menopause need to rely on disability, sex or age discrimination as routes to a claim. Often menopausal women do not feel that they have adequate legal protection due to the lack of clarity in the legislation. On 19 January 2022 the Women and Equalities Select Committee (WESC) heard further evidence, as part of its ongoing inquiry into menopause and the workplace, with consideration as to whether the menopause should be made a legally protected characteristic.
While the outcome of the WESC report is awaited, there are a growing number of tribunal claims based on poor treatment relating to the menopause. Last year, in Rooney v Leicester City Council, the EAT held that a tribunal erred in holding that an employee suffering from menopausal symptoms was not disabled under the Equality Act 2010, and in dismissing her disability and sex discrimination, harassment and victimisation claims. A fresh tribunal is due to rehear the claim in February.
As a result of the COVID-19 pandemic, flexible working arrangements have been the norm for many. Keep an eye out for the Response to the September 2021 Government Consultation: Making Flexible Working the Default. This consultation sets out five proposals for reshaping the existing right to request a flexible working regulatory framework so that it better supports the objective of making flexible working the default. Under the consultation, which closed on 1 December 2021, the Government is considering taking forward proposals to:
- Make the right to request flexible working a day one right (currently there is a 26-week service requirement).
- Review whether the eight business reasons for refusing a request all remain valid.
- Require the employer to suggest alternatives if they intend to refuse a request, for example an alternative part-time working pattern or a time limited change being agreed.
- Change the administrative process underpinning the right to request flexible working, namely:
- introducing the ability to make more than 1 request every 12 months, and
- shortening the existing employer's 3-month decision-making period.
- Ensuring better use of requests for a temporary arrangement.
In addition to the above, the Flexible Working Taskforce has been asked to consider how to move on from the immediate response to COVID-19 and make the most of the recent lessons learnt, initially focusing on the "location" aspect of flexible working through "hybrid working".
Keep an eye out for new statutory duties in relation to the prevention of harassment. Back in July 2021 the Government confirmed that it planned to:
- Introduce a duty on employers to prevent sexual harassment. The new duty will be based on employers being required to take "all reasonable steps" to prevent harassment, and for an incident to have taken place before an individual can make a claim. A statutory Code of Practice will be developed to "help employers understand whether they have taken 2all reasonable steps" to prevent harassment".
- Re-introduce protection from third-party harassment to include an "all reasonable steps" defence.
- Consider extending the time limit for claims under the Equality Act 2010 from three to six months to apply to all claims under the Equality Act, including harassment.
As for when changes will be introduced, so far the Government simply states "when parliamentary time allows".
On 23 September 2021, the Government confirmed that it will introduce a new day one right for employees with caring responsibilities for a dependant with long-term care needs to take up to one working week of unpaid Carer's Leave. The draft Regulations are expected to be published sometime this year. As regards timeframe for implementation, the Government simply states "when parliamentary time allows".
Where will you pick to focus next?
With this array of developments on the horizon, there is no doubt a lot to consider over the coming months to keep pace with case law and statutory changes. We continue to monitor the forthcoming judgments and statutory reforms highlighted and will share more insight as these evolve.
In the meantime, if you are interested in discussing any questions prompted by the topics raised here, please contact Jane Fielding or Connie Cliff.