As we settle in to 2020, we are looking ahead to some changes in employment law which are due to come into effect this year, high profile cases to be heard, as well as some proposals set out by the government.
Changes to the Law
There are a number of important changes expected to take effect in 2020, including:
- Extension of rights to an employment contract: at the moment, employees must be provided with a statement of employment particulars – essentially their employment contract – within two months of starting employment. This right is now being extended to ‘workers’ – those who are contracted to provide work but are not employees, such as casual or zero hours staff. The right is also becoming a ‘day one’ right, meaning all employees or workers who start work after 6th April 2020 must receive their written terms and conditions on the first day of employment. This means employers will have to have this planned and the document ready in advance. The changes also include the addition of some further terms which must be including within the written particulars, including details of any probationary period, any required training and details of any paid leave, including family related leave.
- Holiday pay reference period will change from 12 weeks to 52 weeks: where a worker has no fixed hours/pay, holiday pay is worked out with reference to average pay over the previous 12 week period. Following cases in recent years regarding inclusion of overtime and commission in holiday pay calculations, it was considered that using a 12 week period might cause inaccuracy because, for example, the worker had done significant overtime during that period resulting in an inflated payment of holiday pay. Therefore, from 6th April 2020 the reference period for calculating holiday pay will change to the previous 52 weeks, disregarding any weeks where the employee does not work or receives no pay.
- Introduction of Parental Bereavement Leave: the Parental Bereavement (Leave and Pay) Act 2018 is expected to come into force in 2020, although there is currently no fixed date. This will introduce a right to 2 weeks leave for parents who experience the death of a child under age 18 or a stillbirth after 24 weeks (in which circumstances the mother will also still have the right to maternity leave). There will be a right to payment for this leave at the statutory rate if the employee has more than 26 weeks service.
- Changes to IR35 for those employed through personal service companies – IR35 rules ensure that individuals engaged through an intermediary, such as a personal service company, but who would be employees if engaged by the client directly, pay income tax and national insurance contributions similar to those of employees. At the moment, the individual contractor has to make a self-assessment of whether the rules apply to them. The changes will mean that end user clients (those who engage the worker’s services) who are medium and large businesses are responsible for making the assessment as to whether the IR35 rules apply to individuals engaged by them through service companies. Where it is assessed that the IR35 rules do apply, the fee payer will become responsible for accounting for tax and national insurance (including employer’s national insurance contributions). The fee payer will be the person/business who pays the worker or their intermediary and in many cases will also be the client.
- Agency workers to have right to equal pay with directly engaged workers: From 6 April 2010, agency workers will have the right to pay parity with comparable permanent staff after 12 weeks’ continuous work in the same role with the same hirer.
- Review of statutory rates – it is expected that the usual review of statutory rates will take place, meaning there may be changes from April 2020 to the national minimum wage, tax thresholds and rates for statutory sick pay or pay for family related leave, although no intended changes have been announced at this stage.
Keep an eye on our future blogs for further details on these changes.
Cases to be heard
There are also a few cases due to be heard by the Supreme Court this year which could have important implications for employment law, including:
- Various Claimants v Morrisons: this is the case which decided that Morrisons was vicariously liable for a personal data breach carried out by one of its employees (see our blog on this). Morrisons have appealed to the Supreme Court – the outcome of this decision could have significant implications if the decision that Morrisons were liable is upheld. This case was actually heard by the Supreme Court in November 2019, so the judgement is anticipated this year.
- The Ali/Hextall cases on pay for shared parental leave and whether it is discriminatory to enhance maternity pay but not shared parental pay.
- Uber v Aslam and others – Uber have appealed the decision that its drivers are workers and therefore entitled to rights such as holiday pay. This could be a significant decision in the area of employment status, which has been at the fore in the past few years.
- Royal Mencap Society v Tomlinson – this case concerns whether time spent on “sleep in shifts”, where workers provide on call support but sleep through the majority of the shift, is working time and therefore whether the minimum wage applies to it. This relates particularly to the care sector and could have significant implications.
Further Government Proposals
Additionally, the Queen’s Speech in December 2019 featured details of legislation regarding employment law which the new government intends to introduce in the next Parliamentary session. Many of these were featured in the Taylor Review or as part of the government’s Good Work Plan and have been consulted upon in the last year. The proposals include:
- Introduction of a single enforcement body: a single enforcement agency in the employment sector to protect vulnerable workers, and to ensure that they can exercise their rights.
- Extension of redundancy protection for pregnant employees: Currently, if an employee on maternity leave is at risk of redundancy, they are entitled to be offered a suitable alternative role if there is one available. The government proposes to extend the period for which this protection applies from the moment an employee informs their employer of their pregnancy until six months following the end of their maternity leave.
- Leave for neonatal care: the government have indicated an intention to introduce a right to leave for parents of newborns who require neonatal care. In consultation it was proposed this would apply where neonatal care was required for two weeks or more, and would result in a week’s leave for each week the infant is in neonatal care. The leave would be added on to maternity/paternity leave and be subject to pay at the usual statutory rates for family related leave. However, it is not yet clear whether these plans will change if the proposal goes forward.
- Flexible working will be the default position. Included in the Conservative party manifesto was a pledge to encourage flexible working and make it the default position for employers unless there are good reasons not to. It is not yet clear what specific measures the government intends to introduce to achieve this.
- Workers will have the right to request a more predictable contract. Prior to the election, the government indicated that it would legislate to give casual workers on atypical contracts (such as zero hours contracts) the right to request a more predictable contract once they have completed 26 weeks of service with their employer, such as by seeking a contract for guaranteed hours.
- Tips to go to workers in full: the government announced plans to introduce legislation which would require employers to give all tips and service charges to workers in full, without deduction of admin fees, to be distributed on a totally transparent basis. This would be supplemented by a Statutory Code of Practice. Timescales for introduction of these plans are not yet known.
- Unpaid carers will be granted one week’s leave: This was included in the Conservative party manifesto, and indicates an intention to introduce a right to one week’s leave for unpaid carers: those with caring responsibilities for family or friends in their personal lives. It is not yet clear exactly what arrangements would apply in respect of this leave.
- National Strategy for Disabled People: the government intend to publish this strategy by the end of 2020, which will look to improve employment opportunities for disabled people, as well as looking at the benefit system, housing, education and transport. In 2019 it carried out a consultation on ill health in the workplace, which looked at various ideas including reform of statutory sick pay. The government have also noted intentions to introduce measures to encourage retention of disabled persons in the workplace. The disability employment gap is described as a key target for the government, who intend to have one million disabled people working by 2027.
It is not yet clear if or when many of these proposals will in fact be implemented.
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