For understandable reasons, the Government made little progress in implementing its long-standing employment policy commitments in 2021. However, it was able catch up on some long-standing consultation responses in the middle of the year, when the COVID-related pressures were relatively light.
In June it responded to its 2019 consultation about the establishment of a single enforcement body to police core employment rights. This was a key recommendation of the Taylor Review and the Government has now confirmed it will be proceeding with the establishment of this new body. The necessary legislation will be one of the most important components of the long-promised Employment Bill.
A month later, the Government published its response to another long-standing consultation, this time about sexual harassment in the workplace. Among a number of procedural and technical changes, the stand-out proposal is the establishment of a new legal duty to prevent workplace harassment. The exact scope of this new duty is currently unclear, but whatever form it takes, it is likely to impose significant additional legal responsibilities on employers.
In September we saw responses to long-standing consultations on carers’ leave and tipping, but the most significant development was a new consultation on making flexible working the “default”. It is not certain exactly how this idea will translate into amendments to the current flexible working regulations, except to the extent of removing the six months’ qualifying period, which currently applies to the right to request.
Other important changes in the pipeline include:
- Extending redundancy protection for new mothers: proposals for strengthening the rights of pregnant women and new mothers returning from maternity leave were set out in a response to consultation in July 2019.
- Leave for neonatal care: new rights for parents of premature or sick babies were outlined in a response to consultation published in March 2020.
It is thought that most of the above elements will be brought together in an Employment Bill. First promised in the Queen’s speech in December 2019, 2022 could be the year in which it is finally published.
Arguably the most significant change to UK employment rights in 2021 came not from the Government, but from the judges of the Supreme Court. After a number of decisions in recent years about employment status which emphasised the need to focus on the precise contractual arrangements, we now have a decision in the long-running litigation about the status of Uber drivers which takes a more radical approach.
The legal documents which governed the relationship between Uber and the drivers and customers using its app were exceptionally thorough and complex. However, the Supreme Court made it clear that these alone could not determine the employment status of the drivers. When assessing whether the drivers fell within the legal definition of worker, it said that the courts should always bear in mind the purpose of the legislation. Given that in this case its primary purpose was to protect individuals who were at risk of exploitation in the labour market, it could not be right to allow organisations to determine in their written documentation how the relationship should be characterised.
While the legal documentation could not be ignored, the employment tribunal had been entitled to regard as decisive the degree of control exercised by Uber over its drivers, and their limited ability to dictate the terms on which their services were delivered. The Supreme Court therefore upheld the tribunal’s decision that the Uber drivers were workers, a decision which had already been endorsed by the Employment Appeal Tribunal and the Court of Appeal.
The Supreme Court has certainly signalled a new approach in Uber, but that does not mean that uncertainty over the status of individuals engaged by organisations is at an end. A few months after the decision was published, we had a decision from the Court of Appeal about the status of Deliveroo riders. That litigation had taken a different route, and partly for that reason, the riders were unable to overturn the decision of the Central Arbitration Committee (upheld by the High Court) that they were not workers for collective bargaining purposes. The key difference in Deliveroo proved to be the right of substitution its riders enjoyed, underlining the point that Uber signals a change of approach, rather than guaranteeing uniform decisions across the board.
There have been many calls for the Government to simplify the law on employment status, most recently in the Taylor Review of 2017. That is not a simple task, and it is no accident that it has been the most neglected of all Matthew Taylor’s key recommendations. For the time being, we will have to make do with a clear message from the Supreme Court that tribunals should focus on the underlying purpose of the legislation they are interpreting. While this will bring some degree of certainty, it can be no substitute for a thorough review of the UK’s particularly complicated three tier system of employment rights. This comprises employees, workers and people in business on their own account, all with different degrees of employment protection.
2021 proved to be the year when hybrid working emerged as a distinct phenomenon, prompted by COVID-related restrictions being turned on and off for a second successive year. Arguably, the publication of dedicated ACAS guidance in July marked the point at which it finally came of age.
Hybrid working is often billed as the best of both worlds, where workers can combine the convenience of home working for part of the week with the sociability of an office for the rest of the time. But recent experience has shown that it is far from straightforward to get it right.
For a start, almost all businesses have many employees who cannot do their job without being on site. In addition, employers have to navigate a number of legal dilemmas when seeking to establish a hybrid working pattern on a formal basis, rather than as a temporary reaction to the exceptional circumstances of the pandemic.
In our experience, questions organisations need to address include:
- Should the hybrid arrangements be discretionary or contractual?
- To what extent should employers dictate the arrangements, and how much freedom should staff be given to choose the working patterns that suit them best?
- How can the risks of discrimination in the way the arrangements are implemented be mitigated?
In addition to these new issues, hybrid working needs to be fitted into the established legal framework regulating flexible working. The scope of the flexible working regulations may be widened in the future, but even under the current regime (where there is a six-month qualifying period to benefit from these rights) employers are likely to face a flood of flexible working requests in response to the introduction of a hybrid working policy, particularly if it seeks to impose constraints on the flexibilities that workers have enjoyed during the pandemic.
Decisions from the Employment Appeal Tribunal in 2021 have reiterated that changing an agreed working pattern is likely to involve the imposition of a “policy, criterion or practice”. So, hybrid working arrangements imposed by an employer may result in indirect discrimination if they put members of a protected group at a particular disadvantage. It is also clear that employment tribunals are entitled to assume that working arrangements which make it more difficult to care for dependent children will have a disproportionate impact on women. They will therefore need to be justified as a “proportionate means of achieving a legitimate aim”. The same is likely to be true of working arrangements which impact on the ability to care for adult dependents.
How exactly to get hybrid working “right” is beyond the scope of this briefing, but the importance of doing so cannot be overstated.
COVID may have accelerated the emergence of hybrid working, but that is by no means the only impact it has had on the employment relationship. The most obvious change has been the renewed emphasis on health and safety, particularly in working environments where it was far less prominent prior to the pandemic. Employers in all settings have become accustomed to conducting and reviewing risk assessments, not only to follow Government guidance, but to reassure their workforce that all reasonable measures have been taken to mitigate the spread of the virus.
Employers have also become acutely aware that remote working, while eliminating the risks of workplace transmission, carries its own health risks. That has led to an increased focus on mental wellbeing, and the need to explore innovative ways of supporting the mental health of homeworkers against the background of a global pandemic which has placed unique pressures on all workers and their families.
The introduction to the 2021 CIPD report on health and wellbeing (published last April) points out: “It shouldn’t have taken a global pandemic to push people’s health and wellbeing to the top of the corporate agenda as a critical business continuity issue.” One of the long-term legacies of the pandemic is likely to be that these issues will remain key priorities for employers even after the threat from the virus has receded.
However, it is probably the more immediate responses to the pandemic in terms of testing and vaccination that have raised the most difficult legal questions over the past year. The current law is ill adapted to provide definitive answers to whether employers are legally permitted to make submitting to testing or vaccination a condition of employment. That was one reason why the Government decided to legislate to make vaccination a condition of working in care homes (subject to limited exceptions) with effect from 11 November 2021. Similar provisions are being introduced for front-line workers in the health and wider care sector from April 2022.
While some employers have already made vaccination a condition of continued employment for some specific roles, or at least a requirement for new joiners, others have placed more emphasis on encouragement rather than compulsion. We are aware of some cases where cash incentives are being considered to encourage vaccination uptake, though for reasons of fairness these would normally have to be extended to previously vaccinated staff. Whatever the approach, the launch of the booster programme in the UK from autumn 2021 reminds us that getting vaccinated against COVID may become an annual routine.
Last but not least, the Coronavirus Job Retention Scheme, which ended on 30 September, is worth a mention in this context. It is hard to believe that the Scheme, which was such an important feature of 2020 and 2021, will no longer be with us as we move into 2022. While it has undoubtedly given rise to some additional litigation – much of which is still in the pipeline – it seems that, unlike the other responses to the pandemic, it will not leave a long-term legacy.
EU freedom of movement ended on 31 December 2020, marking one of the most significant changes to the UK’s immigration system for several decades. From 1 January 2021, the new points-based immigration system has applied to EU as well as non-EU nationals. The new system has introduced significant changes to the UK’s work, business, study and visit routes, creating both challenges and opportunities for employers.
Skilled Worker visa
The new Skilled Worker visa has created more flexibility for employers when sponsoring workers for visas due to the broadening of roles eligible for sponsorship and the introduction of tradeable points. The tradeable points mean that migrants can obtain the necessary points to qualify through salary, age, filling a shortage occupation role, and holding a PhD.
A number of changes have been made to the Skilled Worker route during the course of the 2021. Some have reduced the administrative burden for sponsors (for example, streamlining the documents sponsoring employers are required to retain where roles have been advertised), or been relatively minor (for example, tweaks to the rules relating to salary requirements, delayed start dates, and changes to the Shortage Occupation List). However, in a significant change for the higher education sector, the requirement to obtain Academic Technology Approval Scheme (ATAS) clearance has been extended to staff working in certain research areas, as well as students.
Temporary Worker and Graduate routes
The Temporary Worker route for certain short-term activities and work has seen a number of changes. From 1 January 2022 the T5 Youth Mobility category was expanded to include nationals of Iceland and India, albeit with additional requirements applying to Indian nationals. It seems likely that further bilateral immigration arrangements will be implemented in the months ahead as the Government seeks to strike trade deals in the new post-Brexit landscape.
On 1 July 2021 the Graduate route was introduced. This is an unsponsored immigration route which permits international students in the Student / Tier 4 category to undertake full-time employment in the UK, at any skill level, upon completion of their studies for two years if they have completed an eligible Bachelor's or Master's degree in the UK, or three years if they have completed a PhD or other eligible doctoral qualification. The route is designed to help the UK remain competitive in the international student market. Employers will benefit from being able to employ new graduates without incurring the costs and administration associated with sponsorship for a Skilled Worker visa, with applicants able to switch into Skilled Worker during the period of their Graduate route leave.
COVID-19
The pandemic resulted in the implementation of a number of temporary concessions, including in relation to employer right to work checks (the ability to conduct ‘adjusted’ checks on a remote basis has been extended to 5 April 2022 and there is no requirement to conduct retrospective face to face checks), more flexibility for switching visa categories, and in relation application processes.
Changes on the horizon
The UK’s immigration is continually evolving, and a number of changes are on the horizon for 2022.
- The Home Office has recently updated its employer right to work checks guidance confirming that from 6 April 2022 employers will no longer be able to carry out a manual right to work check on individuals who hold a biometric residence permit, biometric residence card or a frontier worker permit. Online right to work checks must be conducted on all biometric card holders from 6 April 2022.
- In the 2021 Autumn Budget the Chancellor of the Exchequer announced details of a number of changes expected to be introduced in the spring of 2022. These include a non-sponsored Scale-up visa route (to allow individuals with a ‘high skilled’ job offer from a qualifying UK-based scale-up business to come to the UK to work), the digitisation of the UK border, and the introduction of a ‘Global Talent Network’ to proactively source talented people in ‘key’ science and technology sectors.
- A new Global Talent visa is also expected to be introduced in the spring of 2022. This should help to address significant challenges that many international businesses currently face in bringing staff to the UK. The Global Talent visa is likely to bring together and revise a number of existing routes including the Intra-Company routes, the T5 International Agreement route (which relates to arrangements implementing the UK's trade commitments in respect of contractual service suppliers and independent professionals), and the arrangements for employees of an overseas business assigned to the UK to establish a branch or subsidiary (known as the Representative of an Overseas Business Route). It is also anticipated the route will include provisions to accommodate import and export-related secondments. These scenarios are currently included in the Visitor route but in many cases have not proved adequate for internationally mobile staff. Further details are expected to be announced in early 2022.
- A new sponsor management system portal is due to be rolled out from 2022 to replace the existing clunky system. This should help to improve the user experience for sponsoring employers
The equal pay litigation which has been running for many years in the supermarket sector produced two important rulings in 2021. The first one, published by the Supreme Court in March, marked the end of preliminary skirmishing between Asda and around 35,000 of its female supermarket workers. They have been seeking to establish the right to compare their pay with that of their predominantly male colleagues working at Asda distribution centres. Since they work at different establishments, under the Equality Act they needed to show that “common” terms and conditions applied.
The interpretation of this test has become surprisingly complicated in recent years, but the Supreme Court was in no mood for making this a difficult barrier for complainants to surmount. The Court emphasised that this test was only intended to apply where there were primarily geographical reasons for the differences in pay. The fact that in this case the comparators’ terms were determined by collective agreement rather than directly with the workforce (as was the case with the claimants) did not preclude a finding that the common terms test was satisfied in this case.
A few months later, in equal pay litigation involving Tesco, the European Court of Justice made a similarly robust ruling on the equivalent test under EU law. This time the employment tribunal had made a reference to the ECJ seeking guidance on the circumstances in which cross-establishment comparisons were permitted in equal value claims. The answer came back that the “common source” test – ie a requirement that there was a single entity ultimately responsible for setting the pay of both the claimants and the comparators – applied to all kinds of equal pay claims, including equal value claims. It followed that where, as in this case, there was one employer which was ultimately responsible for setting terms and conditions in both establishments, cross-establishment comparisons could be made. Even though this ruling came after the UK had left the single market, it is thought that it remains binding on our domestic courts thanks to transitional provisions in the UK/EU Trade and Cooperation Agreement.
Read together, these rulings have given the green light for the substantive litigation to begin against Asda and Tesco. Towards the end of the year, they were followed by the employment tribunal in claims against Morrisons and Safeways, to allow these claims to proceed to the substantive stage. An appeal against this latest tribunal ruling is still possible, but the big picture is that it is now much harder for respondents to take preliminary points on comparators with a view knocking out claims at the preliminary stage. That applies not only to the current crop of supermarket claims, but to future claims where there is a degree of location-based occupational segregation.
Disability continues to be the most complex strand of our discrimination law. That is not only because of the legal complexity of the test for establishing disability, but because of the enormous variety of medical conditions which tribunals need to understand when applying it.
In 2021 we reached a legal landmark when addressing a medical condition which affects millions of women in the UK workforce, but is still often misunderstood: the menopause. In a case involving a social worker employed by Leicester City Council, the Employment Appeal Tribunal has confirmed that the effect of typical menopausal symptoms could amount to a disability. In each case this will be a matter for the employment tribunal to assess. However, the first ever ruling from the EAT on this topic will encourage tribunals to make a careful assessment of any menopausal symptoms the claimant is experiencing and how she is affected by them, where these are relevant to a claim for disability discrimination.
In the case of some disabilities – for example hearing impairments – the provision of auxiliary aids often forms an important component of the adjustments a claimant is seeking. In another important decision from last year, the EAT has emphasised that this element of the adjustments duty is often overlooked. In this case, a claimant with dyspraxia claimed that he was disadvantaged by having to submit a job application online. While not pre-judging the merits of his claim, the EAT suggested that it would have been better if the tribunal had analysed the claim as a request for an auxiliary aid (ie an alternative way of submitting an application form) rather than looking at adjustments to the application of a provision, criterion or practice (ie that all job applications had to be made on-line). It also emphasised that the requirement to provide an auxiliary aid extends to an auxiliary service – for example by providing a member of staff who could help the claimant submit his application in a different way.
Our choice for the third key disability case of 2021 is an employment tribunal decision about indirect discrimination. Even though it is not binding on other tribunals, it is of significance because it is the first time that a claim for indirect associative discrimination in relation to disability has to our knowledge been upheld at any level. The claimant said that the imposition of new, less flexible, working arrangements was indirectly discriminatory because it made it more difficult for her to care for her disabled mother. Although she was not herself disabled, she successfully argued that she – and other carers like her – were put a particular disadvantage by reason of their association with the disabled people they were caring for. It is too early to say whether this principle will be endorsed by the EAT, but it certainly represents a new way for employees to challenge the imposition of working patterns which interfere with their ability to care for disabled adult dependents.
Legacy DC Schemes
The introduction of automatic enrolment in 2012 has resulted in an increased number of defined contribution (DC) trust-based legacy schemes. Such schemes require a great deal of time and resource to make sure they are run efficiently and in accordance with the strict legislative governance requirements.
In order to remove the ‘burden’ of such arrangements, it is possible to wind them up and secure the benefits under them in other arrangements (subject to compliance with legal requirements). One such option is to transfer the assets to a Master Trust arrangement. Over the last few years there has been a rapid move from single trust-based schemes to Master Trusts.
A Master Trust is a multi-employer occupational scheme where each employer has its own division within the Master Trust arrangement. There are a number of benefits associated with Master Trust pension provision such as competitive pricing, use of technology to help members save more effectively, along with the strict governance requirements as a result of having to be authorised as a Master Trust.
If an employer is looking to harmonise automatic enrolment pension provision (see below), a Master Trust is an option to consider.
Harmonisation of automatic enrolment pension provision
As a result of previous TUPE transfers or corporate transactions, employers may be faced with having to administer a number of different automatic enrolment pension arrangements with varying rates of employer contribution rates across the workforce. For some employers it may be desirable to harmonise pension provision as much as possible.
As part of a harmonisation exercise, it is important that existing pension provision is first reviewed to determine whether the pension arrangements remain fit for purpose and appropriate for the workforce, particularly having regard to any pension provision that is the result of a historic TUPE transfer, or whether it is desirable to move to a different arrangement with a different pension provider.
Consideration will need to be given to whether consultation under pensions legislation is required in respect of any change in pensions arrangements and/or contribution rates and whether employees have a contractual right to specific pension provision that will need to be varied before any change to pension arrangements can be made. Employment law advice will also be required.
Pension Dashboards
Pensions dashboards are digital interfaces that will enable people to see all their pension savings online and in on place, ultimately enabling them to make better decisions about retirement. The need for dashboards has been brought about by the increased number of savers in pensions arrangements as a result of the automatic enrolment requirements, and the fact that individuals often build up multiple pension pots as they move between different employers during their working life.
It is anticipated that voluntary onboarding and testing of the dashboard service will begin in 2022, with the service being made available from 2023. Pension schemes will be required to provide specific information through the dashboard service, and it is likely that employers may be required to provide support to enable relevant information to be uploaded to the dashboard.
Two important decisions emerged in 2021 which redefined the scope of workplace protection for union activities. In June the Employment Appeal Tribunal in Mercer v Alternative Future Group ruled on the law preventing employers from penalising workers for participating in trade union activities. This was followed by a judgment from the Supreme Court in Kostal v Dunkley, which looked at the other side of the coin: the ability of employers to offer inducements to union members to by-pass collective bargaining.
Mercer was concerned with the interpretation of section of the 146 Trade Union and Labour Relations Act 1992, which protects workers from being subjected to any “detriment” by their employer in order prevent or deter them from taking part in the “activities” of an independent trade union “at an appropriate time” or penalising them for doing so. For these purposes detriment does not include dismissal.
Prior to this decision, it was thought that the inclusion of the words “at an appropriate time” precluded industrial action from being a protected activity. However, the EAT re-examined the old case law in the light of its obligation under the Human Rights Act to interpret this legislation compatibly with the claimants’ rights under Article 11 of the European Human Rights Convention (freedom of association). Looking at the wording of section 146 through that lens, it decided that decided that trade union activities in section 146 must be read as extending to industrial action. There was, however, no suggestion that not paying workers while they are on strike would count as a detriment for these purposes. The Court of Appeal is due to hear the employer’s appeal against this ruling early in 2022.
The litigation between Kostal Limited and a group of workers represented by the trade union Unite centred on the interpretation of section 145B of the same Act. This section gives employees who are members of an independent union the right not to be offered “inducements” aimed at securing the result that the workers' terms of employment “will not (or will no longer) be determined by collective agreement negotiated by or on behalf of the union”. The sanction for beaching this provision is significant: a protective award which is currently £4341 per claimant for each infringing offer.
It was well established that an offer of financial inducements in order to persuade union members permanently to surrender their rights to have their terms and conditions determined by collective bargaining would fall within this definition. However, this litigation was about the effect of an offer in relation to a particular pay round, with no intention of by-passing collective bargaining on a permanent basis. The majority of the Supreme Court decided that such offers would also infringe section 145B, if the offer was made before the collective bargaining process had been exhausted but confirmed that it was permissible to make such offers after that point.
The combined impact of these two decisions (assuming Mercer is upheld on appeal) will be to tilt the balance in favour of the unions where employers are either trying to force the pace in negotiation about pay and conditions or seeking to dissuade workers from taking industrial action in the event of a dispute.
Neither decision has any impact on the complex regime applying to dismissals for taking part in industrial action which is set out later in the same Act. As things stand, in certain tightly defined circumstances, employers are still able to dismiss employees for participating in industrial action without triggering a claim for unfair dismissal. There is therefore now a degree of inconsistency in the way our legislation regulates penalising workers for striking by action short of dismissal (which is not permitted in any circumstances) and applying the sanction of dismissal (which depends in part on whether the action is official or unofficial).
The expression of certain religious or philosophical beliefs by workers can conflict with an employer’s interests. This may be due to the need to protect the rights and freedoms of other staff or to defend other legitimate business objectives. 2021 has provided three very different illustrations of how our courts should approach reconciling these competing interests.
Last year ended with a significant media debate about the degree to which the expression of gender critical views could infringe the rights of transgender people, and the role of employers in balancing the rights of workers on both sides of the debate. A practical illustration is provided by the well-known case involving Maya Forstater. She had expressed views to the effect that “biological sex is real, important, immutable and not to be conflated with gender identity”. Some of her colleagues at work complained that they found her comments offensive, and, following an investigation, her visiting fellowship was not renewed.
In June 2021 the Employment Appeal Tribunal reversed the decision of the employment tribunal on the preliminary issue and ruled that Ms Forstater’s views on gender amounted to a protected belief under the Equality Act. That means that the claim can now proceed to a full hearing, due to take place in March 2022. The key issue is likely to be whether her fellowship was not renewed because of her beliefs themselves, or because of the way they were manifested. Based on previous case law, the former would be unlawful direct discrimination. The latter is potentially indirect discrimination, which can be justified if the employer can show that whatever restrictions they had imposed on the freedom of staff generally to express their personal views were a “proportionate means of achieving a legitimate aim”.
Earlier in 2021 the Court of Appeal delivered its verdict about a different “clash of rights”. This time the focus was on the impact of the views of Richard Page, a Christian with strongly held religious beliefs about homosexuality. He was both a lay magistrate and a non-executive director of an NHS Trust. Both roles were terminated following remarks he made about same-sex adoption in various media interviews, which he said were expressions of his religious beliefs.
Mr Page brought two separate claims in the employment tribunal which he lost. His further appeals to the EAT and to the Court of Appeal were all dismissed.
The Court of Appeal ended its judgment in the NHS appeal with some more general observations about the limits of free speech for the people holding senior positions in public sector organisations. It reiterated that Christians should not be expected to remain silent about their beliefs simply because they may be unpopular – or even offensive - to some people. However, it said that there were circumstances where it was right to expect Christians (and others) who work for an institution to accept some limitations on how they expressed their beliefs in public on “matters of particular sensitivity”. That was particularly so if they held a “high profile” position. It seems likely that a similar approach would be appropriate for senior positions in the private sector, though that would depend on the precise context.
Dress codes is another area where rights can clash – in this case between an employer seeking to impose a consistent dress code across its workforce, and a worker wishing to adopt the dress requirements of their particular religion. Last year we had the second major ruling from the European Court of Justice on religious dress codes. As with its first decision in 2017, it was asked to rule on two separate references about the wearing of Islamic headscarves.
Last time round the ECJ was concerned with cases from France and Belgium, while this time it grappled with two separate references from Germany. Although the final ruling on the proportionality of imposing a “neutral” dress code rests with the referring court, it is now clear that the ECJ will not only expect strict neutrality in the way the dress code is applied but will require courts across the EU to scrutinise carefully the employer’s reasons for imposing these restrictions. Following this latest ruling, one of the employers involved, which was able demonstrate sound educational reasons for imposing its dress code on workers in its child-care centres, is likely to fare better than the other, which wished to project a particular image to customers in its shops.
ECJ decisions published after the end of 2020 are no longer legally binding in the UK. However, they remain “persuasive”, particularly in cases like this, which in effect give further worked examples of the principles that had already been established before the UK left the EU, are which are now incorporated into our domestic law.
Overall, last year’s rulings in these three pieces of litigation have emphasised the need for employment tribunals to adopt a balanced approach when scrutinising apparently neutral employment policies which have a disparate impact of members of a particular religion, or on those sharing a particular philosophical belief. That means there are no easy answers for employers when deciding whether the imposition of a particular policy could be successfully challenged in the courts on the grounds that it is indirectly discriminatory.