Top 5 recent workplace developments - October 2022

This is our selection of recent developments which we think will impact on HR practice.

1. Brexit – Brexit Freedoms Bill

What might the Brexit Freedoms Bill mean for employment protections in the UK?

The Brexit Freedoms Bill - formally known as the Retained EU law (Revocation and Reform) Bill was published on 22 September 2022, with potentially significant consequences for UK employment law. As part of the Brexit arrangements, most EU law in force in the UK on 31 December 2020 was preserved as “EU retained law”.  

The Bill includes provisions which allow certain retained EU law to be saved (by being reinstated), replaced or scrapped altogether by 31 December 2023. Significantly, the Bill includes a clause which means that, at the end of 2023, what’s left of certain retained EU law will simply disappear. That is 15 months from now. Although this deadline can be extended to 23 June 2026 if the Government needs to extend the deadline in relation to specific laws. However, the Government will need to positively decide which laws this applies to, otherwise they will simply fall away.

It was never the UK Government’s intention to keep EU retained law on the statute books for ever; indeed Parliament already has the power to repeal EU based law. However, this Bill expedites that process and involves less parliamentary scrutiny. 

So how will the Bill affect UK employment law? The reality is we simply don’t know precisely. However, there are some relative certainties. For example, the Bill only relates to secondary legislation and not primary legislation such as Acts of Parliament. This means that it will not affect key statutes such as the Equality Act 2010 (discrimination and equal pay), the Employment Rights Act 1996 (unfair dismissal and redundancy rights) and TULRCA 1992 (trade union and collective redundancy consultation rights). It could, however, affect other key employment rules such as the Working Time Regulations 1998 (holiday rights, rest breaks and the 48-hour working week), TUPE 2006 (protection of employment on transfer of a business), Agency Workers Regulations 2010 and other discrimination-related regulations such as rules covering part-time workers and fixed-term employees. 

Practical point

Unfortunately, this Bill will only serve to create uncertainty for employers. The government has given little indication as to what employment laws it wishes to keep, replace or scrap. We can have a good stab at guessing what might change but nothing is certain since there are so many variables. The UK is due to have a General Election in 2024, which falls before the final extension date set out in the Bill, and a new government may have its own ideas for reform.  

The Bill has also yet to be scrutinised by Parliament and could well be watered down as a result. Finally, any significant reduction of employment rights which makes the UK more competitive than other EU member states could be in breach of its Trade and Cooperation Agreement with the EU. 

Retained EU Law (Revocation and Reform) Bill 

UK government to set its own laws for its own people as Brexit Freedoms Bill introduced 

2. IR35: off-payroll working rules

It was announced in the recent ‘mini-budget’ that the off-payroll reforms will be abolished from 6 April 2023.

The off-payroll working reforms introduced in 2017 in the public sector and 2021 in the private sector make public authorities and medium and large-sized businesses responsible for deciding if workers providing their services through intermediaries such as personal service companies (PSCs) would have been employees if they provided their services directly. If so, the organisation must deduct and pay tax and NICs as if they were employees.

In the recent mini-budget, the Chancellor announced the repeal of the 2017 and 2021 reforms with effect from 6 April 2023. These changes will mean that from 6 April 2023, contractors who provide their services via a PSC, and not the organisation, will once again be responsible for determining their own employment status and paying the appropriate amount of tax and NICs.

However, the background against which companies contract with individuals has altered so there won’t be a complete rewind to the 2016 position. This is because since the off-payroll working rules were brought in, new corporate criminal offences have been introduced. In particular, a company can now be guilty of failing to prevent the facilitation of tax evasion. These developments could mean that if a company suspects a contractor will not comply with its obligations under IR35, it could still be held responsible.

It is against this backdrop that businesses must consider their contracts with contractors going forward. Outside the contractual position, businesses should remain wary of obviously artificial situations, particularly where it is clear IR35 applies, and they have reason to suspect the contractor will not comply with the rules.

Practical point

The off-payroll working rules continue to apply until their proposed repeal next April so employers must continue to meet their obligations under the existing legislation. Equally, the changes to the rules will not absolve companies of historic (or on-going) non-compliance issues.

From 6 April 2023, employers should no longer need to carry out such extensive investigations into the status of their contractors. Nor will they be subject to the same requirements to deduct tax and NICs.

The usual tax indemnities should continue to be included in contracts with individuals. However, an indemnity will not protect the company against corporate criminal liability. Businesses may therefore also wish to consider including an undertaking that the contractor will comply with their obligations under IR35. 

3. Age discrimination – marginal age difference

The Employment Appeal Tribunal has ruled that age discrimination can arise where there is only a small difference in age between the person treated less favourably and their comparator.

Mr Kirk had the job title of EMEA Head of CB Energy, Managing Director at Citibank. At a meeting in 2017, he was told there would be a restructure and that Ms Olive, another managing director in his sector, would be appointed to the one remaining managing director role. During the meeting Mr Kirk’s line manager told him, “You are old and set in your ways”. At the time, he was 55 years old and Ms Olive was 51.

Mr Kirk was subsequently made redundant and brought claims for unfair dismissal, age discrimination and harassment. The employment tribunal concluded that he was dismissed because of age.

The EAT found that age discrimination can arise where there is only a small difference in age between the individuals involved. This is most likely to arise where an employer applies a “cut-off age” for a benefit. Where there isn’t a “cut-off age”, a small difference in age may mean it is less likely that the discriminatory treatment is because of age.

Practical point

In an age discrimination claim that does not rely on a “cut-off age”, if there is only a small difference between the age of the individuals involved, tribunals will be expected to scrutinise the claim to assess whether the treatment received by the claimant was because of age - even where, as in this case, there is overt evidence of blatantly discriminatory conduct.

The EAT noted that where there is a small difference between the age of the individuals concerned, their particular ages may be significant. So, the age difference might be more significant if the individuals are 18 and 20, than if there is the same age difference but they are aged over 40.

Citibank & Others v Niels Kirk

4. Disability discrimination: Long-Covid

An employment tribunal has ruled that an employee who caught COVID-19 two and a half weeks before her dismissal wasn’t disabled at the relevant time.

Mrs Quinn, who was employed as Head of People, tested positive for COVID-19 on or around 11 July 2021. She subsequently experienced fatigue, shortness of breath, pain and discomfort, headaches, and brain fog which affected her everyday life and disrupted her sleep. She struggled with shopping and driving and stopped socialising and exercising. On 26 July, she contacted her GP to arrange an appointment.  On 27 July, she was dismissed from her employment. She consulted with her GP on 2, 8 and 22 August, during which time she was deemed unfit to work due to ongoing symptomatic COVID-19.  On 12 September, she was deemed unfit to work due to post-COVID-19 syndrome and diagnosed with long-Covid.

Mrs Quinn brought a number of claims, including for disability discrimination.  An employment tribunal had to decide whether she was disabled at the time of her dismissal. Mrs Quinn relied on the impairment of long-Covid including having COVID-19 for longer than normal. She argued that COVID-19 and long-Covid are part of the same condition and, given that other women her age with no underlying health conditions recovered more quickly than her after two weeks, it could have been predicted that she would experience long-Covid.

The tribunal found that Mrs Quinn wasn’t disabled because:

• At the time of her dismissal, she didn’t have long-Covid. Indeed, she wasn’t diagnosed with long-Covid until over six weeks later.
• While the impairment of Covid-19 had a substantial adverse effect on her ability to carry out normal day-to-day activities, this effect had lasted only two and a half weeks at the time of her dismissal and wasn’t long-term.
• Given that the substantial majority of people who catch Covid-19 don’t develop long-Covid, it couldn’t be said that the risk of developing long-Covid "could well happen".

Practical point

This is a tribunal decision, so it will not be binding on other tribunals.

Earlier this year, another tribunal ruled that an employee with long-Covid symptoms was disabled under the Equality Act 2010 (see Top 5 recent workplace developments – July 2022). In that case, the employee had been absent from work with long-Covid for nine months at the time of his dismissal and the tribunal found that his condition was long-term, noting that his employer's view was that there was no date when a return to work seemed likely.

Mrs G Quinn v Sense Scotland

5. Unfair dismissal – breach of equality, diversity and inclusion policy

An employment tribunal has ruled that an employee was unfairly dismissed for being overheard making negative comments at the end of an online diversity and inclusion webinar on "white privilege".

Mr Isherwood worked as a conductor for West Midlands Trains for over ten years and was a senior conductor manager at the time of his dismissal.  He attended a diversity and inclusion (D&I) webinar which was hosted by East Midlands Trains Limited on "white privilege" while at home. At the end of the online session, Mr Isherwood forgot to disconnect and was inadvertently overheard by attendees having a conversation with his wife in which he used an expletive and commented that he had wanted to ask about "black privilege" in other countries such as Ghana. Following his dismissal for gross misconduct, he brought an unfair dismissal claim.

The tribunal found that his dismissal was unfair. It concluded that the employer had failed to consider the possibility that a lesser sanction, such as a warning, and engagement in further D&I training would have been a fairer outcome than dismissal.

Practical point

This is a tribunal decision, so it will not be binding on other tribunals. In another recent tribunal case, Bradbury v Sky In Home Services Ltd, an inclusion advocate was found to have committed race discrimination against a colleague who identifies as Latino by commenting that she must have suffered oppression because of her race and the colour of her skin. Although the tribunal accepted that the remarks were not made to deliberately cause harm, it found that she had been subjected to a "form of stereotyping".

Although these cases illustrate that issues can arise in the course of D&I training, it is important staff are given D&I training to ensure they are clear about the behaviours expected in the workplace. In addition, failing to provide this training puts employers at a disadvantage when faced with a discrimination claim. Employers can avoid potentially liability for acts of harassment committed by staff if they can show they took “reasonable steps” to prevent those acts – and a strong "reasonable steps" defence often involves employers showing that they have delivered effective and timely D&I training.

Mr S Isherwood v West Midlands Trains Limited