Employment legal update #61 | December 2022

Our Employment & HR team brings the second instalment of December's review of new legislation, guidance and case law.

News: 

The Insolvency Service, which announced in April that it had begun formal criminal and civil investigations into the mass redundancies at P&O Ferries without notice or consultation, has confirmed that there will be no criminal action against P&O Ferries. The investigation concluded that there was no realistic prospect of conviction in respect of those redundancies. However, the civil investigation into the actions of P&O Ferries remains ongoing.

The new national minimum and living wage rates, which will come into force on 1 April 2023, have now been announced. There is a considerable increase in all of them as follows: –

• Age 23 or over (NLW rate): £10.42 (up 9.7% from £9.50)
• Age 21 to 22: £10.18 (up 10.9% from £9.18)
• Age 18 to 20: £7.49 (up 9.7% from £6.83)
• Age 16 to 17: £5.28 (up 9.7% from £4.81)
• Apprentice rate: £5.28 (up 9.7% from £4.81).
• Accommodation offset amount: £9.10 (up 4.6% from £8.70)

The Retained EU Law (Revocation and Reform) Bill 2022-23 was recently introduced to the House of Commons. This Bill allows for significant changes to the current status and operation of retained EU law, including through amendments to the European Union (Withdrawal) Act 2018 (EUWA). It includes provisions to:

• Revoke EU-derived subordinate legislation and retained direct EU legislation at the end of 2023; but
• includes a power to preserve specific provisions, and to extend the revocation date of specific, or specific types of, legislation to 23 June 2026 at the latest.
• Repeal section 4 of the EUWA at the end of 2023. However, the Bill also includes powers to reproduce the effect of anything which is or was retained EU law by virtue of section 4 of the EUWA.
• Replace some of the provisions in section 5 of the EUWA with new provisions so that, after the end of 2023, the principle of the supremacy of EU law is not part of domestic law and domestic enactments will have priority over retained direct EU legislation.
• Remove from UK law the effects of general principles of EU law from the end of 2023. However, the Bill includes powers to restate legislation to produce an effect equivalent to retained general principles of EU law.
• Rename retained EU law "assimilated law" after the end of 2023.

If enacted in its current form, the Retained EU Law (Revocation and Reform) Bill could radically change employment law as we know it and remove long accepted rights and protections. The original version of the Bill had the provision to automatically revoke subordinate legislation which derives from the EU unless specific steps were taken to preserve it. If this is enacted it will affect the Working Time Regulations, the Agency Workers Regulations and TUPE at the very least. The Bill also gives the government power to restate secondary retained (now to be called “assimilated”) EU law as domestic law or to replace it completely. It is currently not known what the government will do.

These provisions seem to indicate that on the one hand they can remove the effect of all EU law but with the other hand, re-enact it in a different way…

A HR Consultancy has undertaken research into equality, diversity and inclusion initiatives of businesses - and found the following: –

• 96% of businesses will undertake diversity, equity and inclusion (DEI) initiatives over the next 12 months.
• 84% of businesses have a strategy in place or plan to introduce one.
• Nonetheless, funding for these initiatives is felt to be insufficient and only 38% of businesses have a budget, or plan to allocate one; only 36% of those businesses consider that the budget already allocated is sufficient.
• Mental health and wellbeing issues were the priority focus for 90% of respondents.
• The priorities are mental health (78%) and race or ethnicity (72%).
• For 60% of respondents, disability, gender and LGBTQ+ issues were the focus.
• 89% of businesses plan to embed ED&I into their recruitment processes.

At the Conservative Party Conference, the Secretary of State for Digital, Culture, Media and Sport (DCMS), announced the government's plan to replace the UK GDPR with a bespoke British data protection system. Her speech indicated that the bureaucratic nature of the UK GDPR limits the potential of UK businesses, leading to excessive caution amongst staff in the handling of data, in particular for smaller organisations. Whether this will happen now with the change in government is another matter of course – and with the issues which bringing in GDPR bought, it is to be rather hoped it doesn’t.

HMRC has published “Guidelines for Compliance: help with PAYE Settlement Agreement” calculations. In November 2021, as part of its review of large business taxation, HMRC said it would produce guidelines for compliance and improve existing guidance. HMRC intends this as an additional tool for taxpayers in areas with a relatively high risk of non-compliance, the intention being that adhering to them will result in a lower risk tax position. The guidance is directed at employers entering into a PAYE settlement agreement and sets out:

• HMRC's preferred method for submitting calculations .
• Ways to help employers to reduce the risk of inaccuracies and errors when calculating income tax and class 1B NICs on benefits in kind and expenses accounted for under settlement agreements.
• Detailed suggestions and reminders for calculations (i.e. regarding the different tax rates in Scotland and Wales. There are also examples of how to calculate NIC contributions values, and guidance on NICs timings (including the interaction of class 1, 1A and 1B NICs) and record retention.
• Contact details for more information about the points covered in the guidance.

These guidelines are of particular importance to large businesses, as they represent (in addition to other published guidance) HMRC's "known position" for the purpose of rules on uncertain tax treatment.

The government has announced a £6.4 million investment to help employers support employees with disabilities and health conditions. Part of this investment will fund a new online service that will provide information and advice about how to support and manage employees with disabilities or health conditions, whether they are in or out of work. The service will be free and can be accessed by any employer although it is aimed at smaller businesses which may lack HR support or access to occupational health services. It is hoped this service will help small businesses develop more inclusive workforces.

HMRC has reported a 70% increase in whistleblowing reports in the past two years, mainly down to reports of abuse of the furlough scheme. In the 12 months leading up to 1 April 2022, HMRC received 15,000 reports from whistleblowers, compared to 8,900 reports received the year before the pandemic. 38% were sufficiently serious for HMRC to take further action.

The Government has introduced the Transport Strikes (Minimum Service Levels) Bill, which will make provision for minimum service levels in specified transport services during periods of strike action. If it becomes law, the Bill will amend S.219 of the Trade Union and Labour Relations (Consolidation) Act 1992 so that trade unions will lose their immunity from liability for industrial action if they fail to take reasonable steps to ensure that the persons who are required to work in order to ensure the minimum service level do not take part in the strike. However, no date has yet been set for a second reading.

More family friendly legislation in the offing - the government has thrown its support behind a private members Bill entitled the Protection from Redundancy (Pregnancy and Family Leave) Bill. The Bill passed its second reading with government support in October. If enacted, it will amend the Employment Rights Act to allow the Secretary of State to make regulations providing protection against redundancy "during or after" an individual takes maternity, adoption, or shared parental leave. It will also add a new provision to the Employment Rights Act allowing regulations to be made regarding redundancy "during, or after" a "protected period of pregnancy". (The Maternity and Parental Leave Regulations already exist providing for the protected period during pregnancy for women at risk of redundancy.) The explanatory notes to the Bill suggest that, by extending protection after a protected period of pregnancy, a woman who has miscarried before informing her employer of her pregnancy will benefit from the redundancy protection. The proposal to extend the protection to apply from the date on which an employee notifies her employer of her pregnancy, to 6 months after her return from maternity leave, was mooted by the BEIS in January 2019. It has also been suggested that this should apply to i.e. adoption and shared parental leave. The government said them that it would look at this legislation when parliamentary time allowed. It appears now to be coming onto the radar.