Employment legal update #68 | January 2024

1. Shortage occupation list

The Migration Advisory Committee has published its review of the shortage occupation list (SOL) which recommends its abolition of heavy reform. Recommendations include:

• Removing from the SOL occupations with a going pay rate above the general minimum salary threshold of £26,200
• Removing the 80% SOL going rate discount
• Changing the name of the SOL to the “Immigration Salary Discount List”
• Expanding the Youth Mobility Scheme to other countries to fill shortages in the labour market
• Uprating minimum salary thresholds in April 2024 to fully adopt the recommendations in the ONS Standard Occupation Classification (SOC) 2020
• Updating the Creative Worker (CW) route

2. Low Pay Commission’s recommendations

The Government has accepted the Low Pay Commission’s recommendations for the rates of the National Living Wage and the National Minimum Wage which will come into force from April 2024. With effect from 1 April 2024 the rates will increase as follows:

• The NLW will increase from £10.42 to £11.44 per hour. This applies to those aged 21 or over as the age limit is reducing (currently 23)
• The National minimum wage will increase for those aged 18-20 from £7.49 to £8.60 per hour
• The increase for those aged 16-17 and apprentices increases from £5.28 to £6.40 per hour

This will be the largest ever increase in cash terms and is driven by the strength of pay growth across the economy, which is forecast to continue into next year.

3. Monitoring workers

The Information Commissioner’s Office has published guidance on the monitoring of employees and workers entitled Employment practices and data protection − Monitoring workers. This follows a public consultation due to the increase in remote working and consequential increase in employers wanting to carry out checks on their workers. The guidance is intended to help employers comply with the UK General Data Protection Regulation and Data Protection Act 2018 to ensure that any monitoring carried out does not transgress the legislation. Monitoring can include tracking calls, messages and keystrokes, taking screenshots, webcam footage or audio recordings, or using specialist monitoring software to track activity.

Key points in the guidance include:

• Making workers aware of the nature, extent and reasons for monitoring.
• Having a clearly defined purpose and using the least intrusive means to achieve it.
• Having a lawful basis for processing workers’ personal data.
• Telling workers about any monitoring in a way that is easy to understand.
• Only keeping information relevant to the purpose.
• Carrying out a Data Protection Impact Assessment for any monitoring that is likely to result in a high risk to workers’ rights.

4. Electronic Travel Authorisation

Electronic Travel Authorisation (ETA) scheme applications are now open for Qatari nationals travelling to the UK from 15 November 2023. ETA applications are submitted online or via a new “UK ETA” app, with decisions expected within three working days unless further checks are required. Each applicant (including children) will need their own ETA. The fee is £10 each.

5. Immigration Order 2023

The draft Immigration (Health Charge) (Amendment) Order 2023 has been laid before Parliament. If adopted by both Houses of Parliament, this will increase the immigration health surcharge for most applications from £624 to £1,035 per person per year.

6. The Worker Protection Bill

The Worker Protection (Amendment of Equality Act 2010) Bill received Royal Assent on 26 October 2023, to become the Worker Protection (Amendment of Equality Act 2010) Act 2023. It will come into force exactly 1 year after receiving Royal Assent, so 26 October 2024. The Act amends the Equality Act 2010 as follows:

• Introduces a new duty on employers to take reasonable steps to prevent sexual harassment of their employees.
• Gives employment tribunals the power to increase compensation by up to 25% where an employer is found to have breached the new duty to prevent sexual harassment.

This new duty will sit alongside employees’ existing protections from sexual harassment in the Equality Act.

7. Rehabilitation of Offenders Act 1974

Reforms to the Rehabilitation of Offenders Act 1974 came into force on 28 October 2023. They reduce the period of time that individuals with criminal convictions are legally required to declare them to employers after serving their sentence.

The Police, Crime, Sentencing and Courts Act 2022 (Commencement No.8) Regulations 2023 brought S.193 of the Police, Crime, Sentencing and Courts Act 2022 into force on 28 October 2023. S.193 amends S.5 of the Rehabilitation of Offenders Act 1974 to reduce the periods of time after which certain offences become ‘spent’ and need no longer be disclosed to an employer.

Previously, some offenders were required to disclose their sentences for the rest of their lives. Now, custodial sentences of four years or less, and of more than four years for some less serious crimes, will become ‘spent’ after a period of rehabilitation of up to seven years after the sentence has been served, provided that no further offence is committed in that period. If an individual reoffends during the rehabilitation period, they will have to disclose both their original and subsequent offences to employers for the duration of whichever rehabilitation period is longer. However, convictions for serious sexual, violent, or terrorist offences continue to never be spent, and stricter disclosure rules will continue to apply to jobs that involve working with vulnerable people.

Bonus clawback provision not a restraint of trade

In Steel v Spencer Road LLP the High Court has held that a clawback provision entitling the employer to seek repayment of a bonus if the employee resigns within 3 months of it being paid, was not a restraint of trade.

The individual was employed on a salary of £65,000 per annum but was also entitled to a sizeable bonus – he received a bonus of £187,500 in January of the relevant year. However, this bonus was conditional upon him remaining employed for 3 months after he was paid.

The employee resigned in February and, under the terms of the contract, the employer sought repayment of the bonus. When he resisted, the employer issued a statutory demand for the full amount plus legal costs. The employee applied to the Insolvency and Companies Courts for the statutory demand to be set aside, arguing that the bonus clawback clause in the contract was an unreasonable restraint of trade or otherwise operated as a penalty clause and so was unenforceable.

His claim was dismissed. The judge found that the clawback provision was not a restraint of trade because it did not affect his ability to work elsewhere. All it did was require him to remain in the same employment for a relatively short period of 3 months after payment. After examining the various authorities on the issue of clawbacks and loan repayment agreements, the judge concluded that there might be circumstances where the conditions imposed on retaining a bonus were out of proportion to the bonus being received, but his view on the situation was that the condition here was very moderate and a not unreasonable requirement compared to the size of the bonus. The judge also decreed that the argument of penalty clause had no real prospect of success.

The individual repaid the bonus but appealed to the High Court, arguing that one of the cases on which the judge relied had been wrongly decided; but the court disagreed. It acknowledged that the requirement to remain employed for 3 months was a disincentive to resigning, and the fact that he would have to give 3 months’ notice meant that effectively he had to remain employed for 6 months in total following the payment. However, the High Court concluded that this did not operate as a restraint of trade in that it did not prevent him from earning a living.