UK legislation update: Government supports various Private Members’ Bills; national minimum wage increase from April 2023

The Government recently announced its support in second readings of a number of Private Members’ Bills proposing reforms originally slated for the elusive Employment Bill.  Most provide for the detail of the changes to be made by regulation and are therefore light on detail, but they do increase the likelihood of proposals actually coming into force in the next year or two.  The Bills now confirmed to have Government support include:

  • Carer’s Leave Bill: a ‘day one’ right for those with certain caring responsibilities to unpaid leave of one week per year, which can be taken in half or individual days and will not require evidence of entitlement. The expectation is that regulations would be laid and commenced in 2024.  See the press release here.
  • Employment Relations (Flexible Working) Bill: improvements to the right to request flexible working to allow two requests (rather than one) per 12 months, require employers to consult before refusing a request and to make decisions within two rather than three months, and remove the requirement that the employee must explain in the statutory request what effect the change would have on the employer and how that might be dealt with. The Bill does not include an amendment to make this a ‘day one’ right on the understanding that this would be done by secondary legislation;  the Government supports the Bill but has not yet clearly committed to remove the current 26 week service requirement.
  • Protection from Redundancy (Pregnancy and Family Leave) Bill: before making an employee on maternity, adoption or shared parental leave redundant, an employer must offer them a suitable alternative vacancy, if available, with the employer or an associated employer.  The Bill will extend this redundancy protection to cover periods during or after pregnancy (including after early miscarriage) or after maternity, adoption or shared parental leave;  regulations will specify the period of protection but the Government press release here suggests the period will be up to 18 months after the birth.
  • Worker Protection (Amendment of Equality Act 2010) Bill: the introduction of employer liability for harassment of employees by third parties, and a new proactive duty to take all reasonable steps to prevent sexual harassment in the workplace (with a potential 25% uplift to tribunal awards for breach). The Bill envisages it will come into force one year after it receives Royal Assent.

The Government previously announced its support for Private Members’ Bills on :

  • Neonatal Care (Leave and Pay) Bill: a ‘day one’ right to a minimum of one week’s leave for employed parents of a child requiring neonatal care, and statutory pay for those with 26 weeks’ service, expected to come into force 18 months after the Bill receives Royal Assent.
  • Employment (Allocation of Tips) Bill.

Some of the other Private Members’ Bills currently awaiting a second reading also replicate earlier Government employment law reform proposals (and may therefore also receive Government support at second reading), for example Bills introducing limitations on the use of non-disclosure agreements, and a right to request more predictable and stable employment terms.  Other Private Members Bills still at an early stage include proposed rights relating to fertility treatment and miscarriage leave as well as minor changes to paternity leave. HR practitioners may need to plan for a substantial update to staff handbook policies in the not too distant future….

Autumn Statement

The Autumn Statement included confirmation of increases to the national minimum wage rates from April 2023.  The rate will be £10.42 an hour (up from £9.50) for workers aged 23 or over, £10.18 an hour for those aged 21-22 and £7.49 an hour for 18 to 20-year-olds; the apprentice rate will be £5.28 an hour.

Like other allowances and limits, the employer NICs threshold will be frozen until April 2028.

The HSF Tax Group has produced a full briefing on the Autumn Statement, here.

 

South Africa: remote working issues for employers

Auditing, advisory and tax services firm PwC recently announced that 40,000 client services employees based in the US would be permitted to work virtually and live in any location in perpetuity. Those in support staff roles such as human resources and legal operations were given the option to work virtually on a full-time basis some time ago.

However, employees will be required to be at the workplace no more than three days a month to attend critical teams meetings, client visits and training sessions. Employees who choose to work virtually full-time from a lower-cost location would receive decreased remuneration.

Tyler Hendry, a senior associate at Herbert Smith Freehills New York confirms that PwC’s proposal to decrease employees’ remuneration where they opt to work from a cheaper location will generally be in accordance with US employment law.

That is because the majority of US employees are employed under at-will arrangements that allow employers to unilaterally change terms and conditions of employment without employee consent. (He did, however, note that this announcement raises a host of other compliance concerns, including ensuring compliance with state and local laws in the jurisdiction where an employee is located).

SA employment law does not permit a unilateral change to an employee’s terms and conditions of employment (which includes remuneration) in the absence of the employee’s consent. Therefore, while PwC in the US may be permitted to inform employees that if they choose to work from a lower-cost location, their remuneration will be decreased, its SA counterpart would be required to obtain those employees’ consent before doing so.

In the SA context it has been necessary for employers to take into account a variety of factors when determining which mode of working is mutually beneficial for both parties to the employment relationship. These include the employer’s operational requirements, the effect of working from home on productivity and collaboration with colleagues, screen fatigue as well as the effect of isolation on employees’ physical and mental wellbeing.

It is probable that in determining which model would be appropriate, the majority of employers will be required to consider two main categories of employees: those who are able to work from home and those who are not able to work from home. Those who are not able to work from home may fall into two subcategories: those who cannot work from home for logistical reasons (such as internet access or an inability to create a private working space) and those who cannot work from home because the nature of the position is such that they are only able to render services at the employer’s office (such as cleaners and receptionists).

The nature of the workplace, the sector in which the employer operates and the benefits and pitfalls of working remotely as opposed to in the office will need to be taken into account when determining what is appropriate for that employer. Whether an employer will require employees to present proof of vaccination before returning to the office (in accordance with their mandatory vaccination policy) would also be an important consideration.

Anecdotally, it appears as if the majority of SA employers would prefer to implement a hybrid model to continue to provide existing employees with the flexibility to which they have now become accustomed, as well as to attract top talent from across the globe which may then be permitted to work for the local SA entity from another country.

Importantly, employers must be able to show that those employees who are requested to work from home or from the office or a combination of both have been selected according to fair and objective criteria to mitigate the risk of an unfair labour practice claim or an unfair discrimination claim.

There are a number of important issues for employers to consider when determining whether it is appropriate or desirable for its employees to work from their homes:

  1. An employee’s contract of employment ought to stipulate the employee’s place of work. It may provide for the employer to change the place of work from time to time. In the event that provision is made for such change, it would not be necessary to obtain the employee’s consent to change the employee’s place of work from the office to the employee’s home. However, it is advisable from a human resources and industrial relations perspective to consult with employees and obtain their views before amending the contract.
  2. An employer has an obligation to ensure that it provides a workplace which is both healthy and safe. It may be too onerous for an employer to inspect, whether virtually or physically, the working conditions of each of its employees who are able to work from home and the employer may then not be willing to assume any liability in that regard.
  3. Employees have an obligation to maintain confidentiality in relation to their work product. This may present challenges in circumstances where the employee’s partner is also working from home.
  4. It will be necessary for the employer to ensure that the security of the employer’s hardware and software will be adequately protected while the employee works from home.

Employers may be required to consider whether it is necessary to amend the employment contract, alternatively the disciplinary code and procedure to include an obligation on the part of employees to protect the employer’s equipment from theft and/or damage.

Employers will need to satisfy themselves that employees are accessing a network which is safe and secure given the obligations of both employers and employees in terms of the Protection of Personal Information Act in relation to the processing of personal and special personal information.

It is probable that most employers issued allowances to assist employees with the “set-up costs” associated with working from home when the pandemic began. A reference to this allowance or benefit should have been or should now be included in the applicable policy or the employee’s employment contract to ensure consistency when new employees are employed.

Again, it will be important for employers to be able to illustrate that the criteria applied when issuing the allowance were fair and objective to avoid unfair discrimination or unfair labour practice claims.

In the event that the employer employs employees who are based in other countries, it will be necessary to take considered legal advice on the tax implications for both the employer and the employee. The employee’s remuneration will undoubtedly also become an issue of contention in light of the possible requirement to report on remuneration as outlined in the Companies Amendment Bill as it is probable that foreign-based employees will be paid more than their SA counterparts.

Those employers that were able to do so due to the nature of the service they provide adapted quickly and successfully to remote working in March/April 2020. In the event that employers did not consider the possible risks associated with remote working at that time, it is important that they do so now as more South Africans continue to receive vaccinations and the option of working from home or the office becomes more of a reality.

 

This article was published first by the Business Day: https://www.businesslive.co.za/bd/opinion/2021-10-18-jacqui-reed-many-issues-to-consider-in-new-work-scenarios/ 


For more information, please contact Jacqui Reed or your usual Herbert Smith Freehills contact:

Jean Meijer
Jean Meijer
Partner, Competition - Johannesburg
+27 83 327 3386
Jacqui Reed
Jacqui Reed
Senior Associate, Employment, Pensions & Incentives - Johannesburg
+27 10 500 2648

UK: new family-friendly rights proposed

In July 2019 the Government published its response to a consultation on extending redundancy protections to those on family leave, but without specifying any particular timetable for doing so.

Currently women on maternity leave are given priority over any suitable alternative vacancies should their role be made redundant. An employer’s failure to offer any such available vacancies renders the consequent redundancy dismissal automatically unfair. The Government has committed to extend this right of priority over vacancies to apply from the point at which the employee notifies the employer – whether orally or in writing – that she is pregnant, until six months after the end of maternity leave (even if the mother does not immediately return to work due to taking another form of leave at that point).

Similar protection will be available for those taking adoption leave. The Government intends also to provide protection for those taking shared parental leave, proportionate to the amount of leave taken and the threat of discrimination, but has yet to determine exactly how this will work. No additional protection will apply to paternity leave.

The Government will also establish a taskforce of employer and family representative groups to make recommendations on improvements to the information available to employers and families on pregnancy and maternity discrimination, and to develop an action plan to facilitate pregnant women and new mothers staying in work.

….

The Government also published Good Work Plan: Proposals to support families setting out three new consultations on:

  • a new right to neonatal care leave from ‘day one’ of employment, with flat rate statutory pay conditional on 26 weeks’ service at the 15th week before the baby is due. Where a newborn is in hospital for neonatal care for at least 2 continuous weeks, the number of weeks, capped at a limit to be specified (suggested options are 2, 3, 6, or 12 weeks), would be added on to the end of maternity or paternity leave. Consultation ends on 11 October 2019.
  • whether larger employers (with 250 or more employees) should be required to publish their policies on flexible work and family related leave and pay on their websites, possibly with key information to be included on the government’s gender pay gap reporting portal; the consultation also asks whether and how (all) employers should be required to set out their approach to flexible working in job adverts. Consultation ends on 11th October 2019.
  • the case for a potentially radical reform of family leave and pay, including possible changes to paternity, shared parental and maternity leave and pay and their possible replacement with a single ‘family’ set of entitlements, with the aim of encouraging greater sharing between mothers and fathers of leave and childcare responsibilities. The consultation closes on 29th November 2019. The Government is currently evaluating the shared parental leave regime and expects to report on this later in 2019.

….

The Government Equality Office has published Gender equality at every stage: a roadmap for change, which mentions some of the initiatives above but also confirms plans to consult on a new right to carers’ leave, review the enforcement of equal pay legislation (including consideration of when mandatory equal pay audits could be appropriate), and assess the effectiveness of gender pay gap reporting with consultation on any changes by 2021. The roadmap also mentions the possibility of requiring employers to publish retention rates for employees returning from parental leave.

Anna Henderson
Anna Henderson
Professional Support Consultant, London
+44 20 7466 2819

Philippines: Working from home enshrined in legislation

On 20 December 2018 the Filipino President Duterte signed off on the Telecommuting Act, Republic Act No. 11165 (the Act), which has been informally dubbed the “working from home act”. The Act allows private sector employees to work flexibly from home or any place outside the office with an internet connection, in an effort to increase employee productivity, performance, job satisfaction, and to resolve issues of long commutes to office workplaces.

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UK: gender pay gap reporting deadline passes, new guidance published

The deadline for the second year’s gender pay gap reports has now passed, with roughly the same number of employers as last year’s total meeting the deadline (and almost half of them doing so in the last week).  Just over half of private companies have reported gaps that are higher or no lower than last year’s, which is unsurprising given that, even if employers have taken measures to narrow the gap, these are likely to take time to show results.  However, commentators have used the lack of progress to urge the Government to make mandatory the publication of action plans to narrow the gap, a call that to date has been resisted by the Government (see here).

There is plenty of guidance available for employers looking for ways to try and improve their figures for next year.  In addition to recommendations from the EHRC and a parliamentary select committee (see here), the Government Equalities Office recently published two sets of guidance, Eight ways to understand your gender pay gap and Four steps to developing a gender pay gap action plan, along with an action note and infographic summarising the evidence based actions employers can take to support women to progress, to help to close the gender pay gap and increase gender equality in the workplace.  The Women and Work All Party Parliamentary Group have also launched How to recruit women for the 21st Century (see here for further details) which, among other recommendations, calls on the government to commission or publish new guidance for employers on positive action.

Employers are not currently required to report on the ethnicity pay gap; a Government consultation on introducing such a duty closed at the end of January 2019 and its response is awaited.  In the meantime, a number of large employers have signed up to a pledge to report voluntarily, organised by Involve, which has published a Framework for Ethnicity Pay Gap Reporting to assist employers – available here.

Anna Henderson
Anna Henderson
Professional Support Consultant, London
+44 20 7466 2819

UK: pay gap reporting – yet more guidance on gender reports

With the second deadline for gender pay gap reports a month away, more guidance has been published (in addition to that covered here). The Government Equalities Office has published two sets of guidance, Eight ways to understand your gender pay gap and Four steps to developing a gender pay gap action plan, to help employers close their gender pay gaps. The first proposes a set of questions focussing on potential gender imbalance in recruitment, promotion or retention, starting salaries/other particular aspects of pay, or performance rating. It also suggests that employers ask whether there is sufficient support for part-time employees to progress, and whether both men and women with caring responsibilities are supported, stating that employers may wish to enhance pay for shared parental leave to encourage men to take it and to advertise all jobs as flexible by default. The second guide highlights the need for buy-in from senior people and the involvement of a wide range of stakeholders in developing an action plan, and emphasises the need for specific, time-bound targets and a named individual to drive the plan forward.

The Women and Work All Party Parliamentary Group has also launched How to recruit women for the 21st Century, a new toolkit to support female progression in the workplace. Suggestions include the introduction of name-blind and context-blind applications, avoiding asking applicants about their current salary, and adopting a flexible working culture to improve the pipeline. It also calls on the government to commission or publish new guidance for employers on positive action.

The Labour Party has pointed to more flexible work as essential to close the gender pay gap, to facilitate working women and also encourage caring responsibilities to be spread more equally across the genders. Dawn Butler has stated that Labour would give employees the right to work flexibly from day one of a job (currently the right to request flexible work is available after 26 weeks) and create a presumption that work can be done flexibly which it would be for employers to rebut.

Anna Henderson
Anna Henderson
Professional Support Consultant, London
+44 20 7466 2819

UK: New resources – flexible work form, SPL guide, illegal work, disabled employees

The Government has published the following new resources for employers:

Please contact us if you would like a copy of our HSF client briefing on the new shared parental leave regime.

UK: Disability – scope of duty to make reasonable adjustments

  • The Court of Appeal has confirmed that neither EU nor UK law impose on an employer a duty to make reasonable adjustments for disablity to accommodate an employee’s need to care for a disabled dependent. The duty is owed only to disabled employees, not employees who are associated with someone with a disability. (Hainsworth v Ministry of Defence 

    This ruling is relevant to requests to work flexibly. Of course employers receiving such requests need to avoid direct discrimination on grounds of association with a disabled person, and indeed other forms of direct discrimination. In some circumstances refusal might amount to indirect sex discrimination, and there will also be employee relations considerations. Our briefing on the new flexible work regime discusses these issues (see above).
  • The EAT has ruled that employers are not under any duty to disabled employees to make reasonable adjustments by modifying trigger periods for warnings under a sickness absence policy. (Griffiths v Secretary of State for Work and Pensions) Although this decision is helpful to employers, it should be treated with caution as it conflicts with another EAT ruling (HMRC v Whiteley). The EAT here appeared to conclude that there was no disadvantage because the policy was applied equally to non-disabled employees, failing to recognise the disadvantage arising from the higher level of absence associated with disability.