Member Article

As we begin to emerge from the pandemic, many issues which have been on the back-burner over the past few years are starting to resurface. In this article we take a look at some hot topics and legal developments we are expecting to take place this year. 

Flexible working

As those of us who have worked from home for the past two years start returning in earnest to the office, flexible working is on everyone’s lips. The UK Government’s long awaited Employment Bill is expected to widen the scope of the current right to request flexible working, and make it a ‘day one’ right. We expect that the bill may also revise some of the current eight statutory reasons for which a flexible working request can be refused. Organisations are, of course, able to have broader flexible working policies than those required by legislation, and with the (partial) move back to offices, hybrid working policies are becoming more common. The pandemic experience has undoubtedly made hybrid working requests more difficult for employers to refuse. However, the long term impact on on-site and office working remains to be seen. Employers should be conscious of the need to carefully balance discrimination aspects with health and safety concerns when introducing hybrid working policies.

Equality and diversity

Sexual harassment

Sexual harassment at work continues to be an area of focus, and the UK has recently ratified the International Labour Organisation’s Violence and Harassment Convention. As part of ongoing efforts to prevent harassment at work, the UK Government plans to legislate for a new duty for employers to prevent sexual and third-party harassment. This is likely to include a defence where an employer has taken ‘all reasonable steps’ to prevent the harassment. A proposal to extend the time limits for claims under the Equality Act 2010 is also being considered. There is currently no timescale for the implementation of these changes.

In order to ensure compliance with the new duty, employers should ensure they have robust HR policies, training programmes and disciplinary procedures in place to prevent all forms of harassment.

Diversity reporting

The UK Government is obliged to review the impact of the gender pay gap reporting regulations, which came into force in 2017, by April 2022. The key metric is whether the reporting requirements have sufficiently reduced the gender pay gap, which, as of April 2021, stood at 7.9%. One possible outcome of the review could be the introduction of financial penalties for organisations which fail to comply with the reporting regulations.

Calls for mandatory ethnicity pay gap reporting have grown in recent years. Despite this, the number of companies publishing this information fell sharply in 2021. The UK Government recently confirmed it will not be introducing mandatory ethnicity pay gap reporting. Guidance on voluntary reporting will be published, including on complex issues such as data protection, in the hope that more companies will choose to share workforce ethnicity information.

As part of the National Disability Strategy, the UK Government has recently launched a consultation on disability workforce reporting. Voluntary reporting by employers on this issue is limited at present, therefore the consultation is seeking opinions on how disability workforce reporting can be improved.

Pregnancy and maternity protections

The UK Government has committed to extending the period of redundancy protection applicable to pregnancy, such that the protected period runs from the date an expectant mother notifies the employer of pregnancy to the date falling six months after the end of maternity leave. It remains to be seen when legislation will be passed to enact this.

Data protection

Several anticipated developments in data protection law will have an impact on employment. The UK Government has proposed changes to reduce the data protection compliance burden on businesses, and is consulting on  a fee structure for access to personal data, modelled on the system pertaining to the Freedom of Information Act 2000. The government is also considering a cost ceiling, introducing safeguards, amending the threshold for responding to requests and changing the definition of “manifestly unfounded” in relation to alleged data protection law breaches.

The UK Government is also consulting on the further regulation of AI, including automated decision making. One possibility is the introduction of an ‘Accountability for Algorithms Act’, which would regulate employers’ monitoring of employees through technology and  the setting of performance targets using algorithms.

Finally, the Information Commissioner’s Office  is expected to publish updated data protection and employment practices guidance during 2022. This will bring its guidance up to date following the implementation of the GDPR under the Data Protection Act 2018. The new guidance should cover recruitment and selection, employee record keeping, staff monitoring and guidance on workers’ health, among other things. Employers who introduced staff privacy notices and retention schedules in the lead up to GDPR implementation should review their policies in light of the revised guidance when it is available. 

Neonatal and miscarriage leave and pay

In March 2020, the UK Government committed to legislating for 12 weeks’ statutory leave for parents of babies requiring neonatal care. There appears to be strong cross-party support for statutory neonatal and miscarriage leave, and these matters may be considered separately from the forthcoming Employment Bill on the basis that the bill is likely to be politically controversial. However, the UK Government’s commitment to these reforms is now in some doubt following recent comments in the House of Commons from the responsible UK Government minister.

Whistleblowing

The EU Whistleblowing Directive (the Directive) came into force in early 2021, after the end of the Brexit transition period. While it remains unclear whether the UK Government intends to update UK law in line with the Directive, companies operating on both sides of the English Channel may choose to apply the Directive to their UK staff.

A key component of the directive is the requirement for all firms with 50 or more workers (and all financial services firms, regardless of the number of workers) to establish a channel for the internal, anonymous reporting of relevant disclosures.

Confidentiality and non-disclosure agreements (NDAs)

Before the pandemic, the UK Government published proposals to prevent the misuse of NDA provisions in the settlement of workplace harassment and discrimination claims. Although the UK Government reiterated that confidentiality clauses can serve a legitimate purpose in both employment contracts and settlement agreements, the proposals aim to curb the use of NDAs in an employment context, including through a requirement for independent legal advice to be provided to individuals who are asked to sign an NDA. Implementation of these reforms has been delayed by the pandemic and they are now expected as part of the forthcoming Employment Bill.

Post-termination non-compete clauses

The UK Government has consulted on radical proposals to regulate post-termination non-compete clauses. Proposals include a requirement for employers to compensate employees for the duration of a post-termination non-compete clause, requiring employers to confirm in writing to employees the exact terms of a non-compete clause before their employment commences, introducing a statutory limit on the length of non-compete clauses, or banning the use of post-termination non-compete clauses altogether. A response to the consultation and further details of any planned changes are awaited.

Key cases

Harpur Trust v Brazel – what holidays should part-year workers be entitled to?

This significant case was heard by the Supreme Court in November 2021. At issue is whether ‘part-year workers’ (those working only part of the year, such as during school terms) and others with highly irregular hours should have their annual leave pay entitlement capped at 12.07% of annualised hours. Under the Working Time Regulations (WTR), workers are entitled to be paid the rate of a week’s pay in respect of a week’s leave. However, ‘a week’s pay’ can be difficult to determine for workers with irregular working hours. 

Prior to this case being heard by the Court of Appeal, many organisations developed a practice of stating that workers accrue holiday pay at a rate of 12.07% of hours worked. This was on the basis that 12.07% is the proportion of weeks per year that a full-time worker is entitled to as paid annual leave under the WTR. However, the Court of Appeal held that the WTR make no provision for pro rating. Very simply, the WTR requires employers to calculate  a week's pay in accordance with the provisions the Employment Rights Act 1996 and multiply that figure by 5.6 (the number of weeks’ holiday entitlement proscribed by the WTR). For workers with weeks during the year during which no work is undertaken, this would typically result in a substantially higher rate of holiday pay accrual than 12.07%. If upheld by the Supreme Court, this case could lead to a flood of claims for backdated holiday pay from workers with irregular hours and open the door to similar proceedings from other non-full time workers. 

Mackereth v DWP – clash of rights

Judgement is awaited from the Employment Appeal Tribunal (EAT) on whether a Christian doctor's conscientious objection to transgenderism was capable of protection as a religious or philosophical belief under the Equality Act 2010. The doctor had refused to address transgender patients by their chosen pronoun. A tribunal held that the doctor’s religion was protected under the Equality Act 2010. However, his particular beliefs that God only created males and females and that a person cannot choose their gender, his lack of belief in transgenderism, and his conscientious objection to transgenderism, were views incompatible with human dignity which conflicted with the fundamental rights of others. They were therefore not protected religious or philosophical beliefs under the 2010 Act. It is hoped that the EAT’s decision will bring clarity to this topical and sensitive issue.

For more information, please contact Neil Maclean, Partner in our employment team, Sarah Leslie, Associate in our employment team, or your usual Shepherd and Wedderburn contact. Additional reporting provided by Robbie Callander.