After a challenging year for the UK economy, it has never been more important for HR to be on top of the rapidly changing legal landscape. As 2020 draws to a close, we look at what themes and trends have emerged from employment law in 2020, upcoming changes in 2021 and what impact events in 2020 are likely to have on the future of work.
Lessons learned?
If 2020 has taught us anything, it’s to expect the unexpected and be flexible. Who could have predicted last year that ‘furlough’ would be a topic of daily conversation? There’s more to 2020 than just the furlough scheme, though. Key themes and trends, such as the use of transparency to drive social change or conscience, an arguably widening scope of discrimination protection, rising numbers of whistleblowing complaints and continuing conundrums in employment status and holiday pay have all been evident throughout 2020 and look set to continue in 2021.
Transparency: Employers can expect to see transparency continuing to be used as a subtle, yet effective, tool for change in 2021 and beyond. In 2020, employers have been encouraged to publicly repay £400 million in furlough grants, publish online health and safety risk assessments for employees and customers and accept that HMRC will publish the names and details of those using the furlough scheme from 1 December 2020.
Elsewhere, the #BLM movement is also driving greater transparency. Employers are being encouraged to sign up to Business in the Community’s Race at Work Charter to commit to ensuring that ethnic minority employees are represented at all levels within their organisations and the Commission on Race and Ethnic Disparities (set to report before the end of the year), is rumoured to be looking again at ethnicity pay gap reporting after the consultation closed in January 2019.
Gender pay gap reporting, which was postponed in 2020, will resume in April 2021, when it is likely to be under increased scrutiny to assess the impact of the pandemic, where women have reportedly been disproportionately impacted.
Widening discrimination protection? Testing the boundaries of discrimination also looks set to continue into 2021 and beyond. 2020 saw the first successful gender fluidity case in Taylor v Jaguar Land Rover Ltd, where a Tribunal took a pragmatic approach in concluding that Ms Taylor, who identifies as gender fluid/non-binary, was covered by the protected characteristic of gender reassignment in the Equality Act 2010 (which requires someone to be “proposing to undergo, are undergoing or have undergone a process or part of a process for the purpose of reassigning their sex by changing physiological or other attributes of sex”) and awarded £180,000 in costs.
The question of what amounts to a ‘philosophical belief’ under the Equality Act 2010 has also continued throughout 2020, with Tribunals finding that beliefs in ethical veganism, stoicism and that sex and gender are set at birth are capable of falling within the protected characteristic of religion and belief – but that vegetarianism and other beliefs that individuals cannot change their biological sex or gender are not (although one case is on appeal to the EAT).
Employment status and holiday pay: Challenges to employment status and calculation of holiday remain firmly on the agenda for employers in 2021. In 2020, whilst CitySprint couriers and foster carers successfully established worker status, DPD couriers did not (owing to the presence of a substitution clause), although they have now appealed to the EAT. Crucially, we are still awaiting the Supreme Court’s decision from June 2020 as to whether Uber drivers are workers or independent contractors, which is expected imminently.
2021 looks set to be a bumper year for holiday pay developments. In June, the long-standing question of whether voluntary overtime should be construed as ‘normal pay’ and included in holiday pay will be heard (and hopefully put to rest!) by the Supreme Court in Flowers v East of England, followed the next day by Chief Constable of Northern Ireland v Agnew, where the same court will determine whether a 3 month gap in a series of unlawful deductions breaks a series of deductions. In November, we hope to receive final confirmation of how holiday pay should be calculated for part-year workers when the Supreme Court hears the case of The Harpur Trust v Brazel.
On the horizon
Other areas of focus for HR in 2021 will be the changes to the UK’s immigration rules and IR35 reform.
The biggest change to the UK’s immigration rules in the last 40 years took effect from 1 December 2020. Employers who wish to employ non-British and non-Irish people to work in the UK require a sponsor licence, which enables businesses to sponsor the worker’s visa. From 2021, visas are needed for non-EEA, EEA and Swiss migrants (except Irish nationals) who are coming to the UK to work. Businesses wishing to employ non-British and non-Irish workers will require a sponsor licence to sponsor new migrant workers who arrive in the UK to work from 1 January 2021.
Businesses who engage contractors through personal service companies will need to agree a new approach once the IR35 changes come into effect on 6 April 2021 – which effectively push the tax liability risk onto the end-user. Will your business want to engage all workers as employees (with the additional tax costs and employment rights), use agencies or umbrella companies, or simply refuse to engage personal service companies altogether? Many businesses will have prepared for these changes last year, but those who haven’t can start by identifying any arrangements that are potentially affected, start talking to existing contractors about it and establish new internal protocols/policies to assess and record status and cascade information down the chain.
2020 – a lasting legacy?
If that wasn’t enough, HR professionals will also be preoccupied by some of the bigger questions thrown up by the past nine months, which have fundamentally challenged our ideas of how and where we work. According to the headlines, it is now fairly established that employees don’t want to go back to the office full time and companies are re-thinking this through too. Do businesses still need a big head office – or something else? We know that people want to come back to the office – but not all the time and not for everything. How might a blended or hybrid approach to working work in practice? Will offices become places where we go for social or team work only?
It certainly seems like the employee life cycle is being fundamentally disrupted, which is likely to continue in the longer term if we keep up an element of homeworking. HR will need to adapt and change accordingly. Now is a good time to listen to people within the business, look to sort the technology for the longer term and start rethinking HR practices (such as performance management, homeworking, employee engagement), before drawing up a plan for now (and the next 6 months) – as well as a longer-term strategy for the future.
Shakeel Dad is a Partner (Employment) at law firm Addleshaw Goddard, Leeds. Shakeel has more than a decade of experience acting for national and international businesses on the full range of employment issues. He is trusted by clients to deal with the most sensitive, complex and high profile employment matters including large scale change programmes, high value employment tribunal litigation including complex whistleblowing and discrimination matters, and the handing of board disputes.
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