Please see below a summary of the matters covered during our updates.

Harassment in the workplace

There were reports last week of an employee who was awarded an eye-watering £420,000 after her boss harassed her with inappropriate emojis (although the conduct clearly extended beyond this given the level of compensation).

In harassment cases, an employer can be held responsible for the actions of their employees. Harassment claims can be brought in relation to conduct of a sexual nature and also in relation to any of the protected characteristics under the Equality Act 2010 (such as disability or race). It is worth noting that in certain circumstances, the employee bringing the complaint does not have to have the protected characteristic if the conduct is sufficient to offend.

An important takeaway is that employers are much less likely to be held responsible for the actions of their employees where they can show that they took reasonable steps to prevent the conduct from occurring. For example, ensuring that there is an effective and robust anti-harassment policy is in place (which employees are aware of) and requiring employees to attend anti-harassment and equal opportunities training. We recommend that employers review what they are doing to prevent harassment in the workplace – the more you are doing, the better you will be able to defend yourself in the event a claim does arise.

Privilege in employment disputes

For those that are not aware, privilege is a legal principle that, in an employment context, can be used to withhold documents from an employee which you would otherwise be duty bound to disclose. That could arise in circumstances where an employee submits a data subject access request (“DSAR”), or where the employee has brought a claim in an employment tribunal or court and documents are required to be disclosed as part of the litigation process. The type of documents that can be withheld are those containing legal advice, or those prepared for the purpose of litigation, but there are a number of types of privilege that might apply.

It is important because it might allow you to withhold a document that would be damaging to your case, which the employee would be able to use against you. In a DSAR situation, it could also assist in reducing the number of documents that need to be disclosed to the employee.

The principle was highlighted in the recent case of University of Dundee v Chakraborty, where an employee brought a grievance, which was investigated by the employer and resulted in a grievance report. However, before the report was sent to the employee, the employee made a claim in the Tribunal. At that point, the employer sought legal advice and the lawyers made amendments to the report before it was provided to the employee. The Employment Appeals Tribunal found that both versions of the report should be provided to the employee thereby giving them an insight as to any weaknesses in the original draft.

This highlights how vital it is that legal advice is taken early on where a potential dispute could arise with an employee, and a grievance is a prime example of that. This can help you safeguard against anything that may potentially come back to bite you further down the line.

It is also worth noting that, if you use HR consultancies, correspondence with them is not automatically privileged as they are not legal professionals. Communications with them may therefore be disclosable in DSARs and in litigation, so it is worth keeping that in mind.

Hybrid working

Hybrid working has become one of the most common working patterns for many in the UK. We are seeing some common headaches with hybrid working, for example around staff collaboration, difficulties adapting to new technology and transporting hardware between home and office, to name a few.

However there are more insidious issues which can be hard to spot. These can include ensuring even and fair distribution of work and opportunities amongst office based and remote workers; ensuring home workers are visible and actively participating in company life; finding it difficult to eliminate a culture and experience built around office-based working and faster burnout rates amongst homeworkers.

In tackling these issues, businesses need to be adaptable, flexible and be prepared for some trial and error. There is not a one size fits all approach. Some measures we have seen work include:

1. Staff consultation;
2. Having good managerial training around managing a hybrid team; and
3. Having clear and transparent policies and practices in place that deal with distribution of work, but also deal with complaints of unfairness, and being seen to act on those complaints.

Indirect discrimination

Hybrid working can bring benefits but has the potential to cause detriments to those not in the office. This has been called the ‘Proximity Bias.’ Read our latest article on this topic here.

The Proximity Bias is nothing new. It is essentially prejudice against remote workers, or indeed towards office workers. From a legal perspective the Proximity Bias has potential to give rise to claims for indirect discrimination if the people affected share a particular protected characteristic. Briefly, indirect discrimination is where rules or practices, while not directed at staff with a particular protected characteristic, have the effect of putting them at a disadvantage.

As an example, women are at risk of being affected by the Proximity Bias more than men as they tend to work from home more than men. Flexible working therefore can become a barrier to women. While employers can sometimes justify an act of indirect discrimination, they may find it more difficult to justify a preference for office-based workers where operating a hybrid model thereby raising the risk of disputes and litigation.

Some ways in which employers can work to eliminate a culture built around being in the office include:

• Consulting with affected employees;
• Conducting equality impact assessments on existing and future practices and policies;
• Standardising and monitoring those practices to eliminate bias, and addressing concerns about discrimination swiftly;
• Providing regular and meaningful training to staff and managers;
• Training managers on how to deal with a hybrid team;
• Ensuring all staff have equal access to mangers; and
• Encouraging some home working at senior and manager levels if this can help to eradicate notions of home workers being less committed.

In addition to reducing the risk of claims, these measures could also improve the employee experience, wellbeing, productivity and staff retention.

IR35

Changes to the IR35 tax rules which were introduced to the public sector in 2017 and to the private sector in 2021 have often been criticised by businesses for being administratively burdensome and unclear. As part of former Chancellor Kwasi Kwarteng’s so called “mini-budget” in late September 2022, it was announced that these changes were due to be reversed, much to the delight of many businesses. However, as with many aspects of the infamous mini-budget, this proposal was short-lived and scrapped by Jeremy Hunt when he became Chancellor in mid-October.

Therefore, as it stands, businesses must continue to comply with the current IR35 rules to determine whether individual contractors who operate through personal service companies (or other intermediaries) are essentially working as ‘employees’ for tax purposes. If so, they should be taxed as employees.

Find out more in our recent article: IR35 – Full circle…for now

Retained EU Law (Revocation & Reform) Bill

On 22 September 2022, the controversial Retained EU Law (Revocation & Reform) Bill was introduced into Parliament. The primary purpose of the Bill is to revoke EU-derived subordinate legislation (such as regulations) and retained direct EU legislation by 31 December 2023, unless such legislation is transferred into UK law by that date, in which case it will become “assimilated” law. There is a possibility for an extension of the December 2023 deadline until June 2026.

The Bill also provides for the removal of the supremacy of EU law on 31 December 2023 which would mean that UK legislation will take priority over retained EU law in the event of any conflict. In addition, UK courts will have greater discretion to depart from retained EU case law.

With over 2,400 pieces of retained EU legislation due to be reviewed on or before 31 December 2023, the task ahead is significant and it is likely that the potential extension until June 2026 will be relied upon. In relation to employment law, areas such as TUPE, paid annual holiday, restrictions on working time, the agency worker regulations and the part-time and fixed-term worker regulations will all face review.

We consider it unlikely for the current EU-derived subordinate legislation in relation to employment law to be revoked entirely. However, the Bill includes powers for such legislation to be either restated into UK law (with the possibility of amending wording to resolve ambiguity), or potentially replaced, provided that any replacement legislation does not “increase the regulatory burden” on business. This will mean that existing EU-derived subordinate legislation could be replaced without full Parliamentary scrutiny.

Ultimately it remains to be seen exactly what changes the Government proposes and so there is not much that employers can do at present to prepare. However, given the timeframe, it is important to be aware of the risk of changes that could happen with very little notice.

As it stands, the Bill must still pass through the usual stages of the legislative process before reaching Royal Assent and so there is scope for further scrutiny and amendments to be made.

Right to Work Checks

All employers in the UK have a legal obligation to conduct right to work checks before employing new members of staff. The aim of the right to work checks is to prevent illegal working in the UK. During the COVID-19 pandemic, and specifically as a result of the Government’s ‘work from home’ guidance, adjusted right to work checks were introduced on a temporary basis. This meant that checks could be carried out over video calls rather than in person. However, the right to conduct these adjusted checks ended on 30 September 2022.

Employers will now need to carry out right to work checks using one of the following methods:
1. manual in-person checks;
2. the Home Office online checking service; or
3. via an Identity Service Provider (IDSP).
The appropriate method to use will depend on the individual’s immigration status and the documents they hold.

Find out more in our recent article: Are you ready for the changing right to work checks?

Immigration

Since Brexit and the loss of freedom of movement with the EU, the recruitment pool inside the UK has dwindled, with more UK Companies looking to apply for sponsor licences.

Key changes:
• Loss of UK Investor visa (February 2022)
• Loss of Sole representative of an overseas company visa (April 2022)
• Change- new Global Business Mobility Routes

New Visas:

• New Global Business Mobility Routes:

– Senior/ Specialist Worker visa (max 5 years or 9 years if paid more than £73,900) (Minimum salary £42,400 and working for overseas company for at least 12 months) (Replaces old Tier 2 Intra-Company Transfer Visa).

– Graduate trainee visa (max 12 months, no extension) (Replaces old Intra-Company Transfer Graduate Trainee visa) (Designed for individuals to undertake a UK-based work placement as part of a graduate training course that leads to a senior management or specialist position).

– UK expansion worker visa (max 2 years) (Replaces Sole Representative of an Overseas Company Visa) (For companies who haven’t traded in the UK but the overseas company can show 3 years’ worth of trading and a detailed business plan) (Provisional Sponsor licence to bring over UK expansion worker for initial 12 months and then option to elevate licence to include new visa tiers once company is established) (Minimum salary £42,400 or going rate whichever is the higher/ Minimum of 12 months employment unless paid £73,900).

– Service Supplier Visa (max 6 or 12 months depending on trade agreement, no extension) (valid international trade agreement) (Replaces Temporary Worker – International Agreement route) (The applicant must be sponsored by an entity that has been authorised to sponsor a Service Supplier. They also have to have a contract with the overseas service provider, and that contract must have been ‘registered’ with the Home Office).

– Secondment Worker Visa (max 2 years) (min £50 Million contract between overseas organisation and the UK sponsor that has been approved by the Home Office) (For short term secondments on high value contracts, minimum 12 months service working for overseas employer).

– (can change visa in country on two of them but cannot settle on any of these visas)

• Scale Up visa (settlement after 5 years) (For High Growth industries, which can demonstrate annualised growth of at least 20% in turnover or staffing for the 3-year period prior to the application and having a minimum of 10 employees at the start of this 3-year period) (6 months sponsored then after this no requirement for sponsorship, minimum salary £33,000 + must have a degree level qualification).
• High potential Individual (no extension- max 2 years (all other degrees) or 3 years (PHd)) (The requirement is to have either a bachelor’s or postgraduate degree qualification from a non-UK top 50 global overseas university).

Future changes:

• Change to Innovator visa endorsing bodies- significant reduction in endorsing bodies (currently 57)
• Potential Angel Investor route under the Innovator visa

Trends:

• Most new visas do not lead to settlement.

Dated 2 November 2022