EMPLOYMENT: An Introduction to London (Firms)

Introduction  

Due to COVID-19, employment lawyers have had to come to terms with a whole host of hastily put together and frequently changing regulations governing office working and the rights governing furlough. This is likely to continue over the next 12 months as companies grapple with the changing work environment and seek to find the balance between the old and new worlds of work.

Furlough  

In March 2020 Chancellor Rishi Sunak announced an unprecedented package of measures, including the Coronavirus Job Retention Scheme (CJRS). This scheme has been revised and extended in an ad hoc fashion; the latest extension announced on 25 January 2021 is due to run until 30 April 2021. In revisions made in December 2020, eligibility for the scheme shifted to include clinically extremely vulnerable employees and employees with caring responsibilities such as parents with school-age children. Many employers have spent the last year using the scheme to avoid closures and/or mass redundancies. Now, employment lawyers are observing the scheme being applied to working parents in a way that it wasn’t before.

The impact of COVID-19 on employers: flexibility, technology and globalisation

There are a multitude of issues that homeworking throws up for employers to deal with. Three of the most significant HR concerns this year include flexibility at work, dealing with technology and managing globalisation.

A remote workforce opens up cost saving possibilities by reducing office footprint. It also demonstrates the power of developing technology to liberate corporate thinking from the fear of losing control. Employers should explore how they can empower employees to create their own “bespoke” working arrangement in the future, within certain boundaries. This could lead to greater productivity, but also greater retention. But working digitally has also challenged our processes and increased stress, anxiety and mental health issues. In 2021 trends suggest that employers will have a greater focus on the importance of workplace culture and innovation to boost morale and to reconnect their workforce.

Employers should also be alert to the risk of discrimination or cyberbullying arising from homeworking and should take steps to minimise these risks. Managers should increase visibility and make an effort to stay in touch with colleagues and particular thought should be given to integrating the entire workforce on a regular basis.

Tax has also been an issue for employers over the past year. The pandemic has seen a dramatic increase in employees performing roles for UK companies in other countries, either because they could not travel back to the UK, or because they preferred not to do so. Some employers are trying to create a “location agnostic” model where employees can perform their roles from anywhere, so long as business needs are met. Unfortunately, employment, immigration and tax law combined turn a simple idea into a complicated tangle.

Back to the workplace 

As national restriction are put in place and then lifted, employers have sought guidance on issues such as which categories of employees can safely return to work, data privacy, and the necessary health and safety measures required to ensure a “COVID-secure” workplace. The roll out of the vaccine may put an end to this, but employers seeking to require employees to be vaccinated should be wary. Requiring vaccination opens a host of legal issues such as breaching implied trust and confidence, questions around data protection, and risks of discrimination on the grounds of disability or on the basis of philosophical beliefs.

Court delays 

As employment tribunal claims have risen so have the delays. This highlights an underfunded system grappling with understaffing and the pressure of the pandemic. In the second and third quarters of 2020 the impact of COVID-19 on the economy, combined with challenges on court resources, led to the highest level of single employment tribunal claims since 2013/14. Alongside this, there was also an increase in the outstanding caseload.

This rise in the number of claims is likely to continue because of the economic shock caused by COVID-19 and could be further accelerated when the furlough scheme ends.

In July to September 2020, the number of single employment claims increased by 13%, while the number of cases being heard and finalised decreased by 7%, when compared to the same period in 2019. The outstanding caseload rose by 22%, while cases were on average taking 5 weeks longer to be disposed of. For multiple cases (where there are more than two employees bringing the same claim against an employer) the situation was even worse, increasing by 24% compared to the same period in 2019. Disposals of cases reduced by 61% in the same period and the outstanding caseload increased by 11%. Multiple cases were however taking slightly less time to be finalised (95 weeks instead of 112 weeks).

These delays are putting pressure on the system, but also on those with claims which may lead to unsatisfactory outcomes for both employers and employees. It is likely therefore that forms of alternative dispute resolution, especially mediation (including forms of judicial mediation) are likely to see a rise in popularity over the coming months and years.

Data protection, IR35, and gender pay gap 

On 28 December 2020 a six-month grace period was agreed between the UK and EU regarding data transfers whereby personal data can flow freely between the EU and the UK (essentially maintaining the position that was in place before Brexit for an additional six months). During this period, the European Commission will work to complete its adequacy determination with the UK, which if obtained would allow the uninterrupted free flow of personal data between the EU and the UK.

Moreover, new IR35 rules will come into force as of April 2021 (previously postponed from April 2020 due to the COVID-19 pandemic). These rules may shift the burden of ensuring compliance with IR35 from your independent contractors’ personal service companies to you as the end user. From that point onwards, if employers do not operate IR35 correctly, they are at risk of having to pay out large tax and national insurance contribution bills.

The Government Equalities Office and the Equality and Human Rights Commission (EHRC) announced a reprieve to gender pay gap reporting for 2019/20 to reduce pressure on employers during the pandemic. By 5 April 2021 employers are obliged to share data from April 2020. When released, these reports will make interesting reading as they are based on average pay, which may only be a small proportion of the employer’s workforce if some staff were furloughed during 2020.

Brexit  

Brexit remains on the agenda for employers as the UK agreed a Trade and Co-operation Agreement with the EU on 24 December 2020 which left companies seven days to prepare for the most significant change in trading relationship for nearly 50 years. We are already starting to see the effects that Brexit has on businesses and will start to see how businesses find solutions to these challenges. Much of the UK’s recent employment law has been based on European directives and it’s not at all clear to what extent the UK will deviate from future trends or revise those laws what we already have.