We take a look at the key legal developments employers should be watching in 2020 and the actions to take.
From 6 April 2020
- New legal requirements for employment contracts
Employment contracts must be issued on or before the start of employment to new employees and new workers. Currently, a contract only needs to be issued to employees within the first two months of employment.
The contract must now also include specific details of any probationary period, paid leave, benefits and training requirements.
Action: Review and update template contracts of employment and staff handbooks.
- How to calculate holiday pay changes
The reference period for calculating average holiday pay will increase from 12 weeks to 52 weeks for workers who do not have a fixed working pattern or pay.
Action: HR and payroll systems need to be updated.
- New requirements for agency workers
Agency workers must be provided with a key statement of terms and increased protection on their right to equal treatment compared with permanent employees.
Action: Review agency worker agreements and onboarding process.
- New rights for parents suffering a child bereavement
A new right of parental bereavement leave and pay for employees who have lost a child under the age of 18 or suffered a stillbirth after 24 weeks’ pregnancy.
Action: Update staff handbook to include parental bereavement leave policy.
- New rates effective from April 2020
National Minimum Wage (NMW) will be updated, Statutory Sick Pay will increase to £95.85 per week, and family friendly rates (such as SMP, SPP and SPP) will increase to £151.20 per week.
Key employment law cases to look out for in 2020
Several cases are being considered by the Supreme Court this year (the highest court in the UK), the outcome of which could have a significant impact on employers.
1. Are Uber drivers genuinely self-employed?
Currently not. Several Uber drivers claimed they were workers and brought claims for unlawful deduction from wages and holiday pay. The court decided Uber exercised sufficient control over how the drivers worked whilst they were in their authorised territory, signed into the Uber app and ready and willing to accept bookings. During this time, they were ‘workers’ and entitled to the benefits and protections offered to them.
Unlike the self-employed, workers benefit from rights including holiday pay, NMW, statutory sick pay and pension auto-enrolment.
In July 2020, the Supreme Court will consider Uber’s appeal against this decision. If Uber lose, it may impact Uber’s business model and how they deliver their service. They may also be liable for back payments of holiday pay and NMW to their entire fleet of drivers.
Employers, particularly those in the gig economy, should conduct a proper status determination at the outset and ensure that all its workforce is correctly engaged to avoid significant financial liabilities.
2. Are workers on sleep-in shifts entitled to the National Minimum Wage?
Currently not (subject to certain conditions) according to Royal Mencap Society v Tomlinson-Blake. The court decided sleep-in workers are only entitled to NMW in respect of hours in which they are required to be awake for the purpose of working, not for the whole shift.
In February 2020, the Supreme Court will consider Unison’s appeal against this decision. If Unison succeed, employers who operate sleep-in shifts may be liable to back pay for up to six years and will have to reassess their business model, given the additional labour costs they will have to incur. It may also mean that previous disclosures on NMW compliance to HMRC under the Social Care Compliance Scheme will have to be revisited as these will no longer be correct. If Unison succeed, it is hoped that HMRC will once again reopen this scheme to allow employers to self-correct any underpayments of NMW without being penalised.
3. Can workers employed at one site bring equal pay claims by comparing themselves to workers employed at a different site?
Potentially they can according to Asda Stores Ltd v Brierley and others. The Court of Appeal had decided the roles of shop floor workers could be compared to those in the distribution centres for equal pay purposes. For more detail on this case please see our article back in March 2019.
Later this year, the Supreme Court will consider Asda’s appeal. If unsuccessful, the case will move onto the next step of an equal pay claim – considering whether the work undertaken by the shop floor workers was the same, similar to or of equal value to the distribution workers.
Ultimately, if Asda lose, they could be liable for up to six years’ back pay for all affected workers. The case highlights the importance of an equal pay audit to avoid the risk of significant financial liabilities.
4. Can an employer be held liable for its employee’s unauthorised disclosure of personal data?
Currently it can according to Morrison Supermarkets Plc v Various Claimants.
The Court of Appeal decided the supermarket was vicariously liable for data breaches caused by its own employee who deliberately leaked online the personal details of almost 100,000 colleagues.
In November 2019 the Supreme Court heard Morrison’s appeal and we are expecting a decision early this year. If unsuccessful, it leaves employers exposed to data privacy breaches by rogue employees as well as fines being imposed by the Information Commissioners Office.
Employers should consider insuring against such breaches in addition to having appropriate policies in place and staff training concerning the handling of personal data.
5. Is it discriminatory to offer enhanced maternity pay to mothers on maternity leave but not to fathers on Shared Parental Leave (SPL)?
Currently not, according to Ali v Capita and Hextall v Chief Constable of Leicestershire Police. This is primarily because the purpose of maternity leave relates to matters exclusive to the birth mother resulting from pregnancy and childbirth. By contrast, ShPL is provided to enable parents to look after their newborn children.
However, if the Supreme Court overrule the decisions, this could expose employers to claims for historic back pay. It will also mean employers have to revisit their family friendly policies and account for the increase cost of enhanced pay for fathers on SPL.