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Brexit: A ‘Norway-style deal’?

The Labour Party has made it clear that it will not support the ‘Great Repeal Bill’ in its current form. It was reported last week that at least 15 Conservative MPs are in talks with a group of Labour MPs about a deal which could keep the UK signed up to the principle of free movement after it leaves the EU.

The deal has been described as a ‘Norway-style deal’. But what does that actually mean?

Under the proposed plan, the UK would remain part of the single market post-Brexit, as a member of the European Economic Area (the EEA). It would continue to benefit from free movement of goods, without applicable customs fees. However, unlike EU member states which are bound by a common trade policy, under the proposed plan, the UK would have the freedom to negotiate its own free trade agreements with non-EU countries. In exchange, the UK would be required to apply largely the same free movement of people principles as EU member states.

Whilst per capita UK contribution to the EU would fall, there would still be a ‘fee’ involved in being a member of the EEA.

From the roughly 23,000 EU laws currently in force, the EEA has incorporated around 5,000 (roughly 21 per cent). If the UK joins the EEA, a number of EU policy areas would continue to apply to it, including financial services, social and employment laws, and energy and climate change policies. While the EEA Agreement includes provisions for non-EU members to be consulted on new legislation, the UK would lose its right of veto in the European Council.

Even though details of the Great Repeal Bill have now been published, it’s all still speculation as to what happens in the Brexit negotiations and what our relationship with Europe will look like going forward. Whilst there is a general consensus that our employment legislation will remain largely unaffected by Brexit, what happens to our immigration model is still anybody’s guess.

Stay tuned to our Blog for all employment and immigration Brexit updates.

Brexit: A ‘Norway-style deal’?

Good Work: Taylor Review on Modern Working Practices

The much anticipated independent review of modern working practices by Matthew Taylor, Chief Executive of the Royal Society of Arts, was published this week (11 July 2017).

The review suggests a national strategy to provide good work for all “for which government needs to be held accountable”.  It takes the following into consideration when it talks about “good work”: wages, employment quality, education and training, working conditions, work life balance, consultative participation and collective representation. Its key message is that everyone should enjoy a “baseline” of protection and be given routes to enable progression at work.

The full review can be accessed via the following link:

https://www.gov.uk/government/publications/good-work-the-taylor-review-of-modern-working-practices

Some of the key recommendations are set out below. It remains to be seen whether and when the government might implement any of them:

Worker status

  • Updating legislation to lay out exactly the legal tests for types of worker; this should no longer be by reference to case law.
  • Keep the distinction between employees and workers but rename workers who are not employees ‘dependent contractors’.
  • In relation to ‘dependent contractor’ status, the requirement that someone perform work ‘personally’ for an employer should not be relevant.
  • Place more emphasis on control in the definition of dependent contractor status. This should be “not simply in terms of supervision of day-to-day activities”.

Terms of employment

  • All employees and dependent contractors should receive a written statement of employment particulars at the outset of their job. This must cover their entitlements, how these are calculated,  and the method of payment.
  • Failure to provide such a written statement should entitle  all employees or dependent contractors to bring a claim for compensation.
  • Workers on zero hours contracts should have a right to request a contract that guarantees their hours after 12 months in the job.

Wages

  • The National Minimum Wage should be increased for hours that are not guaranteed.
  • The government should explore ways in which workers can negotiate for more guaranteed hours.
  • The twelve week reference period for holiday pay should be extended to 52 weeks;  to be fairer for those who have inconsistent work patterns.
  • Workers should have greater flexibility with their annual leave entitlement, including being able to receive ‘rolled-up’ holiday pay in real time.

Employment rights

  • It should be made easier for gig workers to demonstrate continuous service in respect of employment rights which demand a period of continuous employment before an individual is eligible.
  • Statutory sick pay (SSP) should become an employment right for all workers, and should accrue in the same way as holiday pay.
  • Returning from time off for sickness should be given the same protection as returning from maternity. This is conditional on the individual having engaged in the Fit for Work service.
  • The government should decide whether temporary changes to contracts could be requested by individuals, in particular where they have caring requirements.

Agency workers

  • Agency workers who have worked for the same hirer for 12 months  should have the right to request a direct employment contract with the hirer.
  • ‘Swedish derogation’ contracts should be banned.

Platform working

  • Companies using technology to commission work should use data so that workers can be given a guide as to their potential earnings. In this way workers can freely choose lower paid jobs knowing what they are likely to earn.
  • Piece-rate legislation should be altered so that workers who are rewarded on output should earn at least 20% more than the National Minimum Wage.

Employee voice

  • There should be a review of information and consultation regulations. These should be extended to include all types of worker and the threshold for implementation reduced from 10% to 2% of the workforce making a request.
  • Companies over a certain size should have to disclose their employment model. This would include information such as their proportion of zero hours contracts.

Tribunals and enforcement

  • Individuals should be able to have their working status determined by an employment tribunal without having to pay any tribunal fees. In addition, the burden of proof should be on the employer, rather than the worker.
  • Where employers have repeatedly ignored law, tribunals should be required to consider imposing “aggravated breach” penalties and cost orders.

Tax and national insurance

  • National insurance contributions for employed and self-employed workers should be moved “closer to parity”.
  • An increase in National insurance contributions from the self-employed should be accompanied by an associated improvement in both pension provisions and family-friendly rights for the self-employed.
  • Electronic platforms (e.g. Paypal) should replace cash-in-hand payment for jobs.

Career progression

  • The government should endeavour to work alongside employers who employ a high proportion of gig economy workers to see how they can benefit from the apprenticeship levy.
  • More workers in the gig economy should use ‘digital badges’ or other forms of accreditation in order to carry verified approval ratings with them if they work for someone else.

 

Good Work: Taylor Review on Modern Working Practices

The rights of EU citizens in the UK

The UK government’s policy paper setting out its offer to EU citizens and their families in the UK has been published. The offer is different depending on how long a person has been in the UK.

People who have been continuously living in the UK for five years will be able to apply to stay indefinitely by getting “settled status”. A settled status residence document will prove an individual’s permission to continue living and working in the UK. Those already with an EU permanent residence document will be required to apply. The application process should come online before the UK leaves the EU, and hopefully in 2018. The government has pledged to make the application process as streamlined and user-friendly as possible.

A “cut-off date” will be relevant for other people. The “cut-off date” will be the date after which EU citizens will no longer automatically be entitled to stay in the UK. The date is still to be negotiated, but may fall at any point between 29 March 2017, the date that Article 50 was triggered, and the date that the UK leaves the EU.

People who arrived in the UK before the cut-off date, but will not have been here for five years when the UK leaves the EU will be able to apply to stay temporarily until they have reached the five year threshold. They can then also apply for settled status as set out above.

People who arrive in the UK after the cut-off date will be able to apply for permission to remain after the UK leaves the EU, under the future immigration arrangements for EU citizens. We do not yet know what the arrangements will be. The government has said that there should be no expectation by this group of people that they will obtain settled status.

Please see our newsletter at the end of the month for more information on this development.

The rights of EU citizens in the UK

Transparency: Business champion calls for the publication of age data

Transparency seems to be the goal. The gender pay gap reporting obligations came into force on 6 April 2017. The Liberal Democrats have called for mandatory reporting on ethnicity pay gap. Now, Andy Briggs, the Government’s business champion for older workers, has called for organisations to publish age data, and to sign up to a “Commit & Publish” pledge to secure at least a million more employees over the age of 50 in the workplace by 2022. This is a target increase of 12 per cent and is proposed in response to an apparent skills gap in the economy.

A number of employers have already agreed to the pledge, including Aviva, Atos, Barclays and the Cooperative Group.

Employers should start to consider the logistics of wider data collection and analysis obligations, the potential reputational and legal risks of failing to report, and any associated litigation risks of analysis exposing a wide pay gap or statistics highlighting a skewed workforce in terms of age.

Transparency: Business champion calls for the publication of age data

The Taylor Review: a new right to request fixed hours?

Zero-hours contracts remain controversial and, last month, fast food chain, McDonald’s, confirmed that it will offer its workforce of 115,000 a choice as to whether to work fixed hours or remain on their zero-hours contracts. McDonald’s had previously trialled this arrangement and they found that only around 20% of staff chose to move to fixed hours, with the majority preferring the flexibility of the zero-hours arrangement.

There has been speculation that, inspired by the McDonald’s arrangement, Matthew Taylor’s highly anticipated review on the gig economy is likely to recommend a new right for workers on zero hours contracts to secure a guaranteed number of hours. It is expected that the right will be structured in a similar way to the right to request flexible working, with the employer maintaining the right to refuse the request for specific statutory reasons only.

The Labour party has pledged to ban zero hours contracts completely but the McDonald’s experience suggests that there may still be a place for them in the modern working environment.

The Taylor Review: a new right to request fixed hours?

Mental Health and the Equality Act

It’s a well known fact that mental health issues are capable of constituting a disability for the purposes of the Equality Act 2010 (the Act). However, to fall under the current definition of disability, the condition must have a “long-term” effect on the individual’s normal day-to-day activities. The Act provides that a condition will be regarded as long term if it has lasted, or is likely to last, for at least 12 months.

Accordingly, short term mental health issues, including conditions such as stress, anxiety and depression may not be covered by the Act and employees can find themselves without the layer of protection that the Act provides, including an obligation on the employer to make reasonable adjustments.

With statistics suggesting that 1 in 4 people in the UK will experience mental health problems each year, the Government is seeking to ensure that mental health issues are treated equally to physical impairments.

Last week, Health Secretary, Jeremy Hunt, suggested that, if elected, the Conservatives would amend the Act. Specifically, they would remove the requirement that to qualify for employment protection against discrimination on grounds of mental health an individual must have had the condition for a period of 12 months or more.

Given the prevalence of mental health issues, this announcement could be concerning for employers. Indeed, it is not unusual for employees undergoing a disciplinary or performance management process to be signed off due to stress, and the proposed changes could significantly affect the way in which employers will need to manage those employees. In light of the impact on businesses, notwithstanding the commitment from Mr Hunt, the Government would be likely to consult on any proposed changes before bringing them into effect.

Mental Health and the Equality Act

General Election countdown: Immigration – what’s next?

What’s going to happen to immigration in a post-Brexit era? That’s the million dollar question. Whilst there has been huge speculation as to what our immigration system and net migration figures are likely to look like going forward, little clarity has been provided as yet.

Following the leak of the draft Labour Manifesto, it has been reported that Jeremy Corbyn has agreed to toughen up his message on immigration. The Labour Party has acknowledged that free movement of workers is unlikely to be possible once the UK leaves the EU, but has stated that imposing new immigration controls will not be top of its list of priorities if it wins the election. It’s not really clear where that message leaves us when trying to predict what the new model is going to look like.

The Conservatives have indicated that they will stick by pledges made in David Cameron’s 2010 manifesto to cut migration to “tens of thousands”, despite having missed the target after making the same promise in 2010 and 2015. Again, it’s not clear from their rhetoric so far how they hope to achieve this, although Prime Minister May has reiterated that when we leave the EU we will have the opportunity to make sure we have control of our borders.

UKIP has gone one step further, as it is prone to do, pledging to cut net migration levels to zero within five years by asking skilled workers and students to get visas and banning migration into the UK for unskilled and low skilled workers. This time it’s not clear how UKIP intend to do the maths to achieve a net migration level of zero.

And then there’s the Liberal Democrats who are against stricter migration controls. Details of the party’s policies on migration are yet to be revealed but Tim Farron recently tweeted that “immigration is a blessing and not a curse”.

General Election countdown: Immigration – what’s next?

General Election countdown: Let’s get ready to rumble.

With just over three weeks until the General Election, the parties are getting ready to pack a punch. It seems that workers’ rights are high on the political agenda and likely to feature in all the main manifestos, official versions of which are (at the time of writing this post) yet to be released.

Prime Minister May has set out 11 key employment-related pledges and, not only has she guaranteed that all workers’ rights currently offered under EU law will be maintained in spite of Brexit, she has also committed to building on these entitlements. Amongst other things she has pledged that the national living wage will rise “in line with average earnings by 2022”. Her “new deal for workers” is also likely to include a statutory right to a year’s unpaid leave to care for a relative, two weeks’ statutory bereavement leave in the event of the death of a child, “better rights for workers in the gig economy”, and a commitment that workers’ pensions will be given new protections from “irresponsible behaviour” by bosses.

The Labour Party and the Greens are committed to increasing the minimum wage to £10 per hour. Both Labour and the Liberal Democrats have pledged to end the 1 per cent pay cap on public-sector pay and to ensure that these workers receive pay rises in line with inflation if they win the election. Indeed Labour’s manifesto is due to boast a 20-point plan, including a pledge to scrap employment tribunal fees, banning zero hours contracts, repealing the Trade Union Act 2016 and introducing four new UK-wide bank holidays. And there’s also a focus on family friendly rights, with both Labour and the Liberal Democrats having made commitments to extend paternity leave entitlement.

Following the recent introduction of gender pay gap reporting, the Conservatives and the Liberal Democrats have both said that they would bring in mandatory reporting on ethnicity gaps for organisations with 250 employees or more.

What seems to be apparent from the pledges is that there is in fact a significant overlap between the parties’ positions on worker rights. Whatever happens at the General Election on 8 June, we can expect to see some significant developments in employment law over the course of the next term.

General Election countdown: Let’s get ready to rumble.

Dress code in the workplace: keep your high heels on!

The government has undertaken to produce new guidance on workplace dress codes this summer following a joint report published by the Petitions and Women and Equalities Committees (the Committees). The report called for urgent action to improve the effectiveness of the Equality Act 2010 (the Equality Act) in preventing discriminatory practices of dress at work.

The issue attracted the public’s attention last year when Nicola Thorp brought a petition to Parliament with more than 152,000 signatures supporting a change in the law on dress codes. Nicola was sent home from work for refusing to wear high heels on her first day as a temporary receptionist.

In response to the joint report, the government rejected calls to ban employers from forcing women to wear high heels. It stated that, while the Committees had uncovered practices which appeared sexist, unacceptable and potentially unlawful, a redress scheme already existed under the Equality Act. The government also rejected calls to increase fines for employers who have sexist dress codes, arguing the current fines of up to £30,000 for the most serious discrimination were “proportionate and fit for purpose”. A proposal to allow tribunals to issue injunctions banning sexist dress codes was also rejected.

For now, we await the government guidance on dress codes. Meanwhile, employers are encouraged to review whether their dress codes comply with the Equality Act.

Dress code in the workplace: keep your high heels on!

Matthew Taylor’s report on the gig economy – emergent themes

Matthew Taylor, former head of Blair’s Number 10 Policy Unit, is due to publish a report on the gig economy this summer. A number of themes have emerged from his interviews and discussions with the press to date.

His report will look at the following issues:

  • Security, pay and rights
  • Progression and training
  • Balance of rights and responsibility
  • Representation
  • Opportunities for under-represented groups
  • New business models

The report will emphasise that it is not just quantity of work that matters but also the quality of work. Mr Taylor wants to ensure there are greater opportunities for progression and fulfilment in the self-employed and worker economy. He wants to strengthen employee voice in the workplace.

His research will recognise that employers want clearer rules on how to determine self-employed, worker and employee status. To that end, it is likely to foreground the idea of the “dependent contractor” (a term currently used in Canadian law) as an indicator of worker status.

His investigations look into a diversity of self-employment roles, and will take account of differences between, for example, the construction and healthcare industries.

Finally the report will also disclose the extent to which tax treatment and social security rights are a big influence on employment trends. We can assume that Matthew Taylor saw the now cancelled tax reforms to self-employed workers as a step in the right direction. Although he cannot make recommendations on tax, he is likely to want to nudge tax treatment in an employee-friendly direction as well as recommend a strengthening of pension entitlements for those working in the gig economy.

Matthew Taylor’s report on the gig economy – emergent themes