The Government has now published Guidance for the public and businesses on the period of National Mourning following the demise of Her Majesty Queen Elizabeth II. 

A period of National Mourning for her Majesty has now started and will continue until the end of the day of the State Funeral which will be Monday 19 September 2022. The Guidance recognises that ‘mourning is very personal and organisations may want to mark her passing in their own way.‘

At his Accession Council, King Charles III approved an Order that the day of the Queen’s funeral, 19 September 2022 to be declared a bank holiday for this year. This means that schools will be closed and businesses may decide to close (see below).

The legal position in relation to bank holidays is that there is no legal entitlement to them. The minimum legal holiday entitlement across all the UK is to provide 28 days (5.6 weeks) holidays which are historically derived from:

• 20 days (4 weeks) as required by the EU Working Time Directive and;
• 8 days (1.6 weeks) given by UK legislation.

Therefore, whether a business closes will depend on:

• if it wishes to do so, and as guidance states each business can make its own decision;
• if it is obliged to provide a day off for this additional bank holiday, which will wholly depend on the contractual position i.e. what business has agreed to provide in the employment contracts.

If the employment contract states:
‘You are entitled to 28 days holiday inclusive of bank/ public holiday.’ then there is no right to this extra day and it will be up to the business whether to provide it.

If the employment contract states:
‘You are entitled to [25] days holidays in addition to bank/ public holidays’’ then the Company has contractually agreed to it and there is an entitlement to the additional bank holiday.

Press Release issued by the Government confirms that there is no legal entitlement to the bank holiday, stating that it is ‘matter for discussion between individuals and their employer.’

The Press Release also states:
“The government cannot interfere in existing contractual arrangements between employers and workers. However, we would expect that many workers will be able to take the day off on the bank holiday. We also expect employers to respond sensitively to requests from workers who wish to take the day of the funeral off work.”

Should you have any query in relation to this communication please contact the Legal Team.

In a climate of labour shortages, poor staff retention and spiralling costs of living, one of the main barriers to employment identified by many parents is the lack of access to affordable childcare. In 2021, the NI Childcare Survey reported 54% of families facing challenges in accessing childcare, with a full-time childcare place costing on average £170 per week, leading many people to decide that work was not a viable option.

The Labour Relations Agency has this week launched its Employers’ Guide to Childcare, which was produced by working in partnership with Employers for Children and the Department for the Economy NI.

It is full of practical guidance to ensure employers and employees know exactly what financial support is available to assist working parents with their registered childcare costs and how it can be accessed, including:

• Child Tax Credit
• Childcare Vouchers
• Chid Benefit
• Tax-Free Childcare
• Universal Credit

This will greatly assist businesses who may be unaware of the government support which their employees can access to subsidise childcare costs, making childcare more affordable. It can also help businesses recruit and retain the staff they need. Employees value employers who acknowledge the challenges that balancing work and childcare responsibilities can bring; and  who can offer appropriate support and guidance.

With the help of the new guide, employers stand to benefit from:

• direct savings on employers National Insurance Contributions if offering Childcare Vouchers; and Tax and National Insurance savings if offering a workplace nursery;
• lower levels of staff turnover and absenteeism, which will result in increased levels of productivity and reduced training and recruitment costs; and
• positive public image which will attract new applicants.

The new guide is available to download from the Labour Relations Agency website (Toolkit section).  You need to register for access, but it is very easy to do.

Whilst employment law is devolved in Northern Ireland, tax is not. Therefore, this Call for Evidence is one that businesses who have employees working remotely or in a hybrid way will want to consider and those where the issue is relevant respond to the Call.

This is particularly so if your businesses has employees who reside in ROI but work in Northern Ireland.

The Office of Tax Simplification (OTS) has published a Call for Evidence: Review of hybrid and distance working

In the describing the context of the Call, it recognises that there has been a seismic change in working from home, with an expectation for flexible working conditions. It also recognises that it is important for business to offer that flexibility so that they can retain and attract talent.

The Call states that over forty jurisdictions already offer what is called ‘digital nomad’ visas which the countries use to attract mobile workers; many of these visas aimed at a tax-free stay for the visitor

However in the UK, the rules and guidance around employee expenses, and concepts such as a permanent workplace, seem designed for traditional ways of working.

There are a number of questions asked in the Call which cover the following areas:

• Employers – employees working in a different country to their employer
• Employers – employees based in the UK working remotely in the UK
• Self-employed
• Permanent establishment and corporate residence

The Consultation is open until 25 November 2022 and the response to it is expected to be published in the first quarter of 2023.

Liz Truss has been confirmed as the Prime Minister, defeating Rishi Sunak, and started in the position on 6 September 2022.

Liz Truss wants to see ‘more graft’ from British workers. It is reported that she is planning a radical overhaul of workers’ rights, which will see a review of the 48-hour working week and other legal protections such as holiday pay and equal pay.

It appears that the new PM also wants to tackle industrial action making it more difficult for employees to strike and take other industrial actions. Many of the unions have made statements including, when TUC general secretary Frances O’Grady who has insisted that Ms Truss should ‘come clean’ about her plans for a post-Brexit restructure of ‘hard-won workers’ rights.’ It remains to be seen whether this rhetoric which persisted during her hard-fought campaign against Rishi Sunak persists, particularly given that the next general election is due by January 2025 when she will be hoping to persuade the electorate that Conservative party should remain in power..

More will emerge in the weeks and days that follow about her plans but, at this very early stage, what might we expect to see from the new Prime Minister in terms of employment law?

As stated, with the next general election due by January 2025 so her time to make changes is limited.

Some initial thoughts:

Liz Truss said that ‘in a bid to increase competitiveness’ she will ‘remove the obstacles holding our country back.’

How she does this remains to be seen, but it seems she is:

• Keen to review existing workers’ rights derived from the retained European laws. This has been widely reported in the newspapers as her wishing to have ‘a bonfire of worker’s rights.’ It is believed this will include the abolition of 48-hour working week. Although in reality the 48-hour working week causes little issues for most businesses.
• Reviewing other existing EU Worker Protections such as those derived from the Working Time Directive and Acquired Rights Directive (TUPE).
• Tackling industrial action by making it more difficult for unions to take industrial action. Earlier this year, the in GB only the government already removed the ban on agencies supplying workers to fill in for employees who are taking part in industrial action and quadrupled Unions’ potential liability for calling unlawful strikes.
• Reversing the 1.25% increase to the National Insurance Contributions for working age employees, their employers and the self-employed, which took effect in April 2022.
• Planning a Review of IR35/ the Off-Payroll Working rules.
• Seeking to abolish public sector diversity and inclusion jobs.
• Planning tax cuts for business to support business with the current cost of living difficulties.
• Planning to support a short-term expansion to the Seasonal Workers temporary work route – giving overseas workers a visa to come to the UK to work in horticulture for up to six months – to extend beyond the current expiry date in 2024 and increase the number of visas available.

As employment law is devolved in Northern Ireland, how this will impact in Northern Ireland is debatable particularly as we currently have no functioning Executive with only caretaker Ministers in place.

A further question for Northern Ireland is how far the ‘dedicated mechanism’ under Article 2 of the Protocol could be used if there was any attempt to change some of these rules here. Article 2 entails a requirement to ensure “no diminution of rights safeguards and equality of opportunity” with respect to six EU Directives listed in Annex 1 to the Protocol.

In GB, the Insolvency Service confirmed in late August 2022, that there will be no criminal action against P&O Ferries in respect of the mass redundancies and the company’s failure to comply with the statutory requirement to provide advance notification of the redundancies to the Insolvency Services, (which is commonly referred to as submitting HR1), that took place on 17 March 2022.  A failure to notify is a criminal offence that may result in prosecution and a fine, on summary conviction, for the company and/or officer of the company.

This arose over the publicised sacking of approximately 800 P&O Ferries staff by pre-recorded message without the Company complying with this advance notification requirement. The Company’s Chief Executive, Peter Hebblethwaite, appeared before a joint hearing of the Transport and Business Committees to answer questions. Subsequent reports confirmed that the vast majority of those dismissed (perhaps understandably) had accepted settlements.

In Northern Ireland it was reported that between 60-70 employees were sacked in the same way. Here the same requirements apply but the notification is to the Department of the Economy. On 2 September 2022, Gordon Lyons, Northern Ireland Economy Minister announced that he had submitted a file to Public Prosecutions to consider a case against P&O.

It will be interesting to see if Northern Ireland Public Prosecutions finds there is realistic prospect of a conviction.

This very short EHRC Guide ‘Artificial intelligence in public services’ may help some understand the advantages and risks of using AI to make decisions in the workplace or the services they provide.

It explains that machine learning and automated decision-making are applied through a wide range of technologies in both private and public sectors.

Being EHRC, the focus is on AI and equality.

Sections include:

* Who this guide is for
* What this guide covers
* What is AI
* Benefits of artificial intelligence
* Risks of artificial intelligence
* UK government resources on AI

Although it is aimed at GB and general decision making in the public sector it’s helpful in starting to raise awareness about risks of AI Discrimination in making workplace decisions.

It recommends you develop a checklist to fit your own circumstances and suggests you may want to take the following steps:

1. Identify if and how you (or others on your behalf) use AI, and consider how the PSED applies

2. Collect equality evidence:

* Assess existing available information
* Look at external research
* Talk to staff, service users, equality groups and community groups
* Identify and address any data gaps

3. Review how the AI could affect people with different protected characteristics either positively or negatively

4. Assess the potential and actual impact by looking at the equality evidence and asking:

* Does the proposed or existing AI cause, or could it cause, discrimination?
* Does the proposed or existing AI help to eliminate discrimination?
* Does the proposed or existing AI contribute to advancing equality of opportunity?
* Does the proposed or existing AI affect good relations?

5. Use the results of the equality impact assessment when developing the new AI-related proposal or reviewing existing services (even if the AI was developed outside of your organisation):

* Do you need to make a big change or adjust the proposal or services?
* Can you continue or should you stop and remove the proposal or service?

6. Make sure you consider the results of the assessment carefully when making the final decision about the service or product and how it will be put in place

7. Keep records of decisions and how you considered the PSED (for example, minutes of meetings)

8. Publish the results of the assessment to support transparency

9. Train staff and make sure they understand their responsibilities

10. Continue to monitor the actual impact of the AI-related policy or service, reviewing and amending it as necessary

It is a growing area and that will raise its head increasingly so over the next 10 years and reminder that the computers are not always right….

We have received several queries following the Department of Health’s announcement that, from 22 August 2022, LFD tests would no longer be freely available to the public seeking clarification on what impact that change has on self-isolation periods and SSP.

In terms of self-isolation, Northern Ireland reduced the self-isolation period on 1 July 2022 so that persons were asked to isolate for 5 days (or 3 days if a child) if they tested positive for Covid. That guidance currently remains unchanged. However, businesses will recall that this is guidance only and not a legal requirement.

Unlike Great Britain, Northern Ireland extended the provisions allowing persons to be paid SSP if they are absent due Covid (for a further period of 6 months). These provisions are in place until 24 September 2022.

In those circumstances, SSP can be paid from day 1 provided the person isolates for a minimum of 4 days. We suspect that SSP will continue to apply in relation to any period of incapacity that commenced on or before 24 September 2022.

Given these changes, it may be that persons will not know that they are positive following withdrawal of free tests.

We recommend that businesses review any Covid risk assessment in place following these changes to ensure that the workplace remains Covid safe, particularly if you have vulnerable persons present in the workplace.

Employers across the UK were dealt another significant blow in the long running holiday saga of how holidays, and holiday pay, should be calculated, when the Supreme Court handed down its long-awaited judgment in the case of Harpur Trust v Brazel,  confirming  that part-year employees (and those working irregular hours) were entitled to 5.6 weeks’ paid holiday calculated in accordance with a 12-week reference period (now 52 weeks in GB).

Background

Mrs Brazel was a music teacher who worked on a zero hours contract with Harpur Trust. Although employed on a permanent contract, she did not get a yearly salary but was only paid for the times when she worked, which excluded the times the school was closed. Ms Brazel did not work every day, nor every week.

Ms Brazel complained about the method used to calculate her annual leave entitlement. The Trust relied on the calculation endorsed by ACAS, namely that for every day Ms Harper worked, she accrued 12.07% of that time as holiday. The Trust stated that this was a fair and proportionate reflection of the hours worked.

Ms Brazel stated that, as she was a permanent employee, her holiday entitlement should not be pro-rated, but she should receive 5.6 weeks paid annual leave as set out by the Working Time Regulations (WTR).  She argued that her annual holiday pay should therefore be calculated by working out her average weekly pay for the 12 weeks before the holiday (now 52-week reference period would have to be used) and multiplying it by 5.6 (the maximum amount of holiday anyone is entitled to under statute).

This would have effectively meant that Ms Brazel received proportionately more annual leave/pay than her full-time counterparts. The example used by the school was that a teacher who only worked one week in the year, and was paid £1000, would now be entitled to 5.6 weeks’ paid annual leave, at a cost of £5600.

Under the Working Time Regulations, accrual of annual leave can only take place in the first, and last year of employment.

Previous Judgements

Mrs Brazel brought a claim before the Employment Tribunal for unlawful deductions from her wages by underpayment of holiday pay.

The Employment Tribunal dismissed her claim, but the Employment Appeal Tribunal allowed her appeal holding that the statutory regime (under the WTR) required the use of the calculation put forward by Mrs Brazel. Harpur Trust appealed to the Court of Appeal, but their appeal was dismissed. The case was therefore further appealed to the Supreme Court.

Supreme Court Judgement

At the Supreme Court, both Brazel and Harpur put forward different methods for calculating holiday pay which included:

• Calendar week method
• Percentage method (relied on by Harpur)
• The worked year method (relied on by Harpur)

The calendar week method considered Ms Brazel’s entitlement based on the 3 terms she worked in the academic year and assumed she should be paid 1/3 of the 5.6 weeks entitlement per term (1.87 weeks). By using the calendar method, Ms Brazel said the school should have considered the average hours worked within the 12-week reference period to give average week worked and then multiply it by the hourly rate of pay. This then should be multiplied by the 1.87 weeks’ entitlement per term.

The percentage method involved taking the hours worked by Ms Brazel and applying the 12.07% principle, which had been adapted by many employers when calculating annual leave entitlement for atypical workers and which had been endorsed by ACAS.

The unworked year method involved calculating the proportion of a ‘full working year (46.4) that employees actually work, and pro-rating the entitlement for the weeks Ms Brazel actually worked, i.e., if Ms Brazel worked 0.73 of a full working year of 46.4 weeks then she was entitled to 0.73 of 5.6 weeks which equated to 4.09 which were to be paid at the rate of an average weeks’ pay.

The Supreme Court agreed with Ms Brazel, rejecting the Harpur Trust arguments and methods of calculating, confirming that:

• Workers/employees who work for varying hours during only certain weeks of the year but have a continuing contract throughout that year are deemed to be ‘part-year workers.’
• The amount of leave to which a part-year worker under a permanent contract is entitled is not required to be, and under domestic law must not be, pro-rated to be proportional to that of a full-time worker, i.e., part year workers are entitled to 5.6 weeks paid annual leave under the WTR.
• The Working Time Regulations were clear; and there was no need to overturn the statutory provisions to deal with atypical workers in a different way.
• A slight favouring of workers with a highly atypical work pattern is not so absurd as to justify the wholesale revision of the statutory scheme which the Harpur Trust’s alternative methods require.

The Supreme Court judgment confirmed, as expected, that the 12.07% accrual method to calculate both holiday and holiday pay that many employers use for workers and employees on part-year and zero-hours contracts is inconsistent with the WTR.  Whilst the WTD permits the pro-rating of holiday entitlement for part-year workers, the WTR clearly did not. As such, part-year, permanent workers in the UK benefit from this more favourable approach adopted by the legislators.

Whilst there is an obvious logic that paid time off from work should be in some way intrinsically linked to the time spent in work, this was not the decision of the Supreme Court, and we now have a system where non-working weeks are included for calculating accrued holiday entitlements but ignored when calculating holiday pay.

In summary:

• The holiday entitlement for a part-year, permanent contract, is not pro-rated to that of a full-year worker. The WTR only permits pro-rated entitlement of the 5.6 weeks in the first and last year of employment, in other words based on time passed not work done.
• Zero-hours and part-year employees on permanent contracts have an automatic right to 5.6 weeks holiday, regardless of the amount of time they work.
• What amounts to a ‘week’ will depend on the average hours worked in the preceding period, in accordance with the ‘calendar week’ method.
• For part-time employees who have normal weekly working hours, the judgment makes no difference as their 5.6 weeks’ holiday will continue to reflect their normal working hours within a week.

Commentary

Whilst aspects of the Supreme Court’s judgement are clear, there are still a number of unresolved matters. Is the 12.07 % accrual approach still lawful for zero-hours workers treated as employees only for the purposes of each assignment they undertake? We expect that it is.

The next big issue is how do you express holiday entitlement in terms of days or hours? If a worker works a different number of hours or days each week, how does the employee quantify their annual leave entitlement or the appropriate rate of pay?  The answer isn’t clear and the WTR are silent on the matter. Employers are being pointed to the BEIS Guidance ‘How to calculate holiday entitlement for workers on different types of contract (available here). For example, if the average week is 2 days long, then a day’s holidays is 0.5 of a week. It should therefore attract 0.5 of a week’s pay and 5.6 weeks holiday entitlement should be reduced by 0.5 in the same way.

Although the widespread perception is that this decision only has ramifications for the education sector, this is not the case. Employers who permit employees to work ‘part-year’ such as term time, may also be falling foul of the regulations if they have been reducing an individual’s holiday leave entitlement to reflect the hours worked and not the minimum 5.6 weeks as set out by the regulations.  Therefore, all employers are encouraged to review their existing holiday pay arrangements to understand what impact, if any, this judgment will have, particularly as there is no 2-year backstop for employers in Northern Ireland for backdated holiday pay claims where there is a series of continuing deductions.

There is widespread speculation that the Working Time Regulations are ripe for review post Brexit. This decision may prompt a growing momentum from employers and industry bodies for legislative change.

On 15 July 2022, the government confirmed that it would bring into force the Neonatal Care (Leave and Pay) Bill, which has been introduced by way of a Private Members’ Bill.

Under the Bill, which is currently passing through Parliament, neonatal care leave will apply to parents of babies who are admitted into hospital up to the age of 28 days, and who have a continuous stay in hospital of seven full days or more.

The Bill will allow parents up to 12 weeks of paid leave, in addition to their maternity leave, paternity leave, adoption leave, shared parental leave, parental leave and parental bereavement leave if their baby has been born prematurely or sick, and is receiving neonatal care in a hospital or other agreed care setting.

Neonatal Care Leave will be available to employees from their first day at work. However, it will only be paid if the parents meet certain conditions. This includes having 26 weeks’ continuous service and normal weekly earnings for the period of 8 weeks, ending with the relevant week, being not less than the lower earnings limit in force.

The Bill, should it receive Royal Assent, will be a huge boost for parents across GB whose babies require specialist care after birth. The position in NI remains to be seen as the substantive part of the Bill does not extend to Northern Ireland. Employment law is a devolved matter in NI so it will be interesting to see if NI will adopt similar laws going forward.

The Government has this week published a response to the Employment Status Consultation, which sought to explore employment status reform and alternative approaches that might better provide individuals and businesses with greater certainty and clarity in this regard.

The uncertainty around employment status has long caused confusion for businesses and individuals alike. With the growth of the gig economy and more flexible ways of working, the lines have become increasingly blurred.

Why does this matter? Employment status is core to both employment law and the tax system. It  determines an individual’s rights, as well as the taxes that they and the business they work for, or with, must pay. For tax purposes, there are two statuses – self-employed and employed. For rights purposes, there are three statuses – self-employed, limb (b) worker, and employee.

In practical terms, workers enjoy rights which the self-employed do not, such as the right to receive the minimum period of annual leave under the Working Time Regulations, and the right to be paid National Minimum Wage. Employees, in turn, enjoy protections which workers do not, such as the right of qualifying employees not to be unfairly dismissed and the right to receive statutory redundancy payments.

The complexities around employment can often result in difficulties for employers and unfair treatment of employees, and it unsurprising that there has been significant support for reform. It would appear, however, that the Government disagrees. Despite recognising that the boundaries between the different statuses (employee/worker/self-employed) can be unclear, and that there is much support for reform, the Government has decided not to do so. The reasons for not reforming include:

• No overall consensus on what action the Government should take;
• Benefits of reform outweighed by risk associated with reform;
• Might bring clarity in the long-term but cost in the short-term;
• Need to focus on recovering from the pandemic;
• Uber Supreme Court judgment has provided more clarity about the approach.

Instead, the Government has issued 3 Guides which it states, ‘will act as a one-stop-shop for individuals and businesses to understand which employment rights apply to them.’ The Employment Status and Rights Guides include:

• Guidance for HR Professionals, Legal Professionals and Other Groups
• Checklist for Employers and Other Engagers
• Employment Status and Rights: Support for Individuals

It is somewhat disappointing that the Government has failed to grasp this opportunity to simplify employment status, and the reasons provided by the Government for doing so are not particularly compelling. However, with reform unlikely in the immediate future unless a different government comes in and takes a new approach, businesses will have to rely on the three accompanying Guides in the interim.

Whilst employment law is devolved in Northern Ireland and the Guides only apply to England, Scotland, and Wales, they will undoubtedly be useful in Northern Ireland in seeking to understand and define the working relationship. In particular, the Checklist for Employers and Other Engagers will likely prove to be very helpful for Members.

The full Government Response can be accessed by clicking on this link: Employment Status Consultation Government Response