Category Archive: Employment

Brexit: Latest developments on the future of EU nationals working in the UK

Employers who are monitoring the latest Brexit negotiations on the future status of EU nationals working in the UK may welcome the reassurance delivered by the Prime Minister in Florence recently that it remains one of her ‘first goals…. to ensure that [EU citizens] can carry on living…as before’, and that ‘the guarantee on….rights is real’.

The Prime Minister says that ‘significant progress’ has been made, and this appears to include a concession that the UK courts will be able to take into account judgments of the European Court of Justice with a view to ensuring consistent interpretation around underlying EU law.  The UK is also offering to guarantee rights of return for settled EU citizens in the UK, who leave the UK, in return for the same rights for UK nationals living in the EU.

In practical terms, however, for now little has changed in relation to the impact of EU nationals currently working in the UK.  Home Office advice remains that there ‘is no need for EU citizens living in the UK to do anything now’, although individuals are encouraged to sign up for the email alerts so that they can be notified of any developments as they happen.

The Government’s proposals for the new immigration regime were outlined in June 2017, and it says that it will now be engaging on the design and delivery of a proposed Settlement Scheme, which it is committed to making as streamlined and user friendly as possible.

Employers therefore need to keep a watching brief to ensure they understand the latest developments and the potential impact on any EU nationals in their workforces.

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Draft Data Protection Bill published

Yesterday the Government published the draft Data Protection Bill which will replace the Data Protection Act 1998, supplement the General Data Protection Regulation in certain areas and provide more detail on how the GDPR will be enforced in the UK . DLA Piper’s Privacy team has published a blog post on their Privacy Matters blog which explains the key provisions of the Bill.

The Bill will have a significant impact on how employers deal with HR data. We will be publishing a further alert on these aspects of the Bill early next week.

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Monitoring employees: Guidance on privacy in the workplace

The recent decision of the European Court of Human Rights in Barbulescu v Romania (see our Be Aware blog post of 7 September) has placed the spotlight once more on the extent to which employers are permitted to monitor their employees’ communications and activities.

The adoption of new information technologies in the workplace allows for systematic and potentially invasive monitoring, enabling employers to track employees not just in the workplace but potentially in their homes through many different devices including smartphones, tablets and wearables. The boundaries between work and home have  become more blurred as more employees work remotely using their employer’s equipment, or bring their own devices to work. Monitoring of individuals at work can increasingly shade into monitoring in a private context. A further risk comes from the over-collection of data such as WiFi location data; analysis of meta-data may allow for invasive detailed monitoring of an individual’s life and behaviour. Such new technologies create significant privacy challenges. Whilst data privacy and human rights legislation do not prevent employers from monitoring workers, employers should remember that workers are entitled to some privacy at work.

The General Data Protection Regulation (GDPR), which comes into force in May 2018, will significantly raise the stakes for employers to ensure that their monitoring systems stay on the right side of the privacy line. With this in mind, on 8 June 2017 the EU Article 29 Working Party on data protection adopted a new Opinion on data processing at work. Whilst primarily concerned with employers’ current obligations regarding monitoring the Opinion looks forward to the additional obligations which will be placed on employers by the GDPR.

In order to process personal data in the employment context, the employer must have a legal basis for doing so. Processing of special categories of data (usually referred to as sensitive personal data) is prohibited unless an exception applies; if such an exception applies, the employer must still have a legal basis for processing the data.  The Opinion emphasises that for the majority of processing at work, including monitoring, the legal basis cannot and should not be consent. Consent is generally not valid in the employment context as it cannot be freely given due to the real or potential prejudice which will usually arise from the employee not consenting.

Employers will more commonly be seeking to rely on the processing being necessary for a legitimate interest as the legal basis. Where the employer relies on legitimate interest, the processing must also be proportionate and should be carried out in the least intrusive manner possible. Specific mitigating measures should also be put in place to ensure a proper balance between the legitimate interest of the employer and the rights of employees; such measures might include only monitoring in certain areas, or avoiding monitoring sensitive areas such as changing rooms, avoiding monitoring of personal communications and undertaking spot check rather than continuous monitoring.

Employees must be informed of the existence of any monitoring, the purposes for which personal data are processed and any other information necessary to ensure fair processing. The information requirements under the GDPR will be more detailed and specific.

In order to comply with GDPR, employers as data controllers are required to implement data protection by design and default. An example of the impact which this has on workforce data is that where an employer issues devices to employees, the most privacy-friendly solutions should be selected if tracking technologies are involved.

The Opinion addresses a number of data processing at work scenarios in which new technologies have the potential to result in high risk to the privacy of employees:

  • Processing during recruitment

Employers should not routinely  inspect the social media profiles of prospective candidates during recruitment processes. Such information should only be reviewed if it is necessary for the job, for example in order to be able to assess specific risks regarding candidates for a specific function. Candidates must be informed if social media information will be reviewed during recruitment.

Data collected during the recruitment process should generally be deleted as soon as it is clear that an offer of employment will not be made or not be accepted.

  • Processing during in-employment screening

Similarly, in-employment screening of employees’ social media profiles should not take place on a generalised basis. Employees also should not be required to use a social media profile provided by their employer; the option of a ‘non-work’ profile must be available.

  • Monitoring ICT usage in the workplace

Technological developments have enabled newer, potentially more intrusive and pervasive ways of monitoring employees’ ICT usage. The Opinion suggests that as good practice employers should offer alternative unmonitored access to communication technologies where employees can exercise their legitimate right to use work facilities for some private usage. Employers can implement an “all-in-one” monitoring solution for all ICT usage in the workplace, for example applications to decrypt and inspect secure traffic to detect anything malicious that can also record an employee’s online activity on the network. The employer can rely on legitimate interests to protect the network, however monitoring every online activity of employees is an interference with the right to secrecy of communications. A policy should be developed and made easily accessible concerning the purposes for which, when and by whom suspicious log data can be accessed and to guide employees about acceptable and unacceptable use.  If it is possible to block websites rather than continuously monitoring communications, blocking should be chosen. Prevention should be given more weight that detection – it is in the employer’s interest to prevent internet misuse rather than detecting it.

  • Monitoring ICT usage outside the workplace

ICT usage outside the workplace has become more common with the growth of home and remote working and ‘bring your own device’ (BYOD) policies. These technologies can pose a risk to employees’ private lives as workplace monitoring extends into the domestic sphere.

In respect of remote and home working, the use of, for example, software which logs keystrokes and mouse movements or captures screenshots, logging of applications used and remotely enabling webcams will be disproportionate.

In respect of BYOD policies, appropriate measures must be in place to distinguish between private and business use to prevent monitoring of private information.

Where employees are provided with wearable devices which track health information, processing of the data by the employer is prohibited as it falls within a special category of data. The health data should only be accessible by the employee.

  • Time and attendance data

Systems that allow employers to control who can enter their premises or restricted areas can also allow the tracking of employees’ activities. New technologies may also process biometric data. Employees must be informed about any such processing and continuous monitoring of entrance and exit times cannot be justified for purposes such as performance evaluation.

  • Vehicle tracking

Any employer using vehicle telematics will collect data about the employee using the vehicle. Employers may be legally obliged to install some tracking eg for driver hours records and may have a legitimate interest in knowing where company vehicles are. However, use of such data should be proportionate. If private use of a vehicle is permitted, employees should have the opportunity to turn off location tracking where appropriate. The employer must also clearly inform employees that company vehicles are installed with trackers.

  • Disclosure of employee data to third parties

It has become increasingly common for companies to transmit employees’ data to customers for the purpose of ensuring reliable service provision. However, such data should only be provided if it is proportionate. For example, in the case of a delivery driver, the company might have a legitimate interest in transmitting information regarding the driver’s location to a customer, but not their name or a photograph.

Employers need to re-examine their employee monitoring systems and policies as part of their preparation for being GDPR-compliant.

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ECHR confirms that employers do not have green light to monitor employee emails

Further to our Be Aware post of 1 February 2016 on 5 September 2017  the Grand Chamber of the European Court of Human Rights overturned the Lower Chamber’s judgment in Barbulescu v Romania and held the dismissal of an employee after his employer monitored his Yahoo Messenger communications and discovered that he had used the internet for personal purposes had breached his Article 8 of the Convention on Human Rights right to respect for his private life and correspondence. This decision makes it clear that employers need well-drafted, well-communicated policies which  clearly explain what internet and social media usage is prohibited in the workplace and what measures the employer will take to monitor and control such usage.

The employer’s internal regulations prohibited personal use of computers  but did not contain any reference to the possibility that employees’ communications would be monitored. The employer undertook monitoring of Mr Barbulescu’s Yahoo Messenger account, including both the frequency and content of personal communications. Mr Barbulescu unsuccessfully challenged his dismissal in the Romanian courts, arguing that the employer had breached his Article 8 right to respect for his private life and correspondence. He then brought a claim in the ECHR, arguing that the domestic courts had failed to protect his Article 8 right. In 2016 the Lower Chamber dismissed his claim, holding that Mr Barbulescu had no reasonable expectation of privacy in his communications at work. The national authorities had struck a fair balance between his right to respect for his private life and the employer’s interests. Mr Barbulescu then took his case to the Grand Chamber, who disagreed with the Lower Chamber.  The Court considered that it was clear that Mr Barbulescu had been informed of the ban on personal internet use, but not so clear that he had been informed about the monitoring before it took place, particularly about the possibility that the employer might have access to the content of communications. The Court considered that when domestic courts are considering the proportionality of employer monitoring of communications, the following factors should be taken into account:

  • Whether the employee has been notified of the possibility that the employer might take measures to monitor correspondence;
  • The extent of the monitoring and the degree of intrusion into the employee’s privacy. A distinction should be made between the flow of communications and their content;
  • Whether the employer has provided legitimate reasons to justify monitoring the communications and accessing content
  • Whether it would have been possible to establish monitoring based on less intrusive methods;
  • The consequences of the monitoring; and
  • Whether the employee has been provided with adequate safeguards.

In this case, the Grand Chamber found that the court’s conclusion that a fair balance had been struck between the employee’s rights and the employer’s interests questionable. The Grand Chamber considered that the Romanian courts did not protect Mr Barbulescu’s Article 8 rights.

This decision makes it clear that if employers want to monitor and restrict personal use of the internet and other communications at work, the policy must make it clear what is or is not permitted and must inform employees of any monitoring which will take place. Restrictions and monitoring should be proportionate; the Grand Chamber noted that an employer’s instructions cannot reduce private social life in the workplace to nothing.



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Brexit: Update on future rights of EU citizens in the UK

In an update to our Be Aware article of 12 July 2017, Government publishes proposals for EU nationals, the UK and the EU have just concluded the latest round of their Brexit negotiations which will be of interest to employers who are monitoring developments as part of a communications strategy for keeping EU nationals in their workforce informed of the latest position.

In this latest round of negotiations, the Home Office has reported that progress has been made in relation to the rights of EU citizens living in the UK and UK nationals in the EU.  In particular, the UK has agreed to protect the rights to reciprocal healthcare, including European Health Insurance Cards (EHICs) for EU citizens in the UK and UK nationals in the EU who are present on the day of exit.  The UK and EU have also agreed to protect the rights of some cross border workers and are also said to be nearing a deal on preserving professionals’ rights to practise after Brexit.

Many issues remain outstanding, however. These include agreement on the rights of EU national posted workers, some aspects relating to permanent residence including the need to apply for a new residence document, and the rights of future family members.  This table highlights progress to August 2017.

The next round of negotiations is due later in September 2017.  In the meantime, the Home Office’s webpages, Status of EU citizens in the UK: What you need to know hold the latest information.

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Government publishes Statement of Intent on proposals for new data protection laws

On 7 August 2017, Government publishes its Statement of Intent (SoI) on ‘A new Data Protection Bill: Our planned reforms’. The SoI states that implementation of the GDPR and repeal of the Data Protection Act (DPA) will be done in a way that so far as possible preserves the concepts of the DPA to ensure that the transition for all is as smooth as possible while complying with the GDPR in full.

The Government has 3 main objectives in its approach to data protection law as we prepare to leave the European Union – (1) Maintaining trust; (2) Future trade; and (3) Security.

DLA Piper’s Data Privacy team has published a blog on the SoI here. The key aspects from an employment perspective are as follows:

Rights of individuals

The Bill aims to better protect UK citizens through a combination of new and strengthened existing rights:

  • Privacy – rules around consent are being strengthened and subject to additional conditions such as being unambiguous and easy to withdraw;
  • Improved data access – it will be easier for individuals to require an organisations to disclose the personal data it holds about them at no charge;
  • Right to be forgotten – individuals will be able to ask for their personal data to be erased; and
  • Profiling – individuals will have greater say in decisions that are made about them based on automated processing.

Requirements for organisations

Requirements will be strengthened or amended to reflect the changing nature and scope of the digital economy. The aim is to build accountability but with less bureaucracy – administrative and financial burdens will be alleviated but there will be increased requirements for data breach notification. The Bill will help to reduce business exposure to risk of data protection breaches and associated fines and reputational damage and will provide a clearer regime for data processing.

Regulator’s powers

The Information Commissioner will retain existing powers and gain additional authority to impose greater sanctions in the event of data breach.

Exceptions and derogations

The Government conducted a ‘Call for views’ on the GDPR derogations which closed on 10 May 2017. The Bill will exercise the available derogations in the GDPR. The most notable are:

  • Giving consent to process data and protecting children online – children aged 13 or older will be able to consent to their personal data being processed;
  • Processing criminal conviction and offence data – the Government will legislate to extend the right to process personal data on criminal convictions and offences so as to enable organisations other than those vested with official authority to process criminal conviction and offences data. It will take a similar approach to that taken for the processing of sensitive categories of data.
  • Automated decision making – the Government will legislate to implement the exemption where suitable measures are put in place to safeguard an individual’s rights, freedoms and legitimate interests eg in relation to a bank check creditworthiness before agreeing to provide a loan; and
  • Research – research organisations will not have to respond to SARs when this would seriously impair or prevent them from fulfilling their purposes; they will not have to comply with an individual’s rights to rectify, restrict further processing and object to processing where this would seriously impede their ability to complete their work and provided that appropriate organisation safeguards are in place to keep the data secure.


The full detail of how the Government intends to implement the GDPR in the UK to ensure that data transfers to and from Europe post-Brexit are protected will not be clear until the text of the Bill is published. There are welcome indications that the Bill will deal with some aspects of the GDPR which could otherwise have been problematic for UK employers such as the prohibition on processing data about criminal records. It remains to be seen whether the Bill will deal with other problem areas such as the GDPR’s lack of exemptions to data subject access requests which could lead to employers being required to disclose privileged information. However, the SoI is helpful in further articulating the UK Government’s commitment to the adoption of the GDPR both pre- and post-Brexit.

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Holiday pay must include payment for any voluntary overtime normally worked

In the latest instalment to the litigation surrounding the correct calculation of holiday pay, the EAT has held that payment for voluntary overtime that is normally worked is within the concept of ‘normal remuneration’ and should therefore be taken into account in calculating holiday pay for the 4 weeks of holiday provided for by the Working Time Directive (WTD). This is the first binding decision in England and Wales on the issue of voluntary overtime.

In Dudley Metropolitan Borough Council v Willetts and others, the tribunal considered whether a number of different payments should be treated as forming part of a worker’s ‘normal remuneration’ for the purposes of WTD holiday. Each of the following elements was in dispute i) out-of-hours standby pay; (ii) call-out allowance; (iii) voluntary overtime; and (iv) mileage or travel allowance.

In this case, the claimants were employed in a number of different roles with set contractual hours. However, the claimants were also able to volunteer to perform additional duties which their contracts of employment did not require them to carry out. In effect, they could drop on, or off, a rota to perform on-call and additional overtime work as they so wished, essentially to suit themselves.

The employment tribunal had held that, in line with previous case law, when calculating holiday pay it was required to take into account anything ‘required of the claimant under his contract of employment which is intrinsically linked to the performance of the required tasks’ but that it could not take account of ‘occasional or ancillary costs’.

Applying this to the facts of the case, the employment tribunal had found that out-of-hours standby pay and call-out allowances did form part of the claimants’ normal remuneration and should therefore be included in holiday pay. In relation to voluntary overtime, the employment found that it formed part of normal remuneration for employees who undertook it regularly. For travel allowances, the tribunal held that any part of the allowance which is subject to tax as a benefit in kind would be part of normal remuneration. These findings were appealed to the EAT.

The EAT upheld the findings of the tribunal. It said that EU law requires that normal (not contractual) remuneration must be maintained in respect of the 4 weeks’ WTD leave – the purpose of this requirement is to ensure that a worker does not suffer a financial disadvantage by taking leave which is liable to deter them from exercising their right to take that leave. The EAT said that the ECJ had confirmed that for payment to count as ‘normal’ it must have been paid over a sufficient period of time and that this is a question of fact and degree. Normal remuneration would not include items which are not usually paid or are exceptional.

The EAT said that the test for establishing ‘ normal remuneration’ is not solely dependent on a link between pay and the performance of duties required by the contract of employment; it said that, if there is an intrinsic link, that is decisive of the requirement that it be included within normal remuneration. However, it is a decisive criterion but not the, or the only, decisive criterion. An absence of an intrinsic link does not automatically exclude a payment from counting, a position which it said is supported by the fact that payments personal to an individual such as those relating to seniority and professional qualifications count for normal remuneration purposes even though they are not intrinsically linked to the performance of the tasks that the worker is required to carry out.

The EAT went on to say that excluding payments for voluntary work normally undertaken would amount to an excessively narrow interpretation of ‘normal remuneration’ which would risk a worker suffering a financial disadvantage which might then deter them from taking holiday. In a case where the pattern of work – though voluntary – extends for a sufficient period of time on a regular and/or recurring basis so as to justify the description ‘normal’ it will need to be included in holiday pay. It will be for the tribunal to determine whether any such payments are regular and settled enough to amount to normal remuneration.

In the alternative, the EAT said that even if an intrinsic link was required, that link did exist in this case; without a contract of employment the arrangements for voluntary overtime would not exist. The EAT said that once an employee started working a shift of voluntary overtime they were performing tasks required of them under their contracts of employment, even if there was also a separate agreement.

In relation to call-out allowances, the EAT again upheld the findings of the tribunal that these were normal remuneration; it said that if the payments are normally paid they must be included in holiday pay to ensure there is no financial disadvantage to the worker as a result of taking the leave. For out-of-hours payments, the EAT again held these should be included in normal remuneration, emphasising that the focus is on normal remuneration, and not the normal working week. It repeated that whether a payment is normal is a question of fact and degree and that questions of frequency and regularity are likely to be relevant. The EAT had no difficulty with concluding that a payment is normally made if paid over a sufficient period of time on a regular basis, even if it is not paid very frequently. The EAT said that it did not accept that if workers have the opportunity to take annual leave in weeks with no overtime or out-of-hours shifts this would mean they were not deterred from taking holiday. A deterrent effect could be inferred from the reduction in remuneration itself.

Impact for employers

The outcome of this case is not surprising, following the recent trend in case law on the correct
calculation of holiday pay. However, its binding status as an appellate level decision, does also bring
some clarity to the issue of the inclusion of voluntary overtime payments in holiday pay.

Employers may still face practical difficulties with some payments, however, in determining whether,
as a matter of fact and degree, they do constitute ‘normal remuneration’ and, if so, in then determining the appropriate reference periods to make the relevant calculations.

Employers will also need to consider carefully how holiday pay is dealt with in the employment particulars required by section 1 Employment Rights Act 1996, which states that the particulars relating to holiday pay must be ‘sufficient to enable the employee’s entitlement ….to be precisely calculated’.

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Supreme Court ends employment tribunal fees with immediate effect

Employment tribunal fees were introduced for the first time in July 2013, and have been subject to challenge ever since. Over the course of the last 4 years, UNISON has launched two judicial reviews, both of which were unsuccessful in the High Court.  In 2015, UNISON’s appeal to the Court of Appeal failed.   Leave to appeal to the Supreme Court was granted and, following a two day hearing earlier this year,   this long running saga finally ended today when the Supreme Court decided to unanimously uphold UNISON’s appeal.

UNISON had asserted, and the Supreme Court agreed, that the 2013 statutory instrument implementing employment tribunal fees (the Fees Order) is unlawful for three reasons:-

  • First, it restricts the right of individuals to be permitted access to justice. Such a restriction is only lawful if it can be shown to be a proportionate means of achieving a legitimate aim, a test which, the Supreme Court decided that employment tribunal fees do not satisfy.
  • Second, the Order is inconsistent with the primary legislation under which it is implemented and frustrates Parliament’s intention both to provide individuals with substantive employment rights and to provide an accessible and affordable venue in which to enforce those rights.
  • Third, the fees regime discriminates directly against women and there is no objective justification for this discriminatory effect.

Largely the arguments at the Supreme Court centred on whether or not the fees regime could be objectively justified.  That is to say, whether or not the regime pursued one or more legitimate aim and if the regime was a proportionate means of achieving those aims.  The Government’s aims in introducing fees included transferring a portion of the costs of the tribunal service to end users and encouraging people to use alternative services to resolve disputes. Although the Court accepted that these aims were legitimate, it fully upheld UNISON’s contentions that the regime was disproportionate. The Court found that the level of fees under the regime has acted as a deterrent to claims and imposed an unjustifiable intrusion into access to justice. As such, the Court declared the regime unlawful under both UK and EU law.

What happens next?

  • As a result of its decision, the Supreme Court has quashed the Fees Order, which means that, with immediate effect, fees will no longer be chargeable for claims in employment tribunals.   Naturally, this is likely to lead to a rise in the number of disputes between employers and employees which reach the employment tribunal.
  • The Government had previously given an undertaking to repay all fees paid under the regime from its July 2013 implementation date if the fees regime was subsequently found to be unlawful. The Supreme Court confirmed today that this undertaking will now be fulfilled.
  • Although this cannot be predicted with any certainty, it is possible that the Government may, in future, seek to implement a revised fee regime which takes account of the need for proportionality.     Given the outcome of the Supreme Court case, the Government may prefer to implement any new regime via an Act of Parliament, rather than using an Order.  This would, of course, require the regime to be debated and approved by Parliament; a process which would be likely to affect the shape of any new regime.

Update – 18 August 2017

On 18 August 2017, the Presidents of the Employment Tribunals in England/Wales and Scotland issued further case management orders lifting, with immediate effect, the stay (sist, in Scotland) on all claims or applications brought to the employment tribunal in reliance on the decision of the Supreme Court in R (on the application of Unison) v Lord Chancellor (Unison case).

Applications for reimbursement of fees, or for the reinstatement of claims rejected, or dismissed, for non-payment of fees, will now need to be made in accordance with administrative arrangements to be announced by the Ministry of Justice (MoJ) and Her Majesty’s Courts and Tribunals Service (HMCTS) shortly.  All other claims will proceed to be considered judicially in the usual way.

According to the Explanatory Notes to the Orders, the Orders have been made on the basis that the intentions of the MoJ and HMCTS in relation to the practical implications of the Unison case have become clearer and that it is expected they will be making an announcement in relation to the relevant administrative arrangements shortly – as a result, it is apparent that the reimbursement of fees and the reinstatement of rejected, or dismissed claims, for non-payment of fees will be dealt with administratively and almost certainly without the need for judicial intervention or judicial decision.

For now, therefore we must await details of the administrative procedures which will apply.   Reports suggest, however, that details of the refund scheme will not be published until September.

Update – 9 August 2017

By way of update, on 9 August 2017, the President of the Employment tribunals issued Case Management Orders ordering that all claims or applications brought to the Employment Tribunal in England, Wales and Scotland in reliance upon the decision of the Supreme Court in R (on the application of Unison) v Lord Chancellor  will  be stayed (sisted, in Scotland) to await decisions of the Ministry of Justice (MoJ) and Her Majesty’s Courts and Tribunals Service (HMCTS) in relation to the implications of that decision.  Anyone who wishes to make representations in relation to the further conduct of these claims or applications is ordered to apply to the Regional Employment Judge for the relevant Employment Tribunal region or, in Scotland, to the President of Employment Tribunals (Scotland).

The impact of these Orders appears wide enough to  include applications for refunds of fees and claims that were rejected or dismissed because fees were not paid. It may also cover new claims which had not been brought previously because of fees and in which an extension of time is now sought.  However, the Orders’ Preamble do have regard to rules 11 and 40 of the Employment Tribunals (Constitution and Rules of Procedure)  Regulations 2013 which relate to rejection or dismissal of claims for non-payment of fees (or absence of remission) which suggests that the scope of the Orders may be limited to reinstatement of claims that were previously struck out or dismissed for non-payment of fees.  We must now await the decisions of the MoJ and HMCTS.


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Government publishes proposals for EU nationals

After many months of speculation about the Government’s proposals for European nationals[1] currently living and working in the UK, the Government has now published its Policy Paper setting out its plans.  This is welcome news to employers employing European nationals in their workforce. Whilst the terms of the Policy Paper are still, of course, subject to negotiation with the EU (and an expectation that they will be reciprocated),  they do at least serve as a useful guide to the Government’s current stance.

It is critical that employers keep up-to-date with the latest information. During this period of uncertainty, reassurance of workers is likely to be key in order to prevent loss of talent and to ensure business needs can continue to be met. Employers should therefore have a plan for keeping on top of the latest developments and a communications strategy for liaising with their staff so that the workforce has accurate information about the latest position and knows where it can find out further details, both internally and from external sources.   Regular meetings and/or notices, and the appointment of a go-to person within the organisation are both likely to be helpful in this regard.

Here is a summary of the key proposals at this stage:

  • Until the UK leaves the EU, EU nationals will continue to have the same rights to live and work in the UK as they have now;
  • At this stage, EU nationals do not need to apply for any documentation to evidence their right to stay in the UK. The existing regime will be replaced by a new process. European nationals may decide to access this new scheme before the UK’s exit from the EU but they do not have to do so. The new scheme is expected to be up and running in 2018;
  • EU nationals, who have been continuously resident in the UK for at least 5 years by the cut-off date[2], will eventually be required to apply for a residence document (regardless of whether they already hold a certificate of permanent residence) which will be proof of their right to live and work in the UK. This residence document will give the individual a new ‘settled’ status;
  • EU nationals, with settled status and at least 6 years’ residence in the UK, will be able to apply for British citizenship;
  • EU nationals, who have been living in the UK for less than 5 years at the cut-off date, will eventually be required to apply for a temporary status to give them permission to remain in the UK. Once 5 years’ residence has been achieved, the individual will be able to apply for settled status;
  • The Government plans to grant a period of ‘blanket residence permission’. This means that immediately upon the UK exiting the EU, all EU nationals already lawfully living in the UK will be given time to apply for their new immigration status. The timeframe is to be confirmed but is expected to be up to 2 years, primarily to avoid a rush for applications;
  • Family members[3] (including non-EU nationals) of European nationals who are resident in the UK before it exits the UK will also be eligible to apply for settled status (if resident for 5+ years) or leave to remain (if resident for less than 5 years);
  • European nationals who come to live in the UK after the cut-off date will be subject to new rules which have yet to be confirmed. The Government has stated that whilst these EU nationals will be allowed to remain in the UK for a temporary period, they should not have any expectation of being guaranteed a right to remain in the UK;
  • The application process to establish immigration status will be modernised and streamlined, and fees will be set at a reasonable level;
  • For benefits purpose, European nationals with settled status will be treated in the same way as comparable UK nationals. European nationals with temporary leave to remain pending the achievement of settled status will be able to access benefits on the same basis as they do now (which is broadly comparable access for workers and limited access for those not working).

If you would like to discuss the impact of Brexit on European nationals in your workforce, or how we might assist with your internal communications strategy, please email Kate Hodgkiss.


Useful links:

Policy paper: Safeguarding the position of EU citizens living in the UK and UK nationals living in the UK (June 2017)

Policy paper factsheet: Rights of EU citizens in the UK (June 2017)

Government guidance: Status of EU citizens in the UK: What you need to know

Email alerts: Status of EU nationals in the UK

[1] In this article, European nationals denotes nationals of the EU, EEA and Switzerland

[2] The cut-off date has not yet been confirmed but is proposed to be no earlier than 29 March 2017, and no later than the date of the UK’s exit from the EU

[3] Family members include direct family members (spouse/civil partner, direct dependants in the descending line (under 21 or dependent), direct dependants in the ascending line) including those with retained rights and extended family members whose residence has been previously facilitated by the Home Office


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Taylor Review report into employment practices in the modern economy published

The Taylor Review’s final report on employment practices in the modern economy has been delivered to Government and published on 11 July 2017. The Review panel, chaired by Matthew Taylor, has made a number of recommendations for specific measures which the Review panel would like to see enacted as soon as possible, but also makes the case for longer term strategic shifts. As an overarching principle, the report issues a call to sign up to the ambition that all work will be good work as measured against six high level indicators of quality: wages; employment quality; education and training; working conditions; work life balance; and consultative participation and collective representation.

Seven key policy approaches

The Review sets out seven key policy approaches towards fair and decent work which underpin the panel’s recommendations, broadly as follows:

  1. Our national strategy for work should be explicitly directed toward the goal of good work for all. The same basic principles should apply to all forms of employment: there should be a fair balance of rights and responsibilities, everyone should have a baseline of protection and there should be routes to enable progression. Over the long term taxation of labour should be more consistent across employment forms whilst improving the rights of the self-employed;
  2. Platform-based working offers opportunity for genuine two-way flexibility and should be protected whilst ensuring fairness. Worker status should be maintained (but re-named dependent contractor’ status) but we should be clearer about how to distinguish workers from the self-employed;
  3. The law should help firms make the right choices and individuals to know and exercise their rights. Dependent contractors need additional protections and we need stronger incentives for firms to treat them fairly;
  4. The best way to achieve better work is responsible corporate governance, good management and strong employment relations rather than regulation;
  5. Everyone should feel they have realistically attainable ways to strengthen future work prospects through training;
  6. The UK needs a more proactive approach to workplace health; and
  7. The UK needs sectoral strategies to ensure that people are not stuck at the living wage minimum.

The report makes the following practical recommendations to further these principles:

Employment status

Determining employment status must be simpler, clearer and give individuals and employers more information.The report notes that how the law on employment status is interpreted varies widely and that legislation must do more to improve clarity. The report refers to the current tests and factors which determine employment status, namely personal service, mutuality of obligation, control and whether the individual is carrying out a business undertaking and suggest that if the Government considers these to be an accurate reflection of the main characteristics of employment status, they should be outlined in legislation. The detail underpinning these high level criteria should be specified in a way which can be updated quickly, such as secondary legislation or guidance.

Worker status

The Review favours maintaining the existing three-tier approach to employment status with employees, the self-employed and an intermediate status (currently worker) between the two but recommends re-naming the intermediate status as ‘dependent contractors’. There should also be a clearer distinction between employees and dependent contractors, with a clearer definition of dependant contractors which better reflects the reality of modern working arrangements. The report specifically recommends removing the requirement for personal service and giving control greater importance. Essentially, people working for a firm that has a controlling and supervisory relationship with them should have to treat them as workers.The report also recommends extending the right to a written statement of basic terms and conditions, including holiday, sick pay and pension, at the start of employment to dependent contractors and introducing a standalone right to bring a claim for compensation if the employer fails to do so.The report also recommends the development of an online tool to provide an indication of employment status similar to HMRC’s online tool for tax status.

The ‘gig’ economy

Recognising that the proposed change to the test for worker status would potentially bring many more individuals in the so-called gig economy within worker status, who would then become entitled to the National Minimum Wage (NMW), the report recommends changes to how the NMW is calculated in order to preserve flexibility. under this proposal, firms would not have to pay workers the minimum wage for every hour that they are, for example, logged onto a platform. Instead, Taylor is recommending that the Government adapt the piece rate legislation to enable platforms to compensate workers based on output provided they are able to show that the average worker receives 1.2 times the minimum wage, that workers can choose when they work and that they get real-time information about how much they are likely to earn on a shift.The report also recommends that Government should strongly encourage gig platforms to enable individuals to be able to carry approval ratings with them when they move from the platform.

Tax and the rights of the self-employed

The report recommends that renewed effort should be made to align employment status with tax status, and also calls for a debate about how labour is taxed. The employed are currently taxed more than the self-employed, which the Government had proposed to address by putting up national insurance contributions for the self-employed, until a backlash forced it to drop the idea in March. Taylor believes that the level of NICs paid by employees and the self-employed should be moved closer to parity, but that the self-employed should have additional rights, particularly to parental leave.

Zero hours contracts and casual work

The report does not recommend banning zero hours contracts, but does recommend that people engaged on zero hours contracts should have the right to request fixed hours with a starting assumption of the average hours worked over the previous 12 months. Companies should have to publish information about how many such requests are received and granted.The report also recommends that the Low Pay Commission should consider the introduction of a higher rate of NMW payable for hours which are not guaranteed as part of the contract.The report also recommends increasing the maximum gap between work assignments which will not break continuity of employment from one week to one month (or potentially longer in specific circumstances) to make it easier for casual workers to qualify for employment rights.

Paid holiday

The report recommends increasing the reference period for the calculation of holiday pay to 52 weeks so that casual workers receive holiday pay based on their average earnings over the year. The report also recommends that individuals should have the choice to be paid rolled-up holiday pay, meaning that a dependent contractor could choose to receive a 12.07% premium on pay rather than being paid during holiday periods.

Statutory sick pay and sickness absence

Statutory sick pay should be reformed so that it is explicitly a basic employment right for which all workers are eligible regardless of income from day 1, payable by the employer and accrued on length of service. Employers would no longer face liability for long periods of paid sick absence for those who have only worked for them for a short period, but many more workers would be entitled to receive SSP.The report also recommends that individuals with a relevant qualifying period should have the right to return to the same or a similar job after a period of prolonged ill-health, similar to the current protection for employees returning from parental leave.

Agency workers

The report recommends that agency workers should have the right to request a direct contract of employment with the hirer if they have been placed with the same hirer for 12 months, with the hirer required to consider requests reasonably.The report also recommends removing the so-called ‘Swedish derogation’ from the agency workers regulations. At present, if the agency engages an agency worker on terms which provide for payment between assignments, the agency worker is not entitled to be paid the same as a permanent member of staff doing the same job after 12 weeks.

Family-friendly rights and flexible working

The report recommends that the Government should review and consolidate guidance on the legislation which protects workers who are pregnant or on maternity leave and consider further options for legislative intervention on pregnancy and maternity discrimination.The Government should also consider how to further promote genuine flexibility in the workplace, for example whether the right to request flexible working should cover temporary changes to contracts.

Employee representation

The report recommends that the Government should examine the effectiveness of the Information and Consultation Regulations, extend them to cover workers and reduce the threshold for employee requests from 10% to 2%. Government should also work with Investors in People, ACAS and trade unions to promote development of better employee engagement and workforce relations.

Transparency and reporting

Government should require companies of a certain size to publish information to:

  • Make public their model of employment and use of agency services beyond a certain threshold;
  • Report on the number of requests received and agreed to from zero hours contract workers for fixed hours;
  • Report on the number of requests received and agreed from agency workers for permanent positions.

Enforcement and employment tribunals

Taylor recommends that there should be a new, fee-free procedure for workers to get a ruling on their employment status from an employment tribunal at an expedited preliminary hearing. The burden of proof should be reversed where status is in dispute so that the employer has to prove the individual is not entitled to the relevant employment rights.

The Government should also create an obligation on employment tribunals to use aggravated breach penalties and costs orders against employers who have already lost an employment status case on broadly comparable facts where further individuals bring claims. Government should allow tribunals to award uplifts in compensation if there are subsequent breaches against workers with the same or materially the same working arrangements.

The Government should take action to enforce tribunal judgments and establish a name and shame scheme for employers who do not pay tribunal awards within a reasonable time.

The report recommends that in the long term HMRC should take responsibility for enforcing holiday pay for those on low pay and the Government should consider whether unauthorised deductions claims should also be state-enforced. HMRC should also take enforcement action to stamp out unaid internships.

Next steps

Although the Queen’s Speech made no specific commitment to bring forward legislation to implement the Taylor Review’s recommendations, it is widely predicted that the Government will take action to implement at least some of the Review’s proposals. However, without a majority, legislation in this area may be difficult to push through. Speaking at the launch of the report today, the Prime Minister said “When I commissioned this report I led a majority Government in the House of Commons. The reality I now face as prime minister is rather different. In this new context, it will be even more important to make the case for our policies and our values, and to win the battle of ideas both in parliament as well as in the country“.

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