Employment Law Review – May 2020
Welcome to our May Employment Law Update
In this month’s bulletin, we highlight a new guide for employers on parental bereavement leave, an update on the Good Work Plan and amendments to the National Minimum Wage. There is also good news for employers, with an update on the Morrisons case relating to liability for a data protection breach, and another case in which Barclays was found not to be liable for sexual assault of an employer by a contractor. Finally, we provide an update on annual awards and payments.
Parental bereavement leave and pay is a new statutory entitlement that was introduced on 6 April 2020. The leave is time off to deal with the death of a child, if they die under the age of 18 or are stillborn.
Eligible parents will have a right to 2 weeks’:
- Statutory Parental Bereavement Leave, if they’re an employee
- Statutory Parental Bereavement Pay, if they’re an employee or worker.
The government has published detailed guidance to assist employers, which explains eligibility, employee notification obligations, rules for cancelling leave and pay, and employer administrative duties.
The right will apply to ‘parents’ – which has a broad definition for the purpose of accessing bereavement leave and pay. This can include a biological parent, an adoptive parent if the child was living with them, some persons with parental responsibility, an ‘intended parent’ (due to become the legal parent through surrogacy) and the partner of the child’s parent (if they lived with the child and the child’s parent in an enduring family relationship).
- Employers should make sure that their contracts and family friendly policies are up to date to reflect the entitlement to bereavement leave and pay.
- HR teams should also familiarise themselves with the government guidance and support line managers so that they are prepared for managing parental bereavement.
- Whilst 2 weeks is the statutory entitlement, employers may wish to consider implementing a more generous bereavement policy. Remember that ‘statutory’ just means the legal minimum an employer must give. Anything contractual in addition to statutory entitlement is at the employer’s discretion. This means that you have flexibility to consider how to enhance the policy: will you offer full pay for the 2 weeks, or perhaps a longer period of entitlement?
The full government guidance can be accessed here.
Several legislative changes to implement the government’s Good Work Plan came into effect on 6 April 2020. These include:
- Written statement of terms. The Employment Rights Act 1996 has been amended to give workers, rather than just employees, the right to a written statement of particulars of employment. If they have not been provided with a written statement of particulars upon commencing work, workers have the right to bring a tribunal claim against the company engaging them. Companies should ensure that workers starting on or after 6 April 2020 are provided with compliant written statements on or before their first working day.
- Holiday pay reference period. The Working Time Regulations 1998 have been amended, increasing the reference period for determining an average week’s pay (for the purposes of calculating holiday pay) from 12 weeks to 52 weeks, or the number of complete weeks for which the worker has been employed (if less).
- Repeal of the Swedish derogation. All agency workers now have a right to pay parity with comparable permanent staff after 12 weeks. Employers must therefore ensure that agency workers who have completed the 12-week qualifying period are paid amounts equal to other staff.
- Key information for agency workers. All employment businesses must now provide agency work-seekers with a key facts statement, before agreeing the terms by which the work-seeker will undertake work. This will need to include certain details such as the type of contract they are employed under, the minimum rate of pay they will receive and details of any fees that might be taken. This will help agency workers better understand their basic terms of engagement.
Employers should have ensured that they were fully compliant with the above from 6 April 2020.
The National Minimum Wage (Amendment) (No. 2) Regulations 2020 came into force on 6 April 2020.
These make a number of technical amendments to the National Minimum Wage. The most important changes are:
- Removal of “salary premiums” such as a London weighting, unsociable hours pay or bank holiday pay from the calculation of basic hours or annual salary pay; and,
- Permitting employers, by written notice, to change a calculation year for salaried workers in specified circumstances.
There is also a change where a worker purchases goods or services from their employer to comply with a requirement imposed by the employer (for example, purchase of a uniform). This will not be a reduction for NMW purposes if the employer reimburses the worker for the purchase or intends to do so. Additionally, payments paid by, or due from, a worker to their employer relating to expenditure in connection with their employment will not be a reduction if the employer reimburses the worker or intends to do so.
A worker’s calculation year depends on how frequently they are paid (e.g. monthly or weekly). For example, with monthly paid workers:
- If they start on the first day of a month, e.g. 1 May, their calculation year will be 1 May to 30 April in the following year while continuing in the same job
- If they start part way through a month, say 15 May, their calculation year will be 15 May to 31 May of the follow in year and then starting on 1 June ending on 31 May each subsequent year while continuing in the same job.
Employers are now able to change the calculation year for salaried workers (e.g. in order to align with other reference periods such as the tax year). In summary, employers can make this change as long as:
- They provide at least 3 months’ written notice, explaining the effect of the change;
- They do not receive a written objection from the worker;
- The worker’s calculation year has not already been changed within the period of 6 years ending with the first day of the new calculation year;
- They do not make any deductions from wages or require the worker to make a payment or work additional hours as a result of the change.
The Regulations go some way to addressing the difficulties experienced by employers in complying with the National Minimum Wage regime. In particular, they accommodate the different work payment cycles that workers have and seek to ensure that their pay is fair and complies with National Minimum Wage legislation. Employers will need to ensure compliance with these new measures from 6 April 2020.
The full government guidance which sets out the new scheme in detail is available here.
The Supreme Court, in the case of Wm Morrison Supermarkets plc v Various Claimants  UKSC 12 has held that Wm Morrison Supermarkets plc (Morrisons) is not vicariously liable for the actions of an employee who, without authorisation and in a deliberate attempt to harm his employer, uploaded payroll data to the internet using personal equipment at home.
The Supreme Court overturned the judgments of the High Court and Court of Appeal. It found that the circumstances in which the employee had committed the wrongful disclosure of payroll data were not so closely connected with acts which he was authorised to do that they could fairly and properly be regarded as having been done by him while acting in the course of his employment (the test to establish vicarious liability).
Although this was not relevant to Morrisons, the Supreme Court also found that, under the Data Protection Act 1998 (which was in force at the time), vicarious liability did apply to breaches of the obligations it imposed, as well as to breaches arising at common law and equity, committed by an employee who is a data controller acting in the course of their employment.
What this means for employers
This decision will provide welcome confirmation for employers that they will not always be liable for data breaches committed by rogue employees. Employers should take away from the judgment that although this case was decided under the previous data protection regime, the DPA 1998 and the GDPR are based on broadly similar principles. The GDPR and Data Protection Act 2018 (DPA 2018) will not be a barrier to vicarious liability actions in data privacy proceedings commenced under the current regime. The GDPR makes compliance far more onerous now for controllers who will run the risk of exposure to the significant revenue-based fines and data subject compensation claims for breaches of the GDPR and DPA 2018, if they fail to safeguard data to statutory standards and neglect to have governance in place to curb the malicious acts of rogue employees.
The Supreme Court has ruled that Barclays Bank is not liable for the numerous alleged sexual assaults committed by a self-employed doctor who had been contracted to conduct pre-employment medical examinations.
Around 126 current and former Barclays’ employees who had been examined by Dr Gordon Bates between 1968 and 1984 had been seeking damages from the bank, claiming that it should be held responsible for the abuse he allegedly committed.
Dr Bates, who died in 2009, was a self-employed medical practitioner and was contracted to conduct medical assessments of Barclays’ job applicants as part of its recruitment procedure. The examinations were conducted in a consulting room in his home and he was paid a fee for each medical report he produced. He was not offered a retainer by Barclays.
A tribunal judge and the Court of Appeal had previously held that Barclays was vicariously liable for any assaults that Dr Bates was proved to have perpetrated. However, the Supreme Court overturned these decisions, stating that an organisation cannot be held liable for the actions of an independent contractor that was carrying out business on their own account.
This judgment will come as welcome news to employers and other organisations engaging independent contractors, with its effect being to narrow the scope of vicarious liability compared with the earlier Court of Appeal decision.
At the beginning of April each year, employment related payment rates are adjusted, including national minimum wage, payments for time off work and tribunal awards limits. This April, as with previous years, all of these payments have increased slightly.
Notable increases are a rise in the national living wage to £8.72 per hour, the rise in ‘a week’s pay’ for the purposes of calculating tribunal awards and redundancy pay from £525 to £538 and the increase in the weekly rate of statutory sick pay to £95.85. The weekly rate of statutory maternity, paternity, adoption and shared parental pay has also increased to £151.20, and parental bereavement pay has been introduced at the same rate.
Remember that HR teams should keep adequate records of all payments so that they can show that their organisation has complied with their national minimum wage obligations. Policies and documentation should also be updated if they mention the rate of payments.
The key changes are as follows:
For a wealth of information relating to the current pandemic including the Job Retention Scheme, updates on health & safety and pensions questions, please visit Freeths’ Coronavirus Hub.
The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.
‘Doing the right thing’ is at the heart of Freeths. Find out more about our excellent client service and the strong set of values that guide the way we work.
Talk to us
Freeths are a leading national law firm with 13 offices across the UK. If you have a query about our services or just want to find out more, why not give us a call?
Contact: 03301 001 014