Employment Law Review - December 2020

Welcome to our December Employment Law update.

In our last update of 2020 we consider two recent cases on indirect age discrimination and a High Court decision helping ensure gig economy workers are adequately protected from health and safety risks in the workplace. As effective COVID-19 vaccinations are rolled out across the UK, we also share our views on whether employers should encourage or even mandate staff to take up the vaccine. And as always, we highlight important developments that you need to know from the last month.Lastly, in case you missed our annual update you can watch our Employment and Immigration experts here with a round-up of the key, COVID-free, legal developments of 2020.

Furlough extension

The Chancellor has announced yet another extension to the Coronavirus Job Retention Scheme (Furlough Scheme) which will now be available until 30 April 2021. Importantly for employers, the Government has confirmed that it will continue to pay 80% of wages until the end of April; the Government contribution will not reduce at the end of January 2021 as previously suggested.In view of Brexit uncertainties, this announcement gives businesses a much needed element of stability over the next few months. The Chancellor has also confirmed that any further COVID-19 economic support measures to protect jobs, will be announced on 3 March 2021 well ahead of the 45 day collective redundancy notice period. In light of this further extension to the Furlough Scheme, employers should consider reviewing ongoing or planned redundancy exercises to assess whether more employees are able to remain in employment. Please see Extended Coronavirus Job Retention Scheme for more details.

COVID-19 vaccinations: what employers need to consider

With businesses eager to get back to some semblance of normality, the question of whether employers can require staff to be vaccinated raises many legal and moral questions. See our Employer Q&A for some of the relevant considerations.

Justifying indirect age discrimination by balancing the books

The Court of Appeal decided that changes made to the rate at which probation officers progressed up a pay scale indirectly discriminated against younger employees, however this discrimination was justified as the new pay policy was implemented to 'balance the books'. This case may make it easier for employers to defend indirect age discrimination claims where the 'absence of means' is a key factor. Indirect age discrimination occurs where an employer applies an apparently neutral provision, criterion or practice (PCP), but that PCP puts individuals in a particular age group at a disadvantage. An employer can justify indirectly discriminatory treatment if it is a proportionate means of achieving a legitimate aim. It is well established that cost-saving alone without regard to other factors is not a legitimate aim and does not justify a discriminatory PCP. However, cost-saving together with some other factor may do so.In 2010 the probation service introduced a new pay policy in response to the wider public sector pay freeze which resulted in a slowing of pay progression. This had a disproportionate impact on younger employees, who would take longer to reach the top of the pay scale than older employees. The key question was whether this new, indirectly discriminatory pay policy, was justified as a proportionate means of achieving a legitimate aim.The Court of Appeal confirmed that discrimination cannot be justified "solely in order to save costs", but that cost can be balanced with other factors. The court went on to say that in this case the tribunal had been right to draw a distinction between an employer that is only trying to save costs, and one that needs to reduce expenditure due to budgetary constraints imposed by the Government. The latter being a legitimate aim. The new pay policy was considered a proportionate means of achieving that aim.There is a narrow distinction between cost-saving and the need to reduce expenditure combined with other factors. Whilst this case doesn't change established principles, it may be helpful for employers, particularly in this economic climate, to try and justify any measures taken to balance the books that may indirectly discriminate against a particular age demographic. 

Recruitment talent pool indirectly discriminated against older employees

The Employment Appeal Tribunal confirmed that an employer's policy to promote only from their 'Talent Pool' was indirectly discriminatory because older workers were significantly under-represented in that Talent Pool. Employers need to carefully consider the make-up of any talent pool for recruitment or promotion ensuring that access to the pool doesn't cause particular problems for someone with a protected characteristic. Mrs Ryan's employer had created a 'Talent Pool' of high-performing, talented employees to fill vacancies internally, reducing the need to interview external candidates and allowing roles to be filled quickly. Two managerial roles became available and the first was filled from the Talent Pool. Mrs Ryan was not considered for this role as she wasn't in the Talent Pool. Mrs Ryan expressed an interest in the second role, but was told that she could only apply if the vacancy was not filled from the Talent Pool. The second role was later allocated to an individual from the Talent Pool. Mrs Ryan brought a claim of indirect age discrimination. She argued that, by creating and promoting from their Talent Pool, the Trust operated an apparently neutral provision, criterion or practice that indirectly discriminated due to the under-representation of employees in her age bracket (55-70).The EAT considered that there was evidence to show that it was less likely that employees aged 55-70 would be in the Talent Pool, and this showed a group disadvantage. Mrs Ryan (in her mid-sixties) was also personally disadvantaged because she was not considered for roles which she otherwise would have been because her employer looked to fill vacancies from the pool. Talent pools for selection can be really helpful, particularly for large employers, as they reduce the cost of external recruitment and the time taken to fill vacancies. However, this case reminds employers that access to any talent, recruitment, or promotion pools or pathways should be carefully considered - ensuring that anyone with a protected characteristic is not directly or indirectly disadvantaged. 

Health and safety protection extended to gig economy workers

The High Court has ruled that workers are entitled to certain health and safety protections (such as the provision of PPE) and are also protected from being dismissed or subject to a detriment on health and safety grounds. This is a significant decision for any employers who place reliance on workers, especially in the gig economy. The Independent Worker's Union of Great Britain (IWGB) is a trade union which represents around 5,000 workers, including many lower paid couriers and private hire drivers in the gig economy. Workers do not have many of the same employment protections that employees do. Between March and May 2020 the IWGB received almost 150 health and safety concerns related to COVID-19, including a lack of PPE, failure to implement social distancing and failure to package COVID-19 samples correctly for transportation thereby putting drivers at risk. The IWGB considered that UK employment and health and safety law does not adequately protect workers against health and safety risks, in contrast to the protection available to employees. The IWGB sought a High Court declaration that the UK had failed to properly implement EU directives on health and safety and the provision of PPE, by limiting certain protections to employees only. The High Court agreed. It concluded that UK law only protects employees who, when faced with serious and imminent danger at work, are protected against detriment or dismissal for leaving work, proposing to leave, refusing to attend or taking appropriate steps to protect themselves or others in the workplace. The Government must now change domestic law to ensure workers, including those in the gig economy, are given the same health and safety protection as employees. Although the law has not yet been changed, employers should take steps to ensure they are prepared for when it does. This includes providing PPE to both employees and workers and considering changing workers' contracts to make their rights clear. Employers also need to ensure that any company policy on the treatment of workers is compliant and also bear in mind the potential for employment claims if they terminate or suspend a worker for taking steps to protect themselves from serious and imminent dangers to health in the workplace.

A ban on post termination non-compete restrictions?

The Government has recently launched a consultation on measures to reform the law on post termination non-compete clauses in contracts. Aimed at promoting innovation in the job market following the impact of COVID-19, the primary focus of the consultation is on non-compete clauses which are now commonplace in contracts for senior executives. The consultation seeks views on whether non-competes should be banned, time-limited, or compensated and whether business interests would be adequately protected if such reforms were implemented. The possibility of a complete ban may cause concern amongst companies who use them to protect their legitimate business interests and prevent harm to their business. If you would like to contribute to, or discuss the potential impact of the consultation on your business, please contact us. The consultation closes on 26 February 2021. 

Change to ACAS early conciliation  

Effective 1 December 2020, there is a standard six week ACAS early conciliation period for parties to conciliate prior to any tribunal claim being submitted (replacing the previous one month with a possible 2-week extension). This is a welcome simplification which gives more time in all cases for settlement discussions to take place potentially saving time, costs and the stress of litigation.

Minimum wage rates

The Government has recently accepted the Low Pay Commission's recommendations for new national minimum wage rates. The Chancellor has also confirmed that the living wage rate will be extended to 23 and 24 year-olds, having previously only applied to those aged 25 and over. The new rates are effective from 6 April 2021:

  • Living wage: 23 and over: £8.91 (up from £8.72)
  • 21-22: £8.36 (up from £8.20)
  • 18-20: £6.56 (up from £6.45)
  • 16-17: £4.62 (up from £4.55)
  • Apprentice rate: £4.30 (up from £4.15)

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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.

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