At these events we present an overview of what we consider to be the most significant developments in 2018, and what they teach us about managing your workforce – together with our practical tips. We also discussed what is coming up in 2019, and how you can get ready for what will be another busy year in employment law. Topics covered include: - case Law updates on worker status and the ‘gig economy’ - Brexit – Impact on EEA Workers - immigration - taxation and PILON Clauses - discrimination updatewWhistleblowing and Vicarious Liability updates - tribunal fees and the Law Commission Consultation - what's coming up in 2019 For further information and training visit our webpage - https://www.brownejacobson.com/sectors-and-services/services/employment

1. Birmingham
January 2019
Annual employment
law update 2019

2. Today’s Session
1. Employment Status – case law update on worker status and gig economy
2. Brexit and Immigration Update
3. Taxation and PILON Clauses
4. Discrimination Update
5. Whistleblowing Case Update
6. Vicarious Liability Case Update
7. Employment Tribunal Fees – Law Commission Consultation
8. Looking forward – 2019 and beyond…
1. Pay Gap Reporting
2. Harassment Code of Practice
3. Taxation and IR35
4. Legislative Changes

3. 1. Employment Status

4. Pimlico Plumbers Limited v Gary Smith 2018
(Supreme Court)
— Supreme Court held that Mr Smith who worked under a
contract describing him as an “independent contractor”
was in fact a worker
— Use of “you” and “your” indicated personal performance

5. Uber BV v Aslam & ors – Court of Appeal
- Last year we covered the ET decision in Aslam & Farrar v Uber and
the EAT’s decision to dismiss Uber’s appeal in November 2017
- Court of Appeal upheld the EAT’s decision on 19 December 2018 – Uber
drivers are to be properly regarded as workers BUT..
- Leave to appeal to the Supreme Court has been granted

6. Reform – the ‘Good Work Plan’
— Last year we looked at the Taylor Review that was published in July
2017 and its recommendations
— 17 December 2018, the Government announced it would take forward
51 of the 53 recommendations contained within the review report
— What do the proposals include?
– Changes to continuity of service
– Changes to holiday pay calculations
– Extending the right to a written statement of terms and conditions

7. Impact of Changes
— There is currently no draft legislation but the Government has introduced
the first three statutory instruments:
— The Employment Rights (Miscellaneous Amendments) Regulations 2019
— The Employment Rights (Employment Particulars and Paid Annual
Leave) (Amendment) Regulations 2018
— The Agency Workers (Amendment) Regulations 2019

8. So what?
— Clarity?
— Rise in claims?
— Less Flexibility/Increased pressure on Employers?

9. Brexit and Immigration Update

10. Brexit - the impact on EU citizens
— What is the EU Settlement
Scheme?
— What do we/our staff need to
do?
— What does our future look like?

11. EU Settlement Scheme
— To enable EU citizens and “close family” to live and work
permanently in the UK after Brexit
— Settled status
— Pre-settled status

12. Application process

13. Application process
— Indefinite Leave to Remain/Permanent Residence
— Fees:
– Adults - £65
– Children - £32.50

14. Key dates
Third phase trial
open to the public
21 January 2019
Scheme rolled out
fully
30 March 2019
Last Date for
Residency
31 December 2020
Last date for
application
30 June 2021

15. What if there is a no deal Brexit?
— Policy Paper published December
2018
— Commitment to the Scheme but
with some changes
— MPs vote on Brexit deal - 15
January 2019

16. Immigration post-Brexit

17. Immigration post-Brexit
— White Paper - published December 2018
— Outlines proposals for a new immigration system following the
Implementation Period
— End of free movement
— Applies to all migrants irrespective of nationality

18. The White Paper
— Published 19 December 2018
— Sets out Government’s plan for immigration after Brexit
— Key proposals include:
– requirement to obtain a Licence to Sponsor for all those employers who
want to recruit skilled workers
– scrapping current annual cap on the number of skilled workers coming to
the UK
– introduction of a temporary short-term visa
– the Immigration Skills Charge will be retained but reviewed

19. Implementation of changes
— Applicable from end of
Implementation Period
— Time intensive to plan
/legislate/consult
— Anticipate it will be in phases
and developed over next 12
months

20. What employers should do now
— Look at recruitment and training
strategy
— Communicate with employees
— Apply for a Sponsor Licence
— Participate in consultation
— Update right to work checks

21. Right to Work checks
— Update checks and review
systems in place
— Use the Employer Checking
Service

22. So what? Impact of the White Paper
— Salary pressures
— What about a no Brexit scenario?

23. 3. Taxation and PILON Clauses

24. Tax treatment of PILON clauses
— Contractual Provision no longer necessary
— As of 06 April 2018, all payments in lieu of notice will be subject to
income tax
— Complex calculation as employers are required to calculate how much
of the termination payment is taxable as earnings

25. Taxation
— Redundancy pay and enhanced redundancy pay taxed?
— Injury to Feelings Awards taxed?
– Moorthy v HMRC [2018] EWCA Civ 847

26. 4. Discrimination Update

27. Direct Discrimination
Chief Inspector of Education, Children's Services and Skills v
Interim Executive Board of Al-Hijrah School (Court of Appeal)
— Pupils in school were segregated by gender from Year 5
— Ofsted inspection rated school ‘inadequate’, because
segregation policy:
– constituted less favourable treatment for both boy and girl
pupils who could not learn and socialise; and
– was a particular detriment to girls as they had the minority
of power in society and amounted to an expressive harm by
implying that girls were inferior to boys

28. Direct Discrimination
Chief Inspector of Education, Children's Services and Skills v
Interim Executive Board of Al-Hijrah School (Court of Appeal)
— CoA held that that this was direct discrimination because:
– from perspective of an individual pupil, a girl pupil was
treated less favourably than a boy pupil and vice versa
– Each pupil was denied the opportunity to mix with the
opposite sex
– discrimination was based on protected characteristic of sex

29. Unfavourable Treatment
Awan v ICTS UK Ltd EAT 0087/18
— Claimant had a contractual entitlement to 6 months sick pay
followed by an entitlement to disability income of two thirds
of full pay “until the earlier date of your return to work,
death or retirement”
— Claimant was subsequently dismissed following a capability
procedure

30. Unfavourable Treatment
Awan v ICTS UK Ltd EAT 0087/18
— Respondent was in breach of implied term of the
contact that prevented dismissal on the grounds of
capability
— It is contrary to the purpose of a disability income
scheme if the employer may dismiss the employee
in the specific circumstances in which the benefit
would be paid.

31. Perceived disabilities & discrimination
Chief Constable of Norfolk v Coffey UKEAT/0260/16
— Claimant was a police constable in Wiltshire, who had some hearing
loss which placed her outside national standards for hearing loss
— On applying for a transfer to Norfolk Constabulary, her application
was rejected because she did not meet national standards
— Coffey brought a claim in the ET, asserting she had been directly
discriminated against on the basis of a perceived disability
— ET upheld the claims and Norfolk Constabulary subsequently
appealed to the EAT

32. Perceived disabilities & discrimination
Chief Constable of Norfolk v Coffey UKEAT/0260/16
— EAT held:
– ET had been entitled to hold that the decision amounted to
direct discrimination
– a person with the same abilities as Mrs Coffey, whose
condition the employer did not perceive to be likely to
deteriorate so that they would require restricted duties,
would not have been treated as Mrs Coffey was

33. Supreme Court defines ‘unfavourable
treatment’
Williams v Trustees of Swansea University Pension and
Assurance Scheme (and anor.)
— Williams retired due to ill-health at age 38 and received a
pension without any actuarial reduction
— Pension was calculated based on final salary
– this was a part-time salary, following earlier reduction in
hours due to his ill health
— Williams brought claim for ‘discrimination arising from
disability’

34. Supreme Court defines ‘unfavourable
treatment’
Williams v Trustees of Swansea University Pension and
Assurance Scheme (and anor.)
— ‘unfavourable treatment’ is not the same as ‘detriment’
— treatment which is advantageous to someone with a disability
cannot also be held to be ‘unfavourable’ because it is not
sufficiently advantageous

35. Discrimination on grounds of sexual orientation
Lee v Ashers Baking Company Ltd and ors 2018 IRLR 1116 (Supreme
Court)
— Christian owners of a baker refused to supply a cake (to Mr Lee who
himself was gay) featuring the message ‘Support Gay Marriage’
— SC held that this was not discrimination, because the bakery owners
objection was to the message on the cake rather than the sexual
orientation of the individual ordering the cake

36. Case Update - Whistleblowing

37. Reminder of the Law (1)
— Dismissal of an employee / worker automatically
unfair if the reason, or principal reason, for their
dismissal/detriment is that they have made a
"protected disclosure" (e.g. applies to locums too)
— No cap on compensation and no requirement for a
minimum period of service

38. Reminder of the Law (2)
— Must be a qualifying disclosure?
– Disclosure of information. The worker must make a disclosure of
information. Merely gathering evidence or threatening to make a
disclosure is not sufficient.
– Subject matter of disclosure. The information must relate to one
of six types of "relevant failure"
– Public interest the worker must have a reasonable belief that
the disclosure is in the “public interest”.
— And also a protected disclosure
– The identity of the person to whom disclosure is made.
Internal/external disclosure

39. Reminder of the Law (3)
— Good faith – requirement for the disclosure to be made in
good faith removed in the 2013 amendments to the legislation
meaning good faith is now only relevant to compensation
— Malicious complaints – honest but mistaken belief is
recognised in the case law; how do you prove malice and
what message does disciplining your staff send?

40. Reminder of the Law (4)
— Amendments to the law on whistleblowing
– strengthening law on recruiting whistleblowers
– Uncapped compensation
– Recommendations – additional penalties if these are not
complied with
– Potential for High Court action for breach of statutory duty
– including injunctions to restrain discriminatory conduct

41. So what?
— If not listened to internally people will make their voice heard
externally…so investigate + respond
— Review your own policies
— Train your staff
— Make it easy to raise concerns
— Have your internal/external “go to” investigators and keep
delay to a minimum

42. Financial and reputational risks
– No cap on compensation
– Stigma for whistleblowers = large compensatory awards
– Michalak v Mid Yorkshire Hospitals NHS Trust
– Mattu v University Hospitals of Coventry & Warwickshire
– Costly cases to litigate
– Damage to reputation
– Risk of being perceived as an organisation who seeks to
silence those who speak up

43. Timis and another v Osipov
— Director recommended summary
dismissal of Mr Osipov because
he had made a protected
disclosure
— The case clarified that in
relation to individuals, a
‘detriment’ includes dismissals
— So? Individuals may be personally
liable for losses sustained as a
result of dismissal

44. Case Update – Vicarious Liability

45. Various Claimants v Wm Morrisons Supermarkets
PLC(CoA)
— Mr S had published personal details of
100,000 employees on the internet
— High Court held that employers can be
vicariously liable for employee
breaches
— Court of Appeal upheld High Court
judgment

46. Bellman v Northampton Recruitment Ltd
— Assault by Managing Director at
impromptu post-party drinks
resulting in severe injury
— Are the company vicariously
liable?
— Yes, held the Court of Appeal

47. Winter v Hockley Mint Limited (2018)
— Is a business is responsible
for fraudulent
misrepresentations made
by its agent?
– Only if the deceitful
conduct was within his
actual or ostensible
authority

48. Bowen v Commissioner of Police of Metropolis
— Do employers owe a duty
to protect the economic
and reputational interests
of employees in vicarious
liability defence?
— No, held the Supreme
Court

49. 7. Employment Tribunal Fees

50. Employment Tribunal Fees
— Last year we looked at the Unison ruling which abolished Tribunal
Fees
— Since then, the following statistics have been reported:
– In September 2018, for the period April to June 2018, the number
of single ET claims had increased by 165%
– The outstanding case load has increased by 130%

51. Law Commission Consultation – further increase in
claims?
— Law Commission consultation on Employment Law Hearing Structures
– 54 questions posed include:
– Whether the Employment Tribunal’s jurisdiction should be extended
– Whether the time limit for bringing a claim should be extended from 3
months to 6 months “or some other period”
– Whether the £25,000 limit for breach of contract claims should be raised
or removed
— Closing date extended to 31 January 2019
— Impact?

52. So what?
— Fee re-introduction?
— “Proportionate and Progressive”?
— Watch this Space!

53. Looking forward – 2019 and beyond…
1. Pay Gap Reporting
2. Harassment Code of Practice
3. Taxation and IR35
4. Legislative Changes

54. 1. Pay Gap Reporting

55. Gender Pay Gap Reporting
— We discussed Gender Pay Gap Reporting last year and the
requirements
— Upcoming deadlines for this year are:
– 30 March 2019 Gender Pay Gap Reports (Public Sector)
– 04 April 2019 Gender Pay Gap Reports (Private and Voluntary
Sectors)
— Risks of Non Compliance?

56. Executive Pay Gap Reporting
Who does it cover?
– From 01 January 2019 UK listed companies with more than 250 UK
employees to report annually on the pay gap between their chief executive
and their average UK workers
– NB Employee is any person employed under a contract of service
– First reports due in 2020
Other details required?
– Action taken to improve employee engagement and consultation
– Impact of future share price on executive pay

57. Executive Pay Gap Reporting
Where must it be published?
– Own website until the company’s next financial year
Non Compliance?
– Directors may be liable on summary conviction to a fine
What to do now?
– Make appropriate people in the company aware of their obligations
– Start planning and looking at the figures now
– If in doubt, seek legal advice

58. 2. Sexual Harassment Code of Practice

59. 2. Sexual Harassment Code of Practice
— Government published response to Women and Equalities Committee
recommendations on 18 December 2018
— Detailed response includes:
– “Employers should take their preventative responsibilities more seriously”*
– Statutory Code of Practice should be introduced
– Government to consult on how to strengthen law to protect individuals
from third party harassment
– Better regulation surrounding the use of NDAs
*https://publications.parliament.uk/pa/cm201719/cmselect/cmwomeq/1801/180102.htm

60. 3. Taxation and IR35

61. Taxation
Employer class 1A national insurance contributions on termination
payments delayed. Due to take effect on or after
06 April 2020

62. IR35
— What is IR35?
– Legislation designed to tackle tax avoidance
– Applies to Contractors who provide their services through the use of
Personal Service Companies and relevant partnerships

63. IR35 and the Public Sector
— Responsibility for determining deemed employment status falls to
the public sector body
— Relevant tax and National Insurance may be deducted from source

64. IR35 and the extension to the Private Sector
— Currently, determining employee status is the responsibility of the
contractor
— The Budget confirmed on 29 October 2018 that the IR35 tax rules
would be extended to the private sector in 2020
– NB This will only apply to large and medium – sized organisations
— Impact?

65. Reducing the risk of IR35 applying
— Align contract and reality
— Use HMRC’s online tool to check employment status for tax at
https://www.tax.service.gov.uk/check-employment-status-for-
tax/setup

66. 4. Legislative Changes

67. Parental Bereavement Leave and Pay
— The Parental Bereavement Leave and Pay Act 2018 has passed by
royal assent
— Expected to come into force in 2020
— What will it do?

68. Pay Slips Changes
Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) (No.2)
Order 2018 (SI 2018/529)
– Comes into force on 06 April 2019
– Amends the ERA to provide all workers with a right to an itemised pay
slip

69. Any questions?

70. Thank you
James Tait
Partner
t: 0121 237 3999
e: james.tait@brownejacobson.com
Jennifer Jenkins
Solicitor
t: 0330 045 2375
e: jennifer.jenkins@brownejacobson.com
Helen Badger
Partner
t: 0121 237 4554
e: helen.badger@brownejacobson.com
Alex Berkshire
Solicitor
t: 0121 237 3909
e: alex.berkshire@brownejacobson.com

71. All information correct at time of production.
The information and opinions expressed within this
document are no substitute for full legal advice. It is for
guidance only and illustrates the law as at the published
date. If in doubt, please telephone us on 0370 270 6000.
© Browne Jacobson LLP 2019 – The information contained
within this document is and shall remain the property of
Browne Jacobson. This document may not be reproduced
without the prior consent of Browne Jacobson.