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BREXIT - the end of the transition period

17th December 2020

BREXIT - the end of the transition period

HR Newsletter - Issue 6

In this edition, we will be focusing on Brexit and how the end of the transition period on 31st December 2020 may impact employers in the UK.

The countdown to Exit Day has begun, leaving commentators, specialists, and employers wondering how leaving the EU may affect employment law and what the implications will be for employers.

In this edition, we will also be covering:

  • The extension of the furlough scheme;
  • Homeworking: employee surveillance; and
  • New ICO guidance on dealing with subject access requests


Legal Update #1 – Brexit: the end of the transition period  

A large proportion of employment law in the UK derives from the EU. Especially law governing collective consultation, discrimination, transfer of undertakings (‘TUPE’), parental leave and working time regulations.

When the UK left the EU on 31 January 2020, the UK entered a transition period, meaning that all EU law continued to apply in exactly the same way. That transition period ends on 31 December 2020. At this point, all EU law will be converted into domestic law (if it has not already been converted) and will be in place unless or until the government decides to amend or repeal the relevant domestic legislation.

There is also a chance that the UK will be obliged to implement certain EU law as part of a trade deal reached between the EU and the UK.

Freedom of movement

If the UK does not reach a deal with the EU before the end of the transition period, freedom of movement will cease on 31st December 2020. This would mean that any UK nationals working in the EU will have to abide by EU rules and the rules of the individual member state. The same would apply to EU nationals working in the UK.

EU citizens who have lived in the UK for 5 years at the end of the transition period can apply for settled status to remain in the UK indefinitely. Additionally, EU citizens who have lived in the UK for less than 5 years at the end of the transition period can apply for pre-settled status until they can acquire settled status. These applications must be made by 30 June 2021. If family members join EU citizens in the UK, they must make their application at least three months after their arrival, or by 30 June 2021 (whichever is the later).

If EU citizens fail to obtain settled status by 30 June 2021, they will be classed as "illegal immigrants" and face removal from the UK.

Employers should prepare for this in advance by identifying any of their employees who are UK nationals working in the EU or EU nationals working in the UK and considering their immigration status.

Immigration

Any EU citizens living in the UK after the 31st December 2020 who have not applied for settled or pre-settled status will be allowed to stay for three months without a visa, but will have to apply for a visa during this period if they wish to remain in the UK for a longer period of time.

There will be a new points-based system from 1 January 2021. The system will treat EU and non-EU citizens equally, focusing on skilled workers. Most individuals will need sponsorship from their employers as a sponsorship requirement will apply to the Skilled Worker and Student routes into the UK. Sponsors will need to show that that they are filling a genuine vacancy, but it is not currently clear how this will be assessed.  

The guidance published by the government in February 2020 stated that no low-skilled or temporary work route into the UK will be introduced.

Discrimination law

We do not expect to see any significant changes to the law governing discrimination in the UK when the transition period ends. This is because the Equality Act 2010, implementing the UK’s laws against discrimination, is domestic legislation. Nevertheless, although any major changes are unlikely, it has been suggested by some commentators that a cap could be placed on discrimination compensation in a similar way as it already is for unfair dismissal.

Parental leave and pay

Currently, rights to parental and family related leave in the UK derive from a mixture of EU and UK rights. UK maternity leave and pay precede EU rights and are more generous in many respects. For example, under EU law, women are entitled to 14 weeks paid maternity leave. By contrast, in the UK, they are entitled to a more generous 39 weeks.

The relatively new rights to shared parental leave and the right to request flexible working are purely domestic in origin. Due to this, although some critics may consider these rights to be a burden on business, there seems little political appetite for their repeal or for them be watered down.

TUPE

Most commentators believe that any major changes are unlikely to TUPE provisions. However, following Brexit, some small changes could be made to make it more business friendly.

For instance, it has been predicted that rules on consultation will be relaxed to bring them in line with redundancy collective consultation obligations. This would mean that businesses would only be required to consult where at least 20 or more employees are being transferred, as opposed to the current position of 1 or more.

Commentators have also suggested that rules on harmonisation of terms and conditions after a transfer may be relaxed.

Holidays and working time

We believe that a wholesale repeal of the Working Time Regulations 1998 (‘WTR’) is unlikely as many rights that it contains are now ingrained within the UK, such as the right to statutory paid holiday.

However, the government may wish to amend the following aspects of the regulations:

  • European Court of Justice decisions on the right to accrue holiday on sick leave and carry it over;  
  • Holiday pay being based on all aspects of remuneration as opposed to solely basic pay; and
  • The 48-hour cap on weekly working hours (of which most employers already require their employees to opt out of).

It has also been suggested by commentators that the rule in the case of Tyco may be abolished. In this case, the ECJ found that where workers travel around all day, and don’t have a fixed place of work, their travel time from home to their first location and from their last location to their home is working time under the WTR. This is likely to be brought in line with other UK commuting law which provides that commuting to and from work is not considered working time.

Collective redundancy consultation

Back in 2013, we saw some changes to the minimum time limit for starting collective redundancy consultation where an employer proposes to dismiss 100 or more employees. The time limit was reduced from 90 days of consultation to 45 days.

As a result, the obligation to collectively consult isn’t particularly onerous and I think we could expect trade unions to fight hard against any attempts to remove it all together.

What we may see is a watering down of collective consultation obligations, especially as employees arguably don’t seem particularly concerned about these rights. On the other hand, businesses don’t seem be of the position that collective consultation obligations are a burden that needs amending. On this basis, it isn’t clear whether collective consultation will be particularly high on the political agenda. However, some commentators believe we may see the relaxation of collective consultation rules so that only very large companies that don’t have trade unions will need to comply with them.

Following Brexit, the UK will no longer be subject to the EU rules on European Works Councils. And so, after the end of the transition period, we may see the removal of collective consultation obligations with Works Councils. However, the government has issued guidance stating that businesses are encouraged to continue to allow UK workers to be represented on European Works Councils on a voluntary basis.


Legal Update #2 - Extension of the Furlough Scheme to April 2021

The Chancellor, Rishi Sunak, announced last month that the Furlough Scheme will be extended across the UK until 31 March 2021. He later announced on the 17 December 2020 that the Scheme will be extended by a further month to 30 April 2021, with the government continuing to pay 80% of wages. On this basis, the government’s contribution will not reduce in January like many expected.  

What level of support will the extended scheme provide to employers?

  • For claim periods running from 1 November 2020 to April 2021, furloughed employees will receive 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. The £2,500 cap is proportional to the hours not worked. 
  • Employers can top up employee wages above the maximum salary threshold at their own expense.
  • Employer contributions during the CJRS extension will be the same as in August 2020. This means that for hours not worked by their employee, employers will only be asked to cover National Insurance and employer pension contributions.
  • Employers do not need to have used the CJRS previously.
  • Employers can claim for employees who were employed and on their PAYE payroll on 30 October 2020.
  • Flexible furlough still applies, i.e employees can work part time and be furloughed part time. There is no minimum furlough period. Employees can also enter into a flexible furlough agreement more than once. Although flexible furlough agreements can last any amount of time, unless otherwise specified the period claimed for must be for a minimum claim period of 7 consecutive calendar days.

Can shielding employees, employees with caring responsibilities, and those on sick leave be furloughed?

  • Employees that are shielding in line with public health guidance (or need to stay at home with someone who is shielding) or employees that have caring responsibilities resulting from coronavirus, including employees that need to look after children, can be furloughed. From 2 December 2020, the clinically extremely vulnerable are advised to work from home where possible, but otherwise they can go into their workplace. They are no longer strongly advised to work from home where they live or work in a tier 3, very high-risk area. The guidance suggests that clinically extremely vulnerable employees in tier 3 areas who are concerned about going into work may wish to speak to their employer about making temporary arrangements to minimise the risk of transmission.
  • Furlough is not intended for short-term sickness absences. However, if employers wish to furlough employees for business reasons and they happen to be off sick, they are able to do so. It is up to employers to decide whether to move furloughed staff onto SSP or to keep them on furlough pay if they become sick.
  • Employees that were employed and on the payroll on 23 September 2020 who were made redundant, stopped working for their employer, or their fixed term contract expired after this date, can be re-employed and claimed for under the Furlough Scheme.

What restrictions will be placed on employees who are furloughed?

As under the Furlough Scheme previously, during ‘furloughed hours’, employees cannot do any work for their employer that makes money or provides services for their employer or any organisation linked or associated with their employer.

Employees can:

  • take part in training
  • volunteer for another employer or organisation
  • work for another employer (if contractually allowed)

Employer – employee agreement requirements

Employers should discuss with their staff and make any changes to the employment contract by agreement.

To be eligible for the grant, employers must have confirmed to their employee (or reached collective agreement with a trade union) in writing that they have been furloughed or flexibly furloughed.

Employers must:

  • make sure that the agreement is consistent with employment, equality and discrimination laws
  • keep a written record of the agreement for 5 years
  • keep records of how many hours their employees work and the number of hours they are furloughed (for example, not working), for 6 years

The employee does not have to provide a written response.

Where consistent with employment law, any flexible furlough or furlough agreement made retrospectively that has effect from 1 November 2020 will be valid for the purposes of a CJRS claim. Only retrospective agreements put in place up to and including the 13 November 2020 may be relied on for the purposes of a CJRS claim.

What will this mean for other Coronavirus Job Schemes?

The launch of the Job Support Scheme has been postponed because of national developments related to the coronavirus pandemic.

The Job Retention Bonus (JRB) will not be paid in February 2021 as the purpose of the JRB was to encourage employers to keep people in work until the end of January. However, as the Furlough Scheme is now being extended to 30 April 2021, the policy intent of the JRB no longer applies.

Employers will not be able to claim back notice periods under the Furlough Scheme from 1 December 2020

From 1 December 2020, an employer cannot claim under the Furlough Scheme for any days on or after 1 December during which a furloughed employee is serving contractual or statutory notice. This is the case even for employees who have resigned or retired.

You should bear this in mind if you are considering redundancies. It is unclear if further guidance will be published on this issue. We will keep you updated.

New timescales for submitting a furlough claim

Claims have to be submitted within two weeks of the end of the previous calendar month unless there is a “reasonable excuse for failing to make a claim in time”.  

Claim for furlough days in

Claim must be submitted by

November 2020

14 December 2020

December 2020

14 January 2021

January 2021

15 February 2021

February 2021

15 March 2021

March 2021

14 April 2021

April 2021

To be confirmed pending guidance

The HMRC guidance sets out examples of what may amount to a reasonable excuse for missing the deadline. For instance, if your partner or another close relative died shortly before the claim deadline, you had a serious or life-threatening illness, including Coronavirus related illnesses, which prevented you from making your claim (and no one else could claim for you), or your computer software failed.


Legal Update #3 - Homeworking and Employee Surveillance

The British public have been advised to work from home (WFH) where they can for the majority of the year since the outbreak of the COVID-19 pandemic in March 2020 and the current position in England is that employees should work from home if they “can effectively do so”.

Prior to the pandemic, WFH was the exception and not the default for many employees. It was more prominent amongst higher-skilled occupations and varied greatly depending on the sector. An ONS Survey found that from January to December 2019, around 1.7 million people reported working mainly from home (roughly 5% of the workforce) and 8.7 million people said they have worked from home (less than 30% of the workforce).By contrast, flash forward to April 2020 and 46.6% of people in employment worked at home at some point as a result of the COVID-19 outbreak.

This significant and almost immediate change from officed based working to homeworking in March 2020 for many employees is expected to be a catalyst for a major shift in workplace culture when things return to some level of normality in 2021 or later. Indeed, many large businesses have already announced their plans to allow more employees to work from home in the future.

It seems that WFH is the future for many, at least to some degree. This brings about new legal considerations when it comes to employee surveillance and monitoring staff at home. Although employers have monitored employees before, new technologies have been developed as WFH has become more prevalent to allow employers to utilise more intrusive methods of monitoring home working. For instance, packages such as ActivTrack and Sneek allow employers to take screenshots of employees’ screens, take pictures of the employee every few minutes, or even video them in their homes.

A poll of 3,000 workers carried out by the Trades Union Congress (TUC) found that 15% of workers have experienced an increase in employer monitoring since the COVID-19 pandemic began in March 2020. Concerningly, less than 31% had been consulted before the monitoring technology was introduced.

The boundaries between work life and home life blur when WFH, providing employers with the difficult challenge of striking the balance between taking measures to protect the business and respecting the right to private life.

Article 8 of the European Convention on Human Rights provides the right to respect private and family life and correspondence and was incorporated into UK law by the Humans Rights Act 1998.  The question is, how can this be reconciled with employee surveillance in their private homes?

Where there is an interference with an employee’s right to respect of private life, the measures taken should be necessary and proportionate to a legitimate aim. Some employer legitimate aims in this context might include assessing an employee’s productivity and performance, reducing the risk of misconduct, limiting the businesses’ exposure to liabilities, and protecting confidential information of the business.

Monitoring an employee’s use of the employer’s equipment, such as a laptop, would likely be justified and proportionate and raise a lower expectation of privacy than monitoring by video surveillance at all hours of the day. Covert surveillance is rarely likely to be necessary or proportionate.

There is no law in the UK which specifically governs monitoring of employees. The legislative framework has developed alongside the development in technology.

General Date Protection Regulation (GDPR) and the Data Protection Act 2018 (DPA 2018)

  • As electronic surveillance of employees at home involves the processing of personal data, this is regulated by the General Date Protection Regulation (GDPR) and the Data Protection Act 2018 (DPA 2018).
  • In order to be compliant with GDPR, employers must establish a legal basis for monitoring employees and processing their personal data. As consent is rarely an appropriate legal basis for processing employee data, employers will have to rely on the ‘legitimate interests’ basis for monitoring employees. It is therefore recommended that a legitimate interest assessment (LIA) is carried out to meet obligations under the GDPR principle of accountability.
  • Under the GDPR, employers must also carry out data protection impact assessments (DPIAs) where “a type of processing in particular using new technologies, and taking into account the nature, scope, context and purposes of the processing, is likely to result in a high risk to the rights and freedoms of natural persons” Employee monitoring is likely to amount to "high risk" processing so a DPIA should be completed. The DPIA should set out why the monitoring is proportionate and necessary.
  • Employers must inform their employees of any data processing under GDPR in order to ensure that data is processed in a lawful, fair, and transparent way. Information provided should be detailed and include what data will be obtained, why, how, and who it will be disclosed to.

Investigatory Powers Act 2016 and the Investigatory Powers (Interception of Businesses etc. for Monitoring and Record-keeping purposes) Regulations 2018 (SI 2018/356)

  • The Investigatory Powers Act 2016 and the Investigatory Powers (Interception of Businesses etc. for Monitoring and Record-keeping purposes) Regulations 2018 (SI 2018/356) govern the interception of electronic communications, making it an offence to intentionally intercept any communication in the course of its transmission without lawful authority.
  • In brief, intercepting is making the communications available whilst it is being transmitted, to a person other than the recipient or the sender. This also includes recording the communication for later use.
  • The Regulations provide that employers can lawfully intercept communications sent on their work systems if the system is a private telecommunication system and the employer has the right to control the operation or use of the system or the employer has the express or implied consent of the person with the right to control the system.
  • However, the Monitoring and Record-keeping Regulations provide that it is lawful to intercept communications without consent for certain business activities. The Explanatory note suggests that these would include establishing whether employees are reaching the standards required by them, to monitor unauthorised use of the system, or to detect if the system is working correctly. In order to take advantage of these provisions, the interception must be for the sole purpose of monitoring or keeping a record of communications relevant to the business, the system must be provided wholly or partly in connection with the business, and the employer must have made all reasonable efforts to inform every person using the system that an interception may take place.

Duty of mutual trust and confidence

  • The duty of trust and confidence implied into an employee’s contract of employment may also be relevant. Research by the Chartered Institute of Personnel and Development (CIPD) suggests that workplace surveillance can damage trust. It is easy to see how being monitored at home could have a negative impact on an employee’s mental health. Employers should consider the duty of care they owe to employees before putting any measures in place and consider their employees’ health and wellbeing. If an employee feels that there has been a breach of the implied term of mutual trust and confident, they could resign and make a claim for constructive unfair dismissal.

Discrimination under the Equality Act 2010

  • Employers should unsure that they are not unfairly targeting certain employees with monitoring measures, as this could result in a claim for unlawful discrimination under the EqA 2010.

 Advice to Employers

In order to find the right balance and not infringe on employees’ rights under Article 8 ECHR and the legislative framework in the UK, it is recommended that employers:

  • establish a legitimate reason for any monitoring or surveillance of employees at home and carry out an LIA;
  • consider if there are less intrusive alternatives to monitoring which would achieve the businesses’ aims;
  • consider the impact of monitoring on employees and carry out a DPIA where new monitoring measures are to be introduced;
  • clearly inform employees of monitoring and update any electronic communications policy; and
  • only collect and store necessary data.


Legal Update #4 -
Updated ICO guidance

The ICO has published right of access detailed guidance to assist organisations in dealing with subject access requests (SAR) effectively and efficiently.

SARs provide individuals with the right to obtain a copy of their personal data from their employer, as well other supplementary information.The ICO received calls for more support and clarification on parts of the law when consultation took place over the guidance in 2019.

The ICO has now provided clarity on three key points:

  1. Stopping the clock for clarification. The ICO received feedback that requests often do not leave enough time to respond (the time limit is usually 1 month at the latest). Due to this, the position is now that, in certain circumstances, the clock can be stopped whilst organisations are waiting for the requester to clarify their request.

  2. What is a manifestly excessive request. Organisations can refuse to comply with a SAR if it is manifestly unfounded or manifestly excessive. The ICO has clarified that it should be considered whether the request is clearly obviously unreasonable. This should be based on whether the request is proportionate when balanced with the burden or costs involved in dealing with the request. The ICO guidance suggests organisations should take into account all the circumstances of the request, such as the nature of the requested information, their available resources, or whether refusal may cause substantive damage to the individual.

  3. What can be included when charging a fee for excessive, unfounded or repeat requests. When determining a reasonable fee, organisations can take into account the administrative costs of processing the information, locating, retrieving and extracting the information, and communicating the response to the individual. As there may be substantial overlap across these activities, organisations should ensure that the fee they charge is reasonable and that they do not ‘double-charge’ the individual. Organisations should base the costs of staff time on the estimated time it will take staff to comply with the specific request, charged at a reasonable hourly rate.

For more information, please contact Tim Jones on 01384 327172 or at tim.jones@higgsandsons.co.uk 

 

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