Vicky Schollar is a Senior Associate in the Employment team at Blake Morgan LLP.
What can employers in the travel industry expect in Employment, Immigration and Pensions in 2022? In 2021, we saw a number of pandemic-related Employment Tribunal decisions on issues ranging from use of the furlough scheme, automatic unfair dismissal on health and safety grounds and whistleblowing. Those decisions provide a useful insight into the approach Employment Tribunals are taking and we can expect many more decisions in 2022. By contrast, compared to other years, there is hardly any new employment legislation expected in 2022.Over two years on from the start of the pandemic, many employers particularly in the travel industry will continue to be dealing with its implications in the months ahead. From handling tricky issues with mandatory requirements having recently been lifted; to staff absences impacting on services as pent-up demand for foreign travel and holidays continues to increase; to managing staff suffering from long-COVID: these continue to be challenging times.
Unconnected to the pandemic, April is the usual month for increases in employment statutory rates and limits. This year is no exception but we also have the controversial increase in National Insurance Contributions which was confirmed in the Spring Statement 2022 on 23 March 2022
We have published our Handy Fact Card 2022/23 which also has the details of the statutory rates and limits. Please click here to view our online version of the Handy Fact Card. You can bookmark this version for future reference.
Statutory Sick Pay (SSP)
Temporary regulations provided that, during the period 10 December 2021 to 26 January 2022 inclusive, an employee was not required to provide medical evidence (such as a GP's fit note) to their employer in respect of the first 28 (rather than the first 7) days of any period of incapacity for work. This applied to any period of incapacity which had begun by 26 January 2022 if it was ongoing after that date.
The SSP Rebate Scheme was re-introduced as a temporary measure in response to the Omicron coronavirus variant. Regulations came into force on 14 January 2022 and an employer with fewer than 250 employees (as at 30 November 2021) who had paid SSP for absences linked to coronavirus-related sickness or self-isolation was eligible for a rebate of up to two weeks' SSP for each employee for periods of sickness starting on or after 21 December 2021. The scheme ended on 17 March 2022.
Increase in Statutory Rates
From 1 April 2022, the National Living Wage (payable to workers aged 23 and over) and the National Minimum Wage increased as follows:
• For workers aged 23 and over from £8.91 to £9.50
• For workers aged 21-22 from £8.36 to £9.18
• For workers aged 18-20 from £6.56 to £6.83
• For workers aged 16-17 from £4.62 to £4.81
• Apprentice rate from £4.30 to £4.81
The increase in the National Living Wage rate to £9.50 represents an increase of 6.6% and the age threshold will reduce again to those aged 21 and over by 2024.
From 3 April 2022:
• The weekly rate of statutory maternity, adoption, paternity, shared parental and parental bereavement leave pay increased from £151.97 to £156.66 or 90% of the employee's average weekly earnings if this is less than the statutory rate.
From 6 April 2022:
• The weekly rate of statutory sick pay increased from £96.35 to £99.35.
• For dismissals on or after this date, the limit on a "week's pay" which is used to calculate statutory redundancy pay and the Employment Tribunal basic award increased to £571. The maximum compensatory award which may be made for an unfair dismissal claim increased to £93,878 or 52 weeks' pay, whichever is the lower.
• The range of awards for "injury to feelings" in cases of discrimination or whistleblowing increased from:
o £990 to £9,900 for less serious cases
o £9,900 to £26,600 for cases not in the upper band
o £26,600 to £49,300 for the most serious cases (the upper band)
• Employers are under a duty to provide suitable Personal Protective Equipment (PPE) to "workers", not just employees where there is a health and safety risk. The prohibition on charging for PPE is also extended to "workers". This follows a case from 2020 where the High Court held that the UK had failed to implement properly two EU Directives on health and safety.
Employers need to identify those workers who reach another age threshold and who will benefit from the NMW increases. They will also need to inform members of staff who are about to take family leave about the increase in rates.
Finally, employers will need to be aware of the new limit on a "week's pay" if embarking on redundancy exercises in the weeks and months ahead. Thankfully, after a long hard journey through the pandemic, the travel industry is for the most part receiving increased demand, (including bookings for 2023/24) and it is hoped that the sector will not suffer the need to make many redundancies, despite increasing household living costs potentially reducing what people can afford to spend on holidays.
Increase in National Insurance Contributions
From 1 April 2022, there was an increase of 1.25% in the rates of some National Insurance contributions (NICs). The NIC increase applies to classes 1 (employee and employer) and 4 (self-employed), both main and higher rates.
This NIC increase is effectively the first step in the introduction of the health and social care levy which is based on NICs. From April 2023, the levy will be formally separated out when the health and social care levy becomes chargeable and NICs rates will return to their 2021/22 levels.
Also announced in the Spring Statement 2022 was an increase in the national insurance threshold (effective from July) which it is hoped will lessen the impact of the NIC increase for many people.
Gender Pay Gap Reporting
By 4 April 2022, large employers in the private and voluntary sector had to report Gender Pay Gap information based on the "snapshot date" of 5 April 2021.
Changes to the reporting deadlines due to the pandemic, the impact of the pandemic on pay, such as temporary pay reductions, reduced working hours and job losses in the travel industry will have had an impact on the gender pay gap. Furlough absences will also have a significant impact on calculations.
The furlough scheme also disadvantaged many women because of the effect of childcare responsibilities and the disproportionate representation of women in badly affected sectors such as the travel industry and/or in insecure work.
Note that on 21 March 2022, the Equality and Human Rights Commission updated its guidance on Gender Pay Gap reporting.
Right To Work Checks
Before any individual of any nationality starts work, it is essential to establish that the individual has the right to work in the UK. Failure to carry out a "right to work check" or to carry it out properly, can result in a fine of up to £20,000 for each illegal worker as well as criminal penalties if an employer is found guilty of employing someone who they knew or had "reasonable cause to believe" did not have the right to work in the UK.
Following the right to work checks "Covid concession" (whereby a photo/scanned document proving the right to work can be sent digitally and checked via videolink, rather than the employer requiring the original), the Government has announced that a new digital system will take effect. Employers will be able to use certified "Identification Document Validation Technology" service providers to carry out digital identity checks on their behalf for those whose right to work cannot be checked via the Home Office's online services, including British and Irish citizens. However, as this scheme was not ready by 6 April 2022, the right to work checks "Covid concession" will now remain in place until 30 September 2022.
From 6 April 2022, Biometric Residence Permit and Biometric Residence Card holders will evidence their right to work using the Home Office online service only, presentation of a physical document will no longer be acceptable.
Additional Bank Holiday
As part of the celebration of the Queen's Platinum Jubilee, the late May bank holiday will be moved to Thursday 2 June 2022 and an additional bank holiday will take place on Friday 3 June 2022. Those in the travel industry are likely to need to start making plans to cover staff absences and increased demand from customers for holidays if they have not already done so.
Employers should also check contracts of employment to determine whether employees have the right to take the additional bank holiday of 3 June 2022 as a day's paid holiday.
Chell v Tarmac Cement and Lime Ltd
In January 2022, the Court of Appeal ruled on an appeal heard in November 2021 as to whether or not an employer was negligent or vicariously liable for the actions of an employee whose practical joke unintentionally caused injury to a contractor at work. It upheld the High Court's decision that there was not a sufficient connection between the wrongful act and the employee/employer relationship. It was in no way connected to duties the employee was authorised to do, nor was violence reasonably foreseeable. Even if had been reasonably foreseeable, in the context, a health and safety policy or other rules covering "horseplay" would be unrealistic, beyond the level of the employer's site rules, which stated that "no-one shall intentionally or recklessly misuse any equipment".
Smith v Pimlico Plumbers Ltd
In February 2022, the Court of Appeal ruled that a "worker", wrongly classified as self-employed, who had not been provided with any paid annual leave in breach of the Working Time Regulations 1998, could carry over his entitlement for untaken leave and leave which he took but was not paid for. Based on European case law, Mr Smith was able to claim for 4 weeks' unpaid leave per year stretching back to the beginning of his engagement because the claim was brought within 3 months of it ending. This particularly affects "gig economy" or casual workers but also anyone wrongly classified as self-employed and highlights that best practice is for employers to encourage staff to take paid holiday, ensure they have the opportunity to do so, and remind them that they will lose it if they do not.
Significantly for all employers, the Court of Appeal also expressed the "strong provisional view" that a 2014 case was wrong to rule that a claim for a "series" of unlawful deductions from wages (for e.g. underpaid holiday pay stretching back months or years) could be limited if the series was "broken" by a correct payment being made within the three months prior to an unlawful deduction/underpayment. Some historical holiday pay claims may be affected if staff have ongoing claims alleging that commission or overtime was not included in their holiday pay, and their claims could go back for up to 2 years of underpayments (or more if they were not given the opportunity to take paid holiday at all). This line of cases is particularly relevant to the travel industry since it began with the successful challenge in 2011 of British Airways pilots who alleged that their holiday pay should include the supplements they normally received while working. Employers should ensure they are paying the correct amount of holiday pay to employees and "workers" alike.
Lutz v (1) Ryanair DAC and (2) MCG Aviation Ltd
The travel industry will no doubt have seen with interest the outcome on 5 April 2022 of the case of a pilot contracted with MCG Aviation Ltd for Ryanair. It was held that Mr Lutz was both an agency worker and a "worker" for MCG, not self-employed as MCG alleged. He had been placed in a service company of which he was neither shareholder, director nor employee; the service company did not contract with Ryanair; and Mr Lutz had no unfettered "right of substitution" – only the ability to change the day/time of his personal service. Because he had to provide personal service, he was a "worker" under employment law, and the nature of the engagement categorising him as "self-employed" was a sham. This has wide implications for the employment status of many other purportedly self-employed pilots in the aviation sector in terms of holiday pay, working time limits, auto-enrolment and other rights available to workers which are not available to the genuinely self-employed.
Ryanair DAC v Morais and others
29 Ryanair pilots participated in a strike organised by their trade union. As a result, they had concessionary travel benefits withdrawn for a year. Although there is a ban on dismissing staff taking part in strikes which amount to "protected industrial action", there are no specific protection provisions dealing with other types of treatment following strike action, such as the detriment the pilots alleged in this case. However, the pilots claimed that their actions amounted to "trade union activities" for which there is protection from detriment under UK law. Although the EAT agreed with the pilots in November 2021, the case is being appealed to the Court of Appeal. It is now awaiting a hearing date because a previous case on which the EAT based its decision was overturned in the Court of Appeal in March 2022, and is currently awaiting permission to appeal to the Supreme Court.
UPCOMING LEGISLATION – NO DEFINED DATES
There will be a new "day one" statutory right of up to one week's unpaid carer's leave.
The Government will introduce a new duty for employers to prevent sexual harassment and re-introduce the concept of third-party harassment in the workplace. It will also look closely at the possibility of extending the three-month time limit for workplace harassment and discrimination claims under the Equality Act 2010 to six months.
The Government's consultation paper, Making Flexible Working the Default is considering points such as whether the right to request flexible working should be a day one right (not requiring 26 weeks' service), whether the eight business reasons for refusing a request all remain valid and whether the employee could be allowed to make more than one request per year.
ICO Employment Practices Code
The Information Commissioner's Office (ICO) is considering responses to help in updating its data protection and employment practices guidance (which has not been updated post GDPR/UK GDPR). As well as including previous topics, it will also be updated to include recent changes such as artificial intelligence, monitoring technologies and the impact of the COVID-19 pandemic on remote working.
The Employment Bill was announced in December 2019, and its proposals include:
• Establishing a single enforcement body for employment rights.
• Strengthening the rules on tips and service charges so that distribution is more transparent.
• Extending the period of redundancy protection for expectant and new mothers returning to work after maternity leave until six months after the end of maternity leave.
• A new right to paid neo-natal leave for parents.
However, the Employment Bill was not included in the Queen's Speech of forthcoming legislation this year and there is now a query over whether the proposals will be introduced before the next General Election in 2024.
The obligation on pension schemes to consider the risks and opportunities of climate change
• Pensions legislation came into force on 1 October 2021, requiring the trustees of occupational pension schemes with £5 billion or more in relevant assets and all authorised master trusts and collective money purchase schemes, to set climate-related targets from October 2021, aligned with the Paris Agreement temperature goal and report annually on it. There is an element of reasonableness and proportionality in meeting the obligations.
• Schemes with at least £1billion in relevant assets have to meet the same requirements from 1 October 2022. The Government will review the position at that point (2023) to assess whether the legislation remains appropriate and whether to extend it to smaller schemes.
• Enforcement powers lie with the Pensions Regulator - contravention of the legislation may attract fines of up to £5,000 in the case of an individual and up to £50,000 in the case of a company.
• For contract-based schemes such as group personal pension schemes, the insurance company provider will be subject to similar Financial Conduct Authority (FCA) rules. The FCA is under a formal obligation to consider climate change issues in discharging its functions.
In following the new framework, trustees of occupational pension schemes will still need to keep at the forefront of their minds their fiduciary duties to act in the best interests of members, which may complicate decision-making.
Increase of the minimum pension age from 55 to 57 in 2028
The normal minimum pension age (NMPA) is the earliest age from which an individual can draw their workplace or personal pension, other than on ill-health grounds or where they have a "protected pension age." It is separate from the State Pension age, which is the earliest age an individual can draw their State Pension.
The Finance Act 2022 received Royal Assent on 24 February and will increase the NMPA from 55 to 57 from 6 April 2028. However, there are a number of exceptions to the change.
• Members of pension schemes who before 4 November 2021 have a right to take their benefits at or before age 55 retain that right.
• Many will be able to retain the age 55 NMPA on transfer of their benefits to another scheme (they may end up with accounts with two different pension ages).
One interesting issue identified by former Pensions Minister Steve Webb is what happens if the rules of a pension scheme say that a member can access their pension from "normal minimum pension age". In that case, it is not clear if this means the current age of 55 or the new normal age of 57 from 2028.
The ongoing pandemic will continue to bring many challenges for many in the travel industry and key topics to be aware of include:
• Being mindful of employees' mental wellbeing including ensuring that sources of support such as employee assistance and counselling helplines are publicised and/or train staff to become mental health first aiders.
• The impact of long COVID. In a report published by the ONS on 6 January 2022, an estimated 1.3 million people in the UK are experiencing self-reported long COVID.
• Ways of managing staff now that there is no requirement for those testing positive for COVID to self-isolate: what this means in terms of testing staff, sick pay including where staff are asymptomatic, and the travel industry's health and safety duties to its other staff and customers – see our separate article considering these issues.
• New ways of working, including hybrid working. Employers need to address a wide range of legal and practical issues when implementing hybrid working to reflect the homeworking element. These include health and safety, the provision of equipment, data protection and changes to contracts and HR policies. Employers should take care to ensure that hybrid working policies and practice are inclusive and fair.
• The impact on women of the menopause, which became increasingly high profile in 2021 and is unlikely to change in 2022. The physical and psychological impact can vary in severity and have a huge effect on an individual’s day-to-day activities and ability to perform as usual in the workplace. Research shows that some women reduce their hours or give up their jobs as a result and/or do not apply for promotion because of the impact of the menopause.