18 Jan

Employment law today

The following article is by Rebecca Thornley-Gibson, Partner, Ince & Co LLP for Travel Law Today 4th ed. which can be downloaded from ABTA's Member zone and read here.

Find out more at our HR and Workforce Planning in Travel event in London on 16 May.

Whilst there is regular and substantial change in employment law issues there are two topics that are proving a constant in discussions for employers at the current time: what will be the Brexit impact and how do we adapt to changing workforce models?

Will Brexit break our employment laws?
We remain subject to a daily dose of Brexit confusion and knowing what will happen to our employment laws still remains uncertain. Whilst we know the Great Repeal Bill will convert current EU employment law into domestic law post Brexit we don’t have the full picture as to whether this will be an opportunity for de-regulatory reform or a gold plating of what we have become used to. The three areas below are likely to see change post Brexit.

1/ Working time regulations
Employers are familiar with the concept of a maximum 48-hour working week. Within the travel industry this is not always easy to achieve on a consistent basis and opt outs are widely used. It is possible that Brexit may give an opportunity to remove the mandatory 48-hour week but this will not give employers a licence to increase hours to dangerous levels. Employers have a duty to provide a safe system of work and ensure health and safety obligations are observed and anything that breaches this duty such as overworking employees will create a risk of employee claims. It is not expected that the amount of annual leave will be increased beyond the statutory 28 day minimum in the UK but recent court judgments have confused how annual leave should be paid. We have seen judgments confirming that types of overtime and commission payments should be included in the holiday pay calculation. Increasing the salary bill in this way is not attractive to employers and it is possible that post Brexit domestic legislation will clearly define how holiday pay should be calculated and not allow further components e.g. shift premiums, to be included in the calculations.

2/ Freedom of movement
It is almost inevitable that current free rights of movement within the EU will become more challenging post Brexit once automatic free movement is removed. This will impact on:

  • The ability to recruit and retain non-UK nationals

  • Hiring decisions now are likely to be influenced by nationality therefore creating a discrimination risk

  • Uncertainty as to an individual’s eligibility to remain in the UK and a risk of penalties through employing illegal workers.

3/ TUPE: Transfer of undertakings
TUPE will usually apply where there is a transfer of business assets e.g. sale of company and where there is change in the service provider. Companies have felt restricted in their ability to complete transactions quickly due to the need to undertake employee consultations and post transfer restrictions on the ability to change employee contracts has caused frustration. Whilst TUPE is here to stay there is an opportunity for a relaxation on the ability to harmonise terms of employment post transfer and to simplify employee consultation processes where redundancies are proposed.

The Taylor Review: Changing employment status and protections
The Taylor Review of Modern Working Practices, published on 11 July 2017, was delivered in the context of the need to adapt to changing employment structures. The recommendations on clarity of employee status and the extent of the scope of employment protections are much needed to
allow employers the certainty they need to model their workforce in a way that works for them.

Employment status
The issues concerning employee status require the closest scrutiny to ascertain how far the reclassification of the workforce will require changes to remuneration, tax, benefits provision and statutory employment protections and entitlements.

Whilst it would not have been a surprise to see the Review recommend removing the three established categories of employee, worker and self-employed, an alternative proposal of introducing a new category of “dependent contractor” has been made which will largely replace worker status and retain a status framework which the Review considers “works reasonably well, but needs to adapt to reflect emerging business models, with greater clarity for individuals and employers”. A number of tests and factors are currently used to determine employment status and these include the degree of control exercised by the employer, the requirement to perform work personally and contractual obligations on both sides to provide and carry out the work.

The Review makes it clear that moving forward there will be clearer legislative principles which will apply in determining employment status and that will reduce the recent litigated employment status cases such as Uber, Pimlico Plumbers and Deliveroo.

Extending employment protections
The full suite of statutory employment protections e.g. unfair dismissal, notice periods, will remain available to employees but recognition of the growing number of non-employees who are likely to have dependent contractor status has led to the following Review recommendations:

  • Right to a written statement on commencement of employment for dependent contractors

  • Higher National Minimum Wage for nonguaranteed hours contracts

  • Ability to pay rolled up holiday in lieu of time off

  • Agency workers will be able to request employment directly with the hirer

  • Zero hours contracts workers will be able to request a contract to reflect actual hours worked

  • Statutory sick pay to be paid as a basic employment right but subject to length of service conditions

  • The threshold to request workplace representatives to be reduced from 10% of the workforce to 2%

  • Gig economy workers providing services through apps and digital platforms to be paid a piece rate and to be given greater clarity as to when their “working time” for national minimum wage applies.

The Review provides a detailed insight into the current and future world of work and the need to ensure employment law and practices protect and promote fair and decent work. A standardised floor of employment rights for all is some time away but the Review does show the need to provide protections to those individuals who choose towork outside the standard 9-5 employee model.