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Employee protection legislation

The government announced its intention to introduce a new Employment Bill to enhance employee rights as the UK leaves the EU. The main elements of the Bill are: creating a new, single enforcement body, ensuring that tips left for workers go to them in full, introducing a new right for all workers to request a more predictable contract, extending redundancy protections to prevent pregnancy and maternity discrimination, allowing parents to take extended leave for neonatal care, introducing an entitlement to one week’s leave for unpaid carers and, subject to consultation, make flexible working the default unless employers have a good reason not to.

Announced in the Queens Speech in December 2019. Draft bill is not yet published.

Live-in workers’ entitlement to national minimum wage

Shannon v Rampersad t/a Clifton House Residential Home (joined with Royal Mencap Society v Tomlinson-Blake in Court of Appeal) concerns the question as to whether home workers required to remain at home for their shift and workers who sleep in are entitled to payment at national minimum wage for time not spent performing some specific activity. The Court of Appeal held that only time spent working had to be taken into account, overturning the High Court at first instance. This case could have wider implications for sectors requiring employees to be physically present at a specific location as part of their employment.

Hearing 12–13 February 2020.

Supreme Court judgment awaited.

Age discrimination—justifying pay policy

In Heskett v Secretary of State for Justice the Employment Tribunal (ET) and Employment Appeal Tribunal (EAT) held that a policy of reducing the rate at which probation officers progressed up an incremental salary scale was prima facie discriminatory in favouring employees over the age of 50 as against younger employees but that the policy was, in all the circumstances, justified.

Due to be heard by the Court of Appeal in May 2020.

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In Dewhurst v Revisecatch Ltd t/a Ecourier, the ET permitted a TUPE claim to continue on the basis that TUPE confers rights on workers in addition to employees. This is a first instance ET decision and therefore sets no precedent. However, it is expected that it will be appealed. If TUPE is extended to workers in this way, it could have far-reaching implications for business.

Shared parental leave—sex discrimination

Chief Constable of Leicestershire Police v Hextall

The Court of Appeal held that employers who pay enhanced contractual maternity pay but only statutory shared parental leave (ShPL) pay for fathers taking ShPL do not directly or indirectly discriminate against men and are not in breach of equality of terms (equal pay) legislation. See report of .

Appealed on the basis that the claim was properly characterised as an equal terms/pay claim under sections 66 of the Equality Act 2019, rather than an indirect discrimination claim under section 19 (such claims being mutually exclusive).

Permission to appeal papers lodged on 25 June 2019.

Permission to appeal refused by the Supreme Court in February 2020.

Off payroll working in the private sector (IR35)

The IR35 rules are designed to ensure that individuals who provide services through an intermediary (usually a personal services company) but would have otherwise been an employee pay the same PAYE and NICs as direct employees. The responsibility for this rests with the intermediary, but the government believes that this is not an effective control and that only 10% of those who should comply with IR35 rules do so.

The government’s position is to move to similar rules that already apply in the public sector where the public-sector employer is responsible for determining whether IR35 applies and for paying tax and NICs if it does. The draft legislation is expected to be in force by April 2020 and will apply to certain medium-sized and large private sector businesses (as amended by the incoming Finance Act).

The government published draft legislation on 11 July 2019, largely disregarding concerns raised during earlier consultations.

Following a review of the proposed changes, the government confirmed in February 2020 that the changes will go ahead with effect from 6 April 2020 as planned. HMRC has produced on preparing for the changes.

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The House of Lords Finance Bill Committee heard evidence on the implications of the change on 2 March 2020 however, all indications remain that the new rules will be in force by 6 April 2020. The changes will apply to payments made for services provided on or after 6 April 2020 but enforcement is expected to be ‘light touch’ for a period of 12 months.

Parental Bereavement Leave

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Termination payments

Legislation making all termination payments above £30,000 threshold subject to employer class 1A NICs was delayed and will now apply from 6 April 2020. The received Royal Assent on 24 July 2019.

Individual rights arising from trade union membership

Kostal UK v Dunkley A2/2018/0108, , UKSC 2019/0153

Case about whether an employer's attempt to bypass a recognised trade union by negotiating directly with individual employees regarding changes to terms and conditions amounted to unlawful inducement contrary to of the Trade Union and Labour Relations (Consolidation) Act 1992.

The EAT held that the ET had not erred in finding that it did—see report of . The Court of Appeal allowed the employer’s appeal, held that it did not amount to unlawful inducement and dismissed the claim—see report of .

The Court of Appeal handed down judgment on 13 June 2019.

Relevant to employers who recognise trade unions.

Application for permission to appeal lodged on 11 July 2019.

Supreme Court.

Permission granted on 11 February 2020.

Non Disclosure Agreements (NDAs)

Following political interest in the alleged misuse of non disclosure agreements to prevent reporting of harassment and criminal conduct, DBEIS announced its intention introduce legislation to regulate use of NDAs and to consult on a potential requirement that all employers should be entitled to a basic reference.

The Women and Equality Select Committee urged the government to treat this issue as a priority on 29 October 2019.

Announcement 21 July 2019 following consultation issued in March.

Timetable to implementation has not been fixed.

Vicarious liability for sexual assault

Barclays Bank v Various Claimants UKSC 2018/0164

Case about whether an employer is vicariously liable for the actions of an independent contractor doctor who allegedly committed sexual assaults on employees during medical examinations requested by the employer.

The High Court held that the employer was liable for any such assaults that were proved—see report of .

That decision was upheld by the Court of Appeal—see report of . Appealed to Supreme Court.

Hearing 28 November 2019.

Supreme Court judgment awaited.

ePrivacy

The is intended to replace the current ePrivacy Directive ( ) and align electronic privacy requirements with the General Data Protection Regulation, Regulation (EU) 2016/679 (GDPR).

After years of negotiations, the draft text was rejected at the end of November 2019 by the Committee of Permanent Representatives (the body responsible for preparing the business of the Council of the EU). While some progress was made on keys areas, Member States failed to overcome differences on how the proposal fits with the GDPR, how to handle cookie walls—pop-up windows that block access to websites until a user gives consent to advertising cookies—and whether an exception should be granted to allow tech companies to scan billions of images for child sexual abuse.

Croatia, which holds the presidency of the Council of the EU until June 2020, is now attempting to breathe life into the Regulation and has presented a compromise proposal. See the of 21 February 2020 and also see News Analysis: .

For the latest draft, see the of 18 November 2019.

Not known—unlikely to be before 2023 and how or if it applies in the UK will depend on the terms of the UK’s future relationship with the EU.

Data Protection

Various claimants v WM Morrisons Supermarkets PLC UKSC 2018/0213

Claim by 6,000 staff in relation to a data breach by a rogue employee who illegally shared online a spreadsheet containing bank, salary and NI details of 99,998 Morrison's staff.

The High Court held that the employer supermarket was vicariously liable for the leak of the personal data of employees. See Various Claimants v Wm Morrisons Supermarket plc and .

The Court of Appeal agreed—see report of and Various Claimants v WM Morrison Supermarkets plc , .

Appealed to Supreme Court.

Hearing 6-7 November 2019.

Supreme Court. Judgment awaited.

Copyright

The EU Directive on Copyright in the Digital Single Market ( ) is intended to harmonise copyright laws to create an effective single digital market was approved in April 2019.

The government confirmed in January 2020 that there are no plans to implement the directive following Brexit. Any future changes to the UK copyright framework will be considered as part of the usual domestic policy process.

The directive must be implemented in Europe by 7 July 2021 but will not be implemented in the UK.

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In Sports Direct International PLV v Financial Reporting Council , the Court of Appeal considered the circumstances in which a regulator, in this case the FRC, could override privilege. The court confirmed that, absent express statutory authority, there is no implied power or special status which would require an organisation to produce privileged documents to a regulator.

News Analysis:

18 February 2020

Dividends

The Supreme Court will consider whether payment of a lawful dividend may amount to a transaction defrauding creditors contrary to of the Insolvency Act 1986 ( ). In BTI 2014 LLC v Sequana SA , the Court of Appeal clarified when remedial relief under may be granted and when directors’ duties to have regard to the interests of creditors (the creditors’ interests duty) may apply.

News Analysis:

Hearing 25 March 2020

New deal for Consumers

The EU announced its planned package of reforms to deliver a new deal for consumers, these include:

• —‘GDPR level’ fines for mass harm cases
• —making it easier to bring group actions against businesses
• —additional consumer rights where consumers have suffered unfair, aggressive or misleading marketing and
• —more transparency for on-line market places

The European Parliament and the Council reached a provisional agreement on the proposed Omnibus Directive on 2 April 2019 (see: ). The agreed text was formally adopted by the European Parliament on 17 April 2019 (see: ) and by the Council on 8 November 2019 (see: ). Following publication in the Official Journal of the EU, Member States will have two years within which to transpose it into national law.

This is unlikely to become law in the UK due to Brexit, however the UK government is progressing plans for a similar package of changes to consumer law. A comprehensive consumer whitepaper will be forthcoming which is likely to include proposals for the CMA to determine breaches of consumer law and impose fines directly.

Implementation at EU level 2021.

The UK government has announced its intention to revoke the Consumer Protection Cooperation Regulation, ( ) post-Brexit and it is unlikely that any EU regulation will be adopted by the UK. Nonetheless, the UK is working on its own package of consumer rights enhancements, including giving new powers to the Competition and Markets Authority (CMA) to fine companies for breaches of consumer law.

Enforcement

The CMA undertakes a number of sector specific enforcement projects seeking to enforce consumer law and is currently investigating, eg online platforms and the funerals sector. See Practice Note: .

Pharmaceuticals, privately funded care and the construction industry continue to feature in the CMA’s enforcement work.

For information on the CMA’s ongoing competition enforcement work, see Practice Note: .

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Loyalty penalty

The CMA issued a 12-month progress update on tackling the loyalty penalty on 21 January 2020 noting that further action from the Financial Conduct Authority (FCA) and Ofcom is awaited in the interests of consumers. Potential FCA action endorsed by the CMA may include requiring insurers to automatically move consumers to cheaper equivalent deals.

Further report from the FCA awaited in the first half of 2020.

Brexit

The UK has left the EU on the basis of the Withdrawal Agreement as implemented in the and the . However, we are now in an implementation period running until 31 December 2020 during which time the UK will generally continue to abide by EU rules.

31 January 2020.

The implementation period runs until 31 December 2020 during which time the UK will generally continue to abide by EU rules.

Overseas property register

Proposed register of ownership and control of foreign companies that purchase property in the UK.

The draft Registration of Overseas Entities Bill was considered by a select committee in May 2019. The select committee and generally endorsed the proposal with some recommended improvements to minimise possible avoidance.

The government in July 2019. It stated that the types of overseas entity that will be exempt will be set out in secondary legislation, which will also set out any evidence that might be required to be presented to the land registries to demonstrate that an overseas entity is or was exempt (eg a conveyancer’s certificate). It confirmed it intends to publish, and consult on, draft regulations to ensure that the proposals are workable and will have no unintended consequences.

This moves the UK one step closer to a ‘world-first’ public register of overseas entities owning UK property.

Relevant to overseas businesses that purchase property in the UK.

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The new register is expected to become operational in 2021. Following the general election in December 2019, the draft Registration of Overseas Entities Bill has not yet been republished but it was included within the Queen’s Speech and there is no indication that the proposal is being abandoned.