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Employment eBulletin: winter 2019

28 November 2019

Our latest Employment eBulletin focuses on changes to section 1, philosophical belief in light of the recent Mulberry case, the correct calculation of holiday pay, the ‘gay cake’ case and important changes to IR35.

Good Work Plan: changes to section 1

From 6 April 2020, as part of the Government’s Good Work Plan, employers will have to provide the particulars (see link below for full list of particulars) on, or before, day one of the employment, except for information about pensions, collective agreements and training entitlements which can be provided separately within two months of the start of employment.

All of the particulars must be contained within one document, except those relating to sick pay, paid leave, pensions and training entitlements, which may be included in other documents, provided they are accessible. Any separate documents must be referred to in the principal particulars statement.

These rights are being extended to Workers too. The definition of a worker for these purposes is wider than that of employee and will therefore encompass some individuals who for tax purposes are self-employed. The distinction between employees and workers is a complex topic and one which has been considered by the Courts frequently in recent cases involving Uber, Addison Lee Pimlico Plumbers and others.

Employees can complain to an employment tribunal if an employer fails to provide accurate or complete written particulars of employment. Such a complaint cannot be brought in its own right though; it must be brought along with another claim, such as unfair dismissal, so in practice claims are rarely seen. Compensation of up to two week’s pay (capped at £525 per week) can be awarded for failure to provide the particulars.

Approaching the changes to section 1

With these changes set to take place in due course, it may make sense to include all required information in the offer letter.

Existing workers and any employees who have not been provided with written particulars, should be given the information as soon as possible after 6 April.

Consideration should be given now to how your business will assess which self-employed workers should be given the information, though in practice many of the key terms such as rate of pay, when work is to be done and where will already be agreed with the worker.

You can see a full list of the section 1 particulars including new 2020 requirements here.

Former Mulberry employee loses ‘philosophical belief’ discrimination appeal

The Court of Appeal has dismissed an employee’s claim that she suffered indirect discrimination on the ground of her philosophical belief that she should have the right to own and profit from her own creative works.

Anna Gray was employed by the luxury handbag designer, Mulberry, as a market support assistant and was asked to sign their standard copyright agreement as a condition of her employment.

Mulberry required all their employees to sign copyright agreements which was intended to protect its intellectual property rights in its designs. The copyright agreement stated that Mulberry would own the copyright in any work created by their employee in the course of their employment.

Ms Gray is a writer and a filmmaker outside of work, and refused to sign the agreement due to concerns that its wide drafting left it open to interpretation and therefore interfered with her writing and film-making work.

You can read the article in full here.

Brazel v Harpur Trust: Court of Appeal decision

The Court of Appeal has made its judgment on the correct calculation of holiday pay in the case of a permanent employee whose working pattern varied across the course of the year.

The individual, Ms Brazel, was a music teacher whose teaching duties were conducted during term time only.

She was a permanent employee, rather than a freelance, although she carried out her work only during term time and that distinction was relevant to the conclusion on holiday pay.

The Working Time Regulations 1998 and the Employment Rights Act 1996 combine together to provide that where an employee has normal hours of work, the calculation of holiday pay is by reference to those normal hours.

However, where the individual does not have normal working hours, and pay varies according to the number of hours worked, then holiday pay must be calculated on the basis of average earnings over the 12 week period prior to the holiday.

You can read the article in full here.

Personnel Today coverage on ‘gay cake’ case

Yvonne Gallagher, one of our Employment partners, comments on the ‘gay cake’ case in an article for Personnel Today.

You can read the article in full here.

Since Yvonne’s coverage in August, the customer has now taken the case to the European Court of Human Rights (ECHR), alleging that the Supreme Court in its decision has ‘blurred the lines’ and created legal uncertainty about the rights of customers not to be discriminated against on the grounds of their sexuality.

This claim is now in effect against the UK for failing to ensure that these rights are adequately protected.

This will leave the ECHR with the difficult task of balancing rights conferred by the Equality Act 2010 which appear to be, in some cases, fundamentally contradictory.

IR35 important changes: What clients and contractors with personal service companies need to know

New Off-Payroll Working Rules (commonly known as IR35) (the New Rules) for private companies are being introduced from 6 April 2020 which will affect fee payments made in respect of contractors who provide their services through intermediaries, such as personal service companies (PSCs).

The New Rules pass the responsibility for determining whether or not IR35 applies, from the PSC to the client organisation.

From April 6 2020 medium and large organisations in all sectors of the economy will become responsible for assessing the employment status of individuals who work for them via a PSC /intermediary company.

The key question for such client organisation will be ‘Would that individual worker be our employee if the contract between the individual worker and the intermediary/PSC did not exist?’

If the conclusion is that the worker would be regarded as an employee for tax purposes, the fee payer (i.e. the client organisation, or where there is an intermediary agency, the agency) will need to deduct PAYE and employee NICs from any fee paid to the intermediary/PSC and account for it to HMRC under PAYE and also pay the corresponding employers’ NICs (and any relevant apprenticeship levy).

The rules are to ensure that those who work like employees but through an intermediary /PSC pay income tax and NICs like employees. It is estimated that the UK Treasury will raise over £3.3 billion in the first five years from the introduction of the New Rules.

You can read the article in full here.

Ofcom Broadcasting Code coverage

Katerina Capras, one of our associates, shares her recommendations that broadcasters should review their internal safeguarding policies and codes of conduct in light of Ofcom’s proposed new rules to its Broadcasting Code in articles for LexisNexis and Broadcast.

You can read the LexisNexis article in full here and the Broadcast article here (£).

People Management coverage on whistleblowing

One of our Employment senior associates, Charlie Thompson, analyses the changes to the law protecting whistleblowers at work in an article for People Management.

You can read the article in full here.

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