Employment Newsletter - Issue 9

31st March 2021

Employment Newsletter - Issue 9

In this edition, we will be covering:

  • Sleep in Workers not Entitled to Minimum Wage
  • Changes to the Rules Surrounding Off-payroll working
  • The end to shielding
  • No Jab, no Job Policies

Legal Update #1 - Sleep in Workers not Entitled to Minimum Wage

In a recent, much awaited, decision (Royal Mencap Society v Tomlinson-Blake and another case) the supreme court has held that workers who are required to sleep at (or near) their place of work so that they are available should they be needed but who do not have specific duties to perform will only be entitled to receive the national minimum wage for the periods of such shifts that they actually work, rather than the entire period that they are at their place of work.

This decision is a significant one and goes against the decision in British Nursing Association v Inland Revenue 2003 ICR 19 which suggested that workers could be ‘working’ for the purposes of the national minimum wage regulations in certain circumstances such as where their presence is required to meet regulatory requirements or where they could be seen to be under the direction of their employer.  All the judges in this new case agreed that there had been a mistake in the British Nursing Association case, however, they each took a slightly different view as to what this mistake had been leaving open the possibility that, on different facts, some of the arguments in that case may succeed.

In the Mencap case, the Supreme Court made clear that there is a distinction in the national minimum wage regulations between ‘working’ and being ‘available for work’ and that workers are only entitled to the national minimum wage for such periods that they are awake and have duties to perform for their employer.

From a practical perspective, this means that employers can freely negotiate a suitable allowance to be paid to any worker they require to sleep in and will only have to pay minimum wage for the hours that employee is actually working.  However, employers should also be aware that this judgement does not rule out the possibility that there may be circumstances in which a worker might be entitled to minimum wage for their entire shift. It should also be noted that the arguments considered in this case all related to working practices before March 2020 and the effect of coronavirus polices and restrictions on working practices were not considered.

Legal Update #2 – Changes to the Rules Surrounding Off-payroll working

From 6 April 2021 new rules will come into force on off-payroll working in the private sector intended to counter non-compliance with the current IR35 regime.  For many companies this means that they will be faced with a new compliance burden as they will now be required to asses whether workers provided under a contract with a relevant intermediary would be treated as employees for income tax and national insurance purposes if they were to provide their services under a direct contract with the company rather than via the intermediary.  If such workers would be treated as employees in such circumstances, then the company will be responsible for the payment of income and national insurance contributions as if they were an employee.  However, the worker will not gain any other employment rights and the intermediary will be remain responsible for payment of benefits such as statutory sick pay and statutory maternity pay.

When do the new rules apply?

The off-payroll rules will apply where a worker personally performs (or is under an obligation to perform) services for a client but will not apply where the contract is for a fully outsourced service.  Whether a contract is for a fully outsourced service or not will depend on the particular circumstances, however, HMRC guidance makes clear that this exception is only likely to apply in limited circumstances with factors such as the nature of the relationship between the worker and the client; the nature of the business; and whether other goods and services are also provided being relevant factors.

The rules also only apply where the company or partnership providing the worker fits within the definitions of a relevant intermediary: these vary depending on the type of organisation providing the services but in simple terms the company or partnership will be closely connected to the worker who either owns or controls the intermediary.  The new rules will not apply where the intermediary (usually an agency) is treated as employing the worker and operate PAYE on any earnings it pays to the worker.

The rules will also not apply where the company receiving the services is a small company within the meaning of Income Tax (Earnings and Pensions) Act 2003 or does not have a UK connection.  

What should companies do?

If your company uses workers provided by intermediary companies, you will need to determine whether these new rules apply to that relationship.  This is likely to involve considering complex or technical issues such as: is the company providing the worker responsible for PAYE as an agency; would the relationship the company has with that worker be an employment relationship if the contract was with the worker directly; and is the contract one for fully outsourced services.  The employment team at Higgs will be happy to help advise to help make sure you are compliant with the new rules.

Legal Update #3 - The end to shielding

From 1 April, individuals who are extremely clinically vulnerable will no longer be advised to shield.  This will have a wide range of consequences for these individuals and employers, including an end to their right to statutory sick pay.

From an employer’s position, the guidance remains that all workers who can work from home should continue to do so and this includes clinically vulnerable employees.  Employers should also be aware that the end of formal shielding does not mean that it will necessarily be appropriate to require clinically vulnerable employees to return to their workplace should they be unable to work from home.  Best practice would be to treat this situation in a similar way to the approach used where an employee returns to work from long term sick leave.  In addition to any general workplace risk assessment an employer has prepared in light of Covid-19, they should consider carrying out a bespoke risk assessment in relation to the clinically vulnerable employee to identify and address particular risks to them given the nature of their medical condition and their role.  This should also address any particular concerns the employee may have.  The employer should also consider whether the employee has a protected characteristic such as pregnancy or disability which would lead to additional duties.  Given the complexity of some of these issues, it may be appropriate to seek advice from occupational health or a medical practitioner.  It is also worth noting that an employer is not under any obligation to allow a vulnerable employee to return to work simply because they have requested to do so, although the employer should still consider and seek to minimise any negative impact on the employee perhaps by using the furlough scheme.  

Legal Update #4 - No Jab, no Job Policies

There has been considerable press coverage of a number of policies that seek to limit the interactions of those individuals who have not received a covid-19 vaccine as a way to try and reduce the risk of transmission of the virus.  From an employer’s perspective at an initial glance ‘no jab, no job’ policy might seem to be a way to reduce the risk that their employees, customers or other individuals may catch the virus at their premises or through contact with their staff.  However, from a legal perspective the risks of such a policy are almost certainly far greater than any potential gain except in very limited circumstances such as the care sector where the risks of spreading infection to vulnerable people is very high.

The employer would risk discrimination claims on the grounds that individuals with certain protected characteristics are unable to get the vaccine (at present pregnant women and those with certain disabilities are not eligible to receive the vaccine); requiring someone to undergo a medical intervention has serious human rights implications; and should there be significant side effects from the vaccine the employer even risks a personal injury claim.  It is also worth noting that current scientific advice seems to suggest that social distancing and other measures designed to reduce the spread of the virus will still be required for some time after the vaccine has been rolled out across the population.

However, employers should be reassured by a recent case (Kubilius v Kent Foods Ltd ET/3201960/2020) that supports the view that where employers have implemented rules or policies (in this case regarding mask wearing when in close proximity to the public) in line with official guidance, any legal requirements and their own risks assessments, then (assuming there is no medical or other good reason why the employee is not following the rules) the employer will usually be able to rely on the implied duty for employees to follow reasonable orders and the employer will be able to treat any failure to follow the rules as a failure to obey reasonable instructions for which the employer may consider grounds for a disciplinary procedure. 



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