Making changes to contracts of employment
As businesses consider a return to working, many are considering employment contracts and seeking to make changes to suit the new normal, or to save costs.
In situations where employers wish to make changes, it is best to start an open discussion (consultation) with employees. If this is successful it means that employers and employees work together to agree changes and an prevent potential disagreements or legal disputes.
Employers should set out why they need to make a change and what they need to achieve by making a change. Then, during consultation the employer should take time to explain the reason behind making the change, as follows:
- invite employees to talk about their concerns and suggest ideas for alternatives
- listen to employees’ concerns and consider their ideas
- do everything they can to resolve any employee concerns
In turn, the employee is expected to:
- consider the proposed change and reason for the change
- share the views, concerns and any ideas for alternatives with the employerir
- continue to talk to the employer about any concerns
- make sure they have tried all options to reach an agreement
Depending on the proposed change, employers might consider:
- asking for volunteers (if the change might suit some employees more than others)
- offering incentives to employees
- taking on some of the employees’ ideas
Contractual changes must be agreed in writing, within a month of the change taking effect, using a variation letter setting out the change, the date that the change takes effect and the length of time for which the change will be in place (if not a permanent change).
The types of change which might require this approach include changes to:
- the job title
- the job description
- the job location
- pay and contractual benefits
- working hours
- holiday entitlement
If an employer and employee cannot agree a change, it is worth extending the consultation period to try to reach agreement rather than force the change. If, however, agreement cannot be reached, an employer might decide to dismiss and rehire (‘re-engage’) the same employee under a new contract.
If deciding to dismiss and rehire, the employer must:
- follow a fair dismissal procedure
- give the employee enough notice (statutory notice or what’s in the contract – whichever is longest)
- offer the employee a right of appeal against their dismissal
Changes should not take place until the employee has been fairly dismissed and then rehired under the new contract. The employee keeps continuous service if the new contract starts immediately after the old contract ends.
Hairdresser wins landmark case – not self-employed
A self-employed hairdresser has won the right to claim for notice, holiday and redundancy pay in, what her lawyers say, is a ‘landmark’ case for thousands of beauty industry workers.
The claimant argued that, although her contract was as a self-employed hairdresser, the level of control she had over her working practices effectively made her an employee. She worked for six years at a Terence Paul salon in Manchester and claimed that she had to work hours set by the salon, who she also said kept 67% of her takings.
The hairdresser joined Terence Paul, which at the time ran six luxury salons, as a 19-year-old trainee in 2013. She later began work on a contract, headed ‘Independent Contract for Services’, as a self-employed hairdresser.
Terence Paul have claimed the company’s self-employed hairdressers had control over the hours and days they worked, their starting and finishing times, treatments they could give and their holidays.
But the claimant disputed this, saying she had to work from 9am until 6pm from Monday until Saturday. She also claimed that she had no control over pricing or offering discounts, had to use the company’s products, conform to Terence Paul’s standards of dress, and had to tell the salon if she wanted time off.
Protect outdoor workers from skin cancer risk
A new report has revealed an “urgent need” to protect the UK’s outdoor workers from the most common, yet preventable, cancer, with research showing that two-thirds of employees who work outside stating that they get no help from their employers to protect against skin cancer.
The report on non-melanoma skin cancer reveals that public awareness about non-melanoma skin cancer (NMSC) is worryingly low and that urgent action is needed to improve sun protection for outdoor workers.
NMSC is the most common cancer in the UK, with more new cases diagnosed every year, than breast, prostate and lung cancers combined.
The four most common signs of NMSC are:
- a scab or sore that won’t heal
- a scaly or crusty patch of skin
- a flesh coloured bump that grows
- a volcano shaped growth, often with a distinctive crater at the top of the lump.
Outdoor workers, such as construction workers and others, are more than twice as likely to develop NMSC as those that work indoors, because of increased exposure to ultraviolet radiation (UV) from the sun. However, the cancer is largely preventable and there is a legal responsibility for employers to protect the long-term health of their employees under health and safety laws.
First furlough fraud arrest
When the Coronavirus Job Retention Scheme (CJRS) was announced by Chancellor Rishi Sunak earlier this year, many analysts questioned the ability of HMRC to regulate its implementation and usage, given the mass scale on which it was adopted.
The scheme is estimated to have cost the public £19.6billion so far. By the Government’s own analysis at its height, furlough was being used by one-quarter of the UK’s workforce – yet numbers have dropped as lockdown measures continue to ease across the country.
Whilst the vast majority of cases were indeed necessary to save jobs and prevent an employment crisis, previous research has found that 34% of UK employees had been asked by their boss to work while on the scheme – something which was considered an act of fraud under the rules of the CJRS before ‘flexible furloughing’ came into play from July 1, 2020.
HMRC has now confirmed that the first arrests in connection with alleged furlough fraud have been made. The unnamed man from the West Midlands, according to details obtained by The Revenue, has been arrested in connection with an alleged fraud of the scheme. The report stated that the man was arrested on July 8, in connection with claims of a £495,000 case of abuse.
“Susan”, the worker of 2045
With more employees than ever before currently working from home, it is expected that employees may soon start to face health issues due to a lack of exercise and sunlight.
As a result, a model called ‘Susan’ has been created by clinical psychologists and fitness experts to depict what the homeworker of 2045 will look like.
After working from home for the majority of her life, Susan suffers from hunched shoulders, a double chin, obesity and ‘digital eye strain’, which includes dry, bloodshot eyes from staring at a screen all day. Susan outlines the many physical implications of what spending hours glued to a laptop can unknowingly be doing to employees’ physical and mental wellbeing.
Other issues Susan has include poor posture. A lack of exercise and too much time spent at a computer screen can lead to a hyper-extended neck, rounded shoulders and a hunchback that develops over time.
Susan also suffers from repetitive typing strain, ‘tech neck’ (also referred to as cervical kyphosis), which is an abnormal curvature of the cervical spine or neck, hair loss, dark circles, increased stress and pale, dull and wrinkly skin, which can be caused by a lack of vitamin D and B-12 due to reduced sunlight exposure.
What should employees do to prevent becoming Susan?
Maintaining physical levels while working from home is imperative to overall wellbeing and health. Working from home often leads to excessive sitting, which can have many negative effects on health, including increased blood pressure and blood sugar levels. Remaining in the same posture for hours can also have a negative effect on the muscles in the back, hip, neck and calves.
To avoid any negative effects on health, employees are encouraged to schedule a workout diary for the week, do regular desk stretches, walk during lunchtime and take regular breaks throughout the day.
Gut instinct makes may be an expensive mistake
New research has suggested that managers are relying too heavily on their gut instinct rather than objective evidence when making hiring decisions. Too often personal judgements, unconscious bias, and subjective feelings prevent businsses from hiring the most suitable candidates.
Statistically, younger hiring managers, who are likely to have less experience, are the most likely to fall into this trap. 61% of those aged under 35 said that a new recruit hadn’t been a success because they paid too much attention to their gut instinct. Businesses need to be aware of this and ensure they have a robust, fair, and transparent hiring process in order that objective data is the basis for decision-making.
The research also demonstrates that men are much more likely than women to have relied on their gut instinct with 58% stating that they had made a bad hire through over reliance on their gut instinct, compared to 42% of women. Employers who fail to use a sound process which asks candidates to demonstrate their experience and skills against evidence of past behaviour are likely to make poor hiring decisions, costing additional time and money to replace or rehire.
Reintroduction of pregnancy protection bill in Parliament
A bill to give pregnant women and new mothers enhanced legal protections against redundancy has been reintroduced to Parliament as a result of warnings that coronavirus threatens to compound existing maternity discrimination. The Pregnancy and Maternity (Redundancy Protection) Bill aims to provide women protection from redundancy when pregnant, in the six months following their child’s birth and during maternity leave.
Government data shows that thousands of women leave their jobs when pregnant because of discriminatory experiences at work, and one in 20 are made redundant. It is felt that the current law on redundancy and maternity is complex, poorly understood and difficult to enforce.
The bill is supported by the Equality and Human Rights Commission (EHRC). In July 2019, the Government has announced that pregnant workers, those on maternity leave and new parents returning to work after an extended period of family leave would benefit from enhanced redundancy protections. The change would extend redundancy protection for six months from the date of a mother’s return to work, as well as covering those taking adoption or shared parental leave.
Remember agency workers’ rights!
The Employment Appeal Tribunal (EAT) has ruled that individual workers for Royal Mail are agency workers and therefore entitled to the same employment rights as other employees. The EAT upheld a rulingagainst Royal Mail and Angard Staffing Solutions, a dedicated recruitment partner for Royal Mail, which found a group of workers should have been classified as agency workers and given the same rights as other employees within Royal Mail.
Under the Agency Workers Regulations 2010, agency workers have the right to no less favourable treatment compared to others who are employed by the organisation. This covers the same right to basic employment and working conditions; bonuses; annual leave; access to collective facilities and amenities; and paid time off for antenatal appointments, once the agency worker has completed a qualifying 12-week period.
In 2019, an employment tribunal ruledthat claimants who worked for Royal Mail and Angard Staffing Solutions, were agency workers and would be entitled to such employment rights as other staff working for Royal Mail. The tribunal heard that Royal Mail uses Angard staff to cover additional demand and unexpected needs in the case of sickness absence. Most Angard staff complete mail processing work for Royal Mail. The claimants worked regular and frequent shifts at the mail centre.
The tribunal heard they worked one or more shifts every month between this period, averaging two shifts with a total of 11 hours per week. They were then suspended and did not receive a Christmas bonus; were given shorter breaks than other Royal Mail employees and were not entitled to apply for internal vacancies.
The tribunal unanimously ruled such infringements acted against the claimants’ employment rights as agency workers. Angard and Royal Mail appealed against this decision, arguing that the claimants were not agency workers and so not entitled to the same rights as other employees. But the EAT dismissed the appeal.
If employers are taking on agency workers, businesses must take steps to ensure these workers receive the same rights as other staff at the 12-week point.
Clarity welcomed on using the Job Retention Scheme to supplement notice periods
Government guidance on the Coronavirus Job Retention Scheme (‘CJRS’) has been updated to address the use of the scheme for employees who are being made redundant, specifically whether the grant can be claimed for the employee’s notice period.
Whilst claiming a grant under the CJRS for a notice period had been viewed by many as possible, confusion arose due to a new provision in the Treasury Direction stating that it is integral to the scheme that employers use the amounts paid under the scheme to ‘continue the employment of employees’, and any grant not used for that purpose must be ‘returned immediately’. If an employee is working a notice period, the employment has been terminated, thus calling into question whether the grant could be claimed for the notice period, and if not significantly increasing the costs for an employer.
The matter has been raised with Government by trade bodies and in parliamentary questions. The guidance now includes a clear statement that a grant can continue to be claimed for a furloughed employee serving a ‘statutory notice period’.
The confirmation will be a welcome relief to businesses making redundancies, however it should be noted that the grant can only be claimed where an employee remains employed for the notice period. Amounts claimed under the CJRS cannot be used to make payments in lieu of an employee’s notice period, nor to cover any redundancy payments due to the employee.
IR35 changes in the private sector being rolled out as planned
An amendment to further delay IR35 changes in the private sector has failed to secure the necessary number of votes in parliament, confirming that the planned changes to off-payroll rules will still come into force in April 2021.
The new rules – which will shift the responsibility for deciding how contractors should be taxed onto the employing businesses – were due to come into force this April. However, the rollout was pushed back to 2021so as not to add to the burden on businesses caused by the coronavirus pandemic.
Numerous business and freelance groups – many of which had opposed the changes – had hoped this year-long delay would provide an opportunity to push implementation back even further, and for a wider overhaul of the rules. However, the amendment to further delay the rollout to the tax year 2023-24 was voted down by MPs, 317 to 254.
Under IR35, if a contractor is deemed to carry out similar or the same work as a permanent staff member, their employer is required to deduct income tax and national insurance contributions as if they were an employee. The legislation was introduced to ensure workers undertaking similar roles paid the same tax regardless of whether they were an employee or contractor, and to prevent the misuse of personal service companies for tax avoidance.
The changes to IR35 in the private sector will shift the responsibility of assessing which contractors fall into this category from the individual contractor to employers. The changes have applied to public sector employers since 2017.