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UK HR Two Minute Monthly: TUPE transfers to multiple transferees, public interest test in whistleblowing cases and unfair dismissal

April 12, 2021

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Our April 2021 update includes a case which signals a potentially significant change in approach to TUPE transfers involving multiple transferees. We also consider a recent whistleblowing case in which it was considered that a disclosure of information affecting only one person could nevertheless be in the ‘public interest’, and provide an update on other recent points of note.

An employee can TUPE transfer to multiple transferees

In an important decision, the Employment Appeal Tribunal (EAT) has held that where a TUPE service provision change involves multiple transferees, the contract of employment of a transferring employee can be split between them, with the individual’s duties divided between the transferee employers. This has the effect of splitting the employee’s employment between employers with the employee working for (in this case) two employers. This is a departure from the more established “assignment” approach of dividing employees between transferees so that each employee works for only one transferee employer.

The case involved a transfer of a service from a single contractor to two new contractors, operating in different geographical territories. The EAT said there was no reason in principle why, following a service provision change, the employee could not hold two or more

UK HR Solutions: Addressing Bullying and Harassment in the Workplace

Welcome to the next post in our weekly series of hands-on guidance for UK HR professionals. In this series we look at common HR issues that you’ll encounter in the workplace and give you practical guidance on how to deal with them. Over the course of the series we’re covering a variety of topics, such as how to handle grievances, disciplinaries, performance management, sickness absence and much more besides.

This is the first of two weeks where we focus on bullying and harassment. This time we give a brief overview of taking steps to prevent bullying and harassment, and how to manage an incident if it arises.

Read our Addressing Bullying and Harassment note >

UK HR Solutions: Managing performance issues

Welcome to the next post in our weekly series of hands-on guidance for UK HR professionals. In this series we look at common HR issues that you’ll encounter in the workplace and give you practical guidance on how to deal with them. Over the course of the series we’re covering a variety of topics, such as how to handle grievances, disciplinaries, suspension, sickness absence and much more besides.

This week we look at managing performance issues.

Click here to read our guidance note on what to do when a performance issue arises.

This article was co-written with Paralegal Peter Summerfield.

UK HR Two Minute Monthly: disability discrimination; TUPE; employment status

August 11, 2020

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As we move towards a ‘new normal’, our August 2020 update outlines some of the key non-COVID related employment law developments in the UK over the last month. It includes a TUPE-related ECJ judgment which takes a different approach to our usual domestic position, as well as cases on disability discrimination and agency workers. We also provide an update of other recent points of interest. You can find our latest UK COVID-19 employment law updates for the UK here.

Unfair dismissal of long-term sick employee does not automatically mean dismissal is disability discrimination

The Employment Appeal Tribunal (‘EAT’) has held that an employment tribunal erred in focusing on an employer’s decision-making process when considering whether a dismissal arising from disability was proportionate.

The employee was dismissed for disability-related sickness absence. The employment tribunal found that she had been unfairly dismissed. It also upheld the employee’s claim that her dismissal constituted discrimination arising from disability, rejecting the employer’s objective justification defence to the disability discrimination claim. It held that the employer’s aims of protecting scarce public resources and reducing the impact of the employee’s absence on her colleagues were legitimate but that it was not justified because it was not

Extension of UK Off-Payroll Working Rules (often referred to as “IR35”) delayed to April 2021

Summary

The extension of the UK off-payroll working rules to private sector clients, due to take effect from April 2020, has been delayed by one year. This follows growing calls from businesses and business leaders given the difficult and uncertain times faced by many in light of the coronavirus pandemic. This is a huge relief for many contractors and businesses but it is just a postponement. The extra time should be used wisely to prepare for the changes; given the year-long extension it is unlikely that HMRC’s promise not to be ‘heavy handed’ on penalties during the first year of IR35 will stand.

The delay may, however, put some in a difficult position. If, in anticipation of the new rules coming into force, it has already been determined by a private sector client that a relationship would be one of employer/employee if the intermediary was not involved, the intermediary (in most cases the contractor’s PSC) should seriously consider operating PAYE and account to HMRC for employer/employee NICs and employee income tax accordingly. HMRC previously stated that it will not carry out targeted campaigns into earlier tax years where a client determines that a worker would be an employee if engaged

IR35 – 5 key milestones to ensure you’re ready for the new UK regime

Summary

With the revised IR35 (off-payroll working) rules coming into force in the UK for private sector employers in just a few weeks, are you ready for the new regime? Here are 5 key actions to benchmark your readiness.

Are you definitely in scope for the new IR35 rules?

‘Small’ companies can continue to operate the existing IR35 regime (obligation to assess IR35 status and account for tax/NICs falls on the Personal Service Company (PSC)), rather than apply the new regime which puts the obligation on the fee payer/client.

‘Small’ companies are those that satisfy at least two of the following requirements:

  • annual turnover not more than £10.2 million;
  • balance sheet not more than £5.1 million; and
  • not more than 50 employees.

If you are a subsidiary within a group, your parent company must also satisfy the small company test for the exemption to apply.

Have you mapped all your Personal Service Company (PSC) relationships?

This includes identifying both direct engagements with PSCs as well as those provided through an agency.

Have you set up robust processes to make consistent employment status determinations and appropriately communicate them?

The client (the recipient of the consultancy services) must take

UK HR Two Minute Monthly: religious discrimination; TUPE; IR35

Summary

Our first update of 2020 outlines key UK employment law developments over the last month. It includes cases on the definition of ‘employee’ under TUPE, the impact of a job evaluation survey in relation to equal pay, direct maternity discrimination, dress codes and religious discrimination, loss of privilege, and a recent tax tribunal decision on the application of IR35. We also outline other points of note, including the publication of the ICO’s new draft guidance on Subject Access Requests.

Dismissal violated employee’s freedom of expression under Article 10 ECHR

The European Court of Human Rights has held that that an employee’s right to freedom of expression under Article 10 ECHR was violated after he was dismissed for posting on a personal knowledge-sharing website.

The employee described himself in his website blogs as an expert in HR management who worked at a large bank, but did not mention his employer by name.

The employee argued that the termination of his employment breached his right to freedom of expression and appealed to the ECHR. The Court addressed four main questions when considering whether the right to freedom of expression had been infringed:

  1. Nature of the speech – the Government argued

Medium and large businesses getting ready for private sector off-payroll working rules in the UK

Despite calls for the start date to be delayed, it appears that the extension of the off-payroll working rules to private sector engagements will go ahead in April 2020.

Under the draft legislation, responsibility for determining whether engagements with individuals who provide their services through an intermediary (typically a “PSC”) are within the off-payroll working rules shifts to the client, with the burden of operating PAYE and collecting National Insurance Contributions (“NICs”) falling on the relevant “fee payer” in the work supply chain. More detail about the requirements under the draft legislation can be found in our earlier blog.

As they prepare for the changes, many medium and large businesses are taking the opportunity to review their use of consultants and the terms of their contractor services more widely, in some cases leading to a major shake-up in engagement models. In addition to reviewing the terms which apply where a business contracts directly with a PSC, it is also important to consider the terms on which employment agencies provide contractor services.  With only six months to go until the changes go live, businesses which have not started the review process should act now.

Off-Payroll Working Rules

From April 2020 the responsibility for determining whether engagements with individuals who provide their services through an intermediary (typically a “PSC”) are within the off-payroll working rules shifts to the client for engagements in the Private Sector, with the burden of  operating PAYE and collecting National Insurance Contributions (“NICs”) falling on the relevant “fee payer” in the work supply chain.

Although it is encouraging that HMRC have reconfirmed that it does not intend to carry out targeted campaigns into previous years when individuals start paying employment taxes following the reforms, we expect that HMRC will take a robust approach to the enforcement of the new rules.

There is an enormous amount of work to be done across the private sector to ensure that medium/large businesses who are dependent on a flexible workforce are ready in time for the changes in April 2020.

Status determination and communications

When clients have determined an individual’s status for the off-payroll working rules, the client will be required to pass the determination to the party they directly contract with, as well as the individual worker.  Significantly, clients will also need to provide reasons for the determination.

It is hoped this will be an incentive to

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