ESG, good work and flexibility
Diversity and inclusion
The covid-19 pandemic continues to dominate the agenda, but employers can still expect both legislative and case law developments across all areas of employment law. This article looks at the key expected developments in England and Wales in the coming year and ends with a summary of what to expect in Northern Ireland. For expected developments in immigration law, click here.
As the pandemic continues, it is unclear whether the government will bring in new restrictions but more employment law issues can certainly be expected. A key question for 2022 is whether more employers will introduce mandatory vaccination, testing or NHS covid pass policies. It is also expected that there will be more court rulings about the furlough scheme and covid-19 safety at work (for further details, see "Employment Tribunal rulings on Covid 19 issues – what can we learn?"). The first cases to reach the appellate courts will inevitably involve events that happened in the early days of the pandemic, but lawyers will be scrutinising decisions carefully to see what guidance can be extracted for today's different circumstances.
Litigation against employers who have implemented "no jab no job" policies may also be seen, although the Employment Tribunal system is currently so backlogged that these may not reach appellate courts in 2022. It is interesting to look at the position in other countries where the system is faster – for example, France already has a body of case law on mandatory vaccination (for further details, see "Refusing COVID-19 vaccination: a first view from the French courts"). It is possible there will be rulings on when "long Covid" is a disability for equality law purposes.
ESG, good work and flexibility
2021 saw environmental, social and governance (ESG) issues emerge as a key focus for organisations across multiple sectors (see "Environmental, Social and Governance (ESG)" for further information). Employers looking to stay on top of the ESG agenda in 2022 will need to factor in several potential employment law changes.
The delayed Employment Bill – originally promised in the 2019 Queen's Speech – could be published in 2022 and is expected to include a new right to request flexible working from day one. The government's consultation on this proposal closed in December 2021, so confirmation of the final plans can be expected in 2022, if not the Bill itself. The proposed legal reforms are modest, but they form the backdrop to discussions about "new normal" working arrangements as employers look to codify practices in the coming year.
The Employment Bill is also expected to progress the Good Work agenda, by introducing a new right for workers with variable hours to request a more stable and predictable contract after 26 weeks' service and, possibly, new rights to reasonable notice of working hours and compensation for short-notice shift cancellation. The EU Transparent and Predictable Working Conditions Directive will introduce similar rights on an EU-wide basis in August 2022.
Pay and holidays
There will be an extra public holiday in 2022 (Friday 3 June) to mark the Queen's platinum jubilee, and the late May bank holiday has been moved to Thursday 2 June to make a four-day weekend.
Holiday pay calculations are always a headache but seem to have been less of a concern in recent years. It is expected that judgment will be issued in two cases in 2022, however, which may put holiday pay calculations back in the spotlight:
- Harpur v Brazel – concerning holiday pay for a casual worker who was under contract all year round but worked in term time only. The judgment could potentially clarify various holiday pay rights, including the practice of paying a holiday pay supplement of 12.07% for casual workers; and
- Smith v Pimlico Plumbers – concerning the extent of an employer's liability for holiday backpay in circumstances where the individual was treated as self-employed but was subsequently found to be a worker with entitlement to paid holidays.
The national living wage (for workers aged 23 and over) is set to rise to £9.50 an hour from April 2022, an increase of 6.6%. Adding to the ongoing pressure on wages, the social care levy will be introduced UK-wide from April 2022 and will be collected initially via a 1.25% increase in national insurance contributions. The Employment Bill may also introduce the long-awaited tips regulations governing how tips are to be distributed. There will, of course, be the usual uplifts to statutory rates and limits, including statutory sick pay and maternity pay, in April 2022.
EU member states are almost all late in implementing the EU Whistleblowing Directive, so most will be doing so throughout 2022. The directive does not apply to the United Kingdom but looks set to influence best practice here. Its key feature is the requirement to provide feedback to whistleblowers within certain specified timescales.
Modern Slavery Act
It is expected that there will be reforms strengthening the Modern Slavery Act to implement the plans announced in September 2020. When these are introduced, which could be in the coming year, companies in scope of the current reporting requirements may need to pay even closer attention to their anti-slavery statements as a result. This comes at a time of growing interest in supply chain governance as part of the ESG agenda.
Diversity, equity and inclusion will no doubt remain high on the agenda, whether as part of ESG initiatives or separately. Diversity monitoring and positive action are key topics for many employers right now. Employers often try to stay ahead of the law in this area, and there could be significant developments in 2022.
The government has promised to introduce a new proactive duty on employers to prevent sexual harassment in the workplace and to bring back laws making employers responsible if employees are harassed by customers or other third parties. Provision could be made in the Employment Bill for these changes. The Equality and Human Rights Commission may start consulting on its new Code of Practice on Harassment, building on the major guidance it published shortly before the covid-19 pandemic. The upshot could be a step change in how employers are required to manage the risks of harassment in a post #MeToo world, but much turns on the detail.
Legislation has also been promised on non-disclosure agreements since 2019. It is expected that reforms will materialise, potentially in the Employment Bill.
The detailed rules governing gender pay gap reporting are set to be reviewed in 2022. Changes could be on the cards but would probably be subject to consultation before being introduced. In the meantime, the deadlines for submitting reports are expected to return to normal this year, having been extended in 2021 because of the pandemic.
It is conceivable that there will be some progress towards the eventual introduction of ethnicity pay reporting. The March 2021 report by the Commission on Race and Ethnic Disparities did not support the introduction of compulsory ethnicity pay reporting, but calls for regulation are not going away; in fact, they are arguably increasing. The first step – potentially in the coming year – is likely to be the publication of guidance for employers wanting to report on a voluntary basis.
At the end of 2021, the government launched a consultation on the potential introduction of disability reporting on a voluntary or even compulsory basis. The consultation is open until 25 March 2022, and the government currently says a response will be published by June.
In 2021's landmark Forstater case, the Employment Appeal Tribunal (EAT) ruled that a belief that sex cannot be changed and a belief or lack of belief in gender identity are all protected by equality law. Two similar cases involving "gender critical" beliefs may come before the EAT in 2022 (Higgs v Farmor's school and Mackereth v DWP). These cases raise sensitive issues about how the law regulates the space between holding gender-critical beliefs (protected) and harassment of trans people (unlawful).
The equal pay claims brought by store workers at Asda, Tesco, Morrisons and other large retailers continue to progress through the courts. Rulings up to this point have confirmed that female store workers can compare themselves to male distribution depot workers. Subject to any further challenges on that issue, the courts will now focus on whether the relevant types of work are of equal value and, if so, whether paying different rates for them is justified. It is not expected that these cases will conclude in 2022 but there may be further rulings as they continue their journey.
By August 2022, EU member states need to have implemented the EU Work-Life Balance Directive, which includes new baseline rights for carers and working parents. The United Kingdom does not need to implement this directive but has already promised to match the new rights for carers. Under the UK government's proposals, working carers will be able to take up to five days' carers leave each year to help them carry out their caring responsibilities, although this will be unpaid. The government published some detail on how this new right will operate in September 2021 and it is expected that the Employment Bill will pave the way for its introduction.
Unrelated to the EU directive, the UK government has promised a new right to 12 weeks' paid neonatal leave for parents whose babies spend time in neonatal care units. The government has also promised to improve redundancy protection for pregnant employees and maternity returners by giving them priority for alternative employment opportunities if made redundant, with similar protections for parents returning from adoption or shared parental leave. All of these new rights are expected to be included in the Employment Bill.
Out of the other developments expected in 2022, employers should watch out, in particular, for any progress in the following areas:
- proposals for regulating non-compete clauses following the government's 2020 consultation on this issue. Regulations implementing a ban on "exclusivity clauses" in contracts for low-paid workers may also be introduced, following a consultation on this issue last year; and
- single enforcement body. The primary intention is to defragment the current regime by combining the Employment Agency Standards Inspectorate, the Gangmasters and Labour Abuse Authority and Her Majesty's Revenue & Customs' National Minimum Wage Enforcement Team into one body. The idea is also to expand this new body's remit into the enforcement of statutory sick pay, holiday pay for vulnerable workers and the regulation of umbrella companies, with other areas under consideration. The Employment Bill will pave the way for its establishment, but it is likely to be some time before it is up and running.
After a relatively quiet 2021 (covid-19 aside), 2022 looks likely to bring an increased number of changes to employment law, especially if the Employment Bill is finally published.
Many of the developments covered above are relevant for Northern Irish employers, including those relating to covid-19, ESG, whistleblowing and diversity. In Northern Ireland, there will certainly be more caselaw resulting from the pandemic, such as the furlough scheme. There may also be developments in holiday pay when the courts begin deciding cases that were put on hold pending the outcome of the dispute in the landmark holiday pay claim in Chief Constable of the Police Service of NI v Agnew and others (which appears to have settled).
At the start of 2022, apart from the usual updates to statutory rates and limits, the legislative landscape remains quiet in Northern Ireland. There are no significant proposals in place to amend existing laws and, in particular, no plans to introduce an Employment Bill. This is likely to remain the case at least until after the Assembly elections in May 2022. Further divergence may therefore be seen between the employment laws in England and Wales and those in Northern Ireland (for further details, see "Understanding the growing differences between employment laws in Great Britain and Northern Ireland: comparative employment law table").
During 2022 there may be developments in relation to the employment and equality aspects of the Protocol on Ireland/Northern Ireland, negotiated during Brexit.
For further information on this topic please contact Gemma Taylor at Lewis Silkin by telephone (+44 20 7074 8000) or email ([email protected]). The Lewis Silkin website can be accessed at www.lewissilkin.com.