Outcome of the Uber case

The Supreme Court has handed down a landmark judgement in the Uber case. The Supreme Court unanimously upheld the decisions of earlier courts and has found that Uber drivers are ‘workers’ and not self-employed as Uber has tried to argue. 

The decision of the Supreme Court as the final court of appeal in the UK marks the end of the case for Uber. The Uber case had been ongoing since an employment tribunal decision in October 2016 found that two former Uber drivers worked for Uber. At the time of the tribunal hearing in 2016, the number of Uber drivers operating in the UK was estimated to be around 40,000, of whom around 30,000 were operating in the London area. The ruling in this case has important implications, not just for Uber drivers, but for the many people across the country working in the gig economy.

The decision means that Uber drivers are entitled to the minimum wage (including the right to back pay), holiday entitlement and certain other employment rights. The Supreme Court also ruled that Uber drivers are ‘working’ for the entire period that they are logged into the Uber app within the territory in which they were licensed to operate and were ready and willing to accept trips, and not just during the periods that they are driving passengers to their destinations.

The judgment does not give the ‘workers’ full ‘employee’ rights, for example, a worker cannot claim unfair dismissal or a statutory redundancy payment.

Post-Brexit review of workers’ rights cancelled

In an apparent U-turn, the Business Secretary has confirmed during a television interview that a proposed post-Brexit review of EU-derived workers' rights, due to be carried out by the Department for Business, Energy & Industrial Strategy (BEIS), has been cancelled. The review was expected to consider proposals to amend the Working Time Regulations 1998, including the possible termination of the 48-hour maximum working week, changes to rules on rest breaks and excluding overtime pay from the calculation of some holiday pay entitlements. The Business Secretary has also stated on Twitter that the government wants to "protect and enhance workers' rights going forward, not row back on them”.

It therefore now seems to be the case that no changes to EU-derived employment law will be pushed through by the government in the short term. In the longer term, that position may well change.

Rogue employers named and shamed for failing to pay minimum wage

139 employers, including some of the UK’s biggest household names, have been named and shamed in a government press release for failing to pay £6.7 million to over 95,000 workers in breach of the national minimum wage (NMW) legislation.

This is the first time in over two years that the government has named and shamed employers for failing to pay the NMW, as the naming and shaming scheme was paused in 2018 so that an evaluation into its effectiveness could be carried out. The scheme has now resumed but one key change is that the press release includes a new educational bulletin which sets out the most common reasons for NMW underpayment among employers in this naming round, together with a summary of NMW guidance on paying workers.

The press release highlights that one of the main causes of NMW breaches was workers being made to cover work costs, which would take their pay below the NMW, such as paying for uniforms, training, meals or parking fees. In addition, some employers failed to raise workers’ pay after they had a birthday which should have moved them into a different NMW bracket. Two other common reasons for underpayment were failing to pay the correct rate to apprentices and failing to pay workers for working time, such as for additional work before and after their shifts or rounding clock-in time to the nearest hour.

All the employers named in the press release have now paid back their workers and were also forced to pay financial penalties.

SMP, SAP, SSP, ShPP, SPBP and SSP to rise from April 2021

According to proposals set out in a government policy paper, the revised rates for statutory maternity pay (SMP), statutory adoption pay (SAP), statutory paternity pay (SPP), statutory shared parental pay (ShPP), statutory parental bereavement pay (SPBP) and statutory sick pay (SSP) for tax year 2021/22 are to be as follows:

  • the standard weekly rates of SMP, SAP, SPP, ShPP and SPBP will increase from £151.20 to £151.97 (or 90% of the employee’s weekly earnings if that amount is lower than the statutory rate) – it is assumed this will be for payment weeks commencing on or after Sunday, 4 April 2021
  • the prescribed weekly rate of maternity allowance (MA) will increase from £151.20 to £151.97 (or 90% of the individual’s weekly earnings if that amount is lower than the statutory rate)
  • the weekly rate of SSP will increase from £95.85 to £96.35 from 6 April 2021.

The amount of the earnings threshold (currently £120.00 per week) for tax year 2021/22, below which employees do not qualify for SMP, SAP, SPP, ShPP, SPBP and SSP, is yet to be confirmed.

Immigration Act receives Royal Assent

The Immigration and Social Security Co-ordination (EU Withdrawal) Act 2020 received Royal Assent on 11 November 2020. This is the legislation which will end the free movement of persons under retained EU law in the UK at 11pm on 31 December 2020. It will also repeal other retained EU law relating to immigration.

A new points-based immigration system will apply to EU (including EEA and Swiss) citizens arriving in the UK from 1 January 2021 onwards and these workers will need to apply for a work visa in advance. They will be awarded points for a job offer at the appropriate skill level, if they speak English, and for meeting the appropriate salary threshold. Visas will be awarded to those who gain enough points. However, Irish citizens will continue to be able to enter and live in the UK as they do now.

UK and London Living Wages increase

The Living Wage Foundation has announced that its UK Living Wage has risen by 20p per hour from £9.30 to £9.50 per hour. Its London Living Wage has risen by 10p per hour from £10.75 to £10.85 per hour. Over 250,000 UK workers will now receive a pay rise as a result.

The Living Wage Foundation’s real Living Wage is an hourly rate which it calculates independently and updates annually each November. It is calculated according to the basic cost of living in the UK and London, based on a basket of household goods and services, and it is entirely separate from the government’s mandatory national living wage (NLW) which is currently £8.72 per hour for workers aged 25 and over. The new Living Wage rates apply to workers aged 18 and over. 

The Living Wage is voluntary, so employers do not have to pay it. However, many employers have committed to doing so and the Living Wage Foundation offers accreditation to those employers that do pay it. The number of accredited Living Wage employers now stands at nearly 7,000 nationally. Accredited Living Wage employers should implement the rises as soon as possible and within six months, so all affected employees should receive the new rate by 9 May 2021.

Shielding guidance for the clinically extremely vulnerable

Shielding for clinically extremely vulnerable people was paused in England on 31 July 2020. However, the government has now updated its guidance on shielding and protecting people who are clinically extremely vulnerable from COVID-19 to cover the period of the new national restrictions from 5 November to 2 December 2020. 

Whilst there is no return to the very restrictive shielding advice that was given earlier this year, from an employment perspective the updated guidance strongly advises those who are clinically extremely vulnerable to work from home. If they cannot work from home, it states that they should not attend work for the four-week period of the national restrictions. Formal shielding notification letters have again been issued to those on the government’s shielding list and these letters can act as evidence for employers that the individuals have been advised to follow shielding guidance and should not work outside of their home for the period stated in the letter. Note that the list of conditions that make an individual clinically extremely vulnerable has also been expanded to include adults with Down's syndrome, and adults on dialysis or with chronic kidney disease (stage 5). 

Where clinically extremely vulnerable employees are unable to work from home, they are entitled to receive statutory sick pay (SSP), if otherwise eligible. Alternatively, they can be placed on furlough under the extended Coronavirus Job Retention Scheme, provided they were on the payroll on 30 October 2020.

At the end of the four-week period, the guidance advises that the aim will be to return to a regional approach and further guidance will be issued for the clinically extremely vulnerable at that time. 

Finally, the guidance states that employees living in the same household as someone who is clinically extremely vulnerable can still attend work if they cannot work from home, and they should follow the general national restrictions guidance.

Coronavirus Statutory Sick Pay Rebate Scheme guidance updated

HMRC has updated its Coronavirus Statutory Sick Pay Rebate Scheme guidance to clarify the evidence that employers can require from their employees to establish the employer’s eligibility to claim under the scheme.

Eligible employers can use the scheme to claim back up to two weeks of coronavirus-related statutory sick pay (SSP) per employee. HMRC’s guidance has been updated to clarify that, although employees do not need to provide a doctor’s fit note for employers to make a claim, they can request either:

•    an isolation note from NHS 111 – if the employee is self-isolating and cannot work because of coronavirus, or
•    a “shielding note” or a letter from the employee’s doctor or health authority advising them to shield because they are at high risk of severe illness from coronavirus.

The scheme applies where employees are unable to work (including from home) because they:

•    have coronavirus symptoms
•    are self-isolating because someone they live with has symptoms
•    are self-isolating because they’ve been notified by the NHS or public health bodies that they’ve come into contact with someone with coronavirus
•    are shielding and have a letter from the NHS or a GP telling them to stay at home
•    have been notified by the NHS to self-isolate before surgery for up to 14 days.

Employers can make more than one claim per employee, but they cannot claim for more than two weeks of SSP in total for that employee.

Prepare businesses for new immigration system

The government has launched a nationwide marketing campaign to ensure businesses are ready for the introduction of the UK’s new points-based immigration system from 1 January 2021. The campaign will run throughout the autumn, using a wide range of channels to reach employers, including radio, social media, digital and outdoor advertising. The key message for employers is that the way they hire from the EU is changing – to recruit from outside the UK, they will need to be a licensed sponsor and have a sponsor licence.

Alongside the campaign, the government has also published new online guidance for employers on recruiting people from outside the UK from 1 January 2021. The guidance provides an overview of the key routes of entry to the UK for sponsored workers under the new immigration system. These include Skilled Workers (due to replace Tier 2 (General)), Intra-Company Transfers and Other Routes (e.g. Youth Mobility Scheme). 

Acas, CBI and TUC on handling redundancies

Acas, the CBI and the TUC have issued a joint statement to employers on best practice for handling redundancy situations caused by the coronavirus pandemic. The statement recognises that employers may need to make redundancies in order to survive, but it urges them to exhaust all possible alternatives before doing so and to carry out effective consultation with workers and trade unions. 

The statement then calls on all employers considering redundancies to work with their workers and trade unions and get the process right by following these five guiding principles:

  1. Do it openly: there are rules for collective redundancies (those involving 20 or more staff), but whatever the scale, the sooner people understand the situation, the better for everyone.
  2. Do it thoroughly: to understand what's happening, people need information and guidance, and staff representatives need proper training.
  3. Do it genuinely: consultation means hearing people's views before making a decision, so employers need to be open to alternatives put forward by individuals or unions and should always give feedback.
  4. Do it fairly: all aspects of the redundancy procedure should be conducted fairly and without any form of discrimination.
  5. Do it with dignity: losing your job has a human as a well as a business cost; the way an employer lets people go says a lot about the organisation's values. Employers should therefore think about how they will handle the conversation and whether it will take place face-to-face or remotely and should remember that they may want to rehire the same person in the future.