ANNUAL EMPLOYMENT LAW, BUSINESS IMMIGRATION AND … · 2017-07-07 · However much of the Immigration Act 2014 is of little interest to UK business. The key changes that affect employers

ANNUAL EMPLOYMENT LAW, BUSINESS IMMIGRATION AND HEALTH AND SAFETY REVIEW

2015

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INTRODUCTION

A. KEY EMPLOYMENT CASE DEVELOPMENTS IN 2014

Holiday

Collective redundancies

Family rights

Disability discrimination

Employment status

Moving to competitors

Discipline and grievances

Constructive dismissal

TUPE

Tax

Victimisation

Pensions

Key decisions expected in 2015

B. KEY UK LEGISLATIVE CHANGES IN EMPLOYMENT LAW AND OTHER GOVERNMENT

INITIATIVES

TUPE and collective redundancies

Early conciliation

Increase in compensation limits

Change to employment tribunal fees

Financial penalties for employers losing employment tribunal claims

Discrimination questionnaires

Flexible working

Unpaid time off for ante-natal appointments

Compulsory equal pay audits

National minimum wage fines

Changes to Rehabilitation Periods

Reserve forces

www.doyleclayton.co.uk

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Fit for Work

Adoption

Shared parental leave

Parental leave

Zero hours contracts

Enforcing employment tribunal awards and postponement of hearings

National minimum wage enforcement

Unlawful deductions claims

Tax-free childcare scheme

Caste discrimination

Taxation of termination payments

Bonus cap for financial institutions

Bonus claw back – PRA authorised firms

C. DEVELOPMENTS AT EU LEVEL

D. BUSINESS IMMIGRATION

Cases

Other developments

E. HEALTH AND SAFETY

F. CONCLUSION



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INTRODUCTION

Employment

2014 kicked off with changes affecting business transfers and service provision changes taking place

on or after 31 January 2014. Changes were made to the Transfer of Undertakings (Protection of

Employment) Regulations 2006 (“TUPE”) to address concerns that TUPE went further than was

required by the European Acquired Rights Directive, was overly bureaucratic and gave rise to a

number of practical difficulties. At the same time collective redundancy consultation rules were

changed to allow transferee employers to consult with transferring employees pre-transfer about

post-transfer redundancies.

These changes highlight the Government’s attempts to make employment law more business

friendly. Another key development in this direction was the introduction in April 2014 of early

conciliation for the majority of employment tribunal claims. An employment tribunal claim cannot

be lodged unless Acas has been notified of the claim and the parties engage in conciliation or declare

they have no interest in conciliation. Employment tribunals were also given the power to order an

employer who loses an employment tribunal claim to pay a financial penalty on top of compensation

awarded. To date there have been no reports of penalties being imposed but the power only applies

to claims issued on or after 6 April 2014 and so very few claims issued since then will have reached a

tribunal hearing. For claims issued on or after 1 October 2014, employment tribunals are also

obliged to order employers to carry out an equal pay audit if they lose a pay discrimination claim.

The High Court rejected two challenges made by Unison to the lawfulness of employment tribunal

fees, which were introduced in July 2013. The challenges were made on a number of grounds,

including that fees act as a barrier to justice. The challenges were rejected due to a lack of evidence.

that anyone had been unable (as opposed to merely unwilling) to bring a claim because of cost.

Major changes affecting families will come into force in 2015 with shared parental leave being

available in respect of children due to be born or adopted on after 5 April 2015. Changes in 2014

were modest by comparison, with a new right for fathers and partners of pregnant women to unpaid

time off to accompany them to ante-natal appointments. The right to request flexible working,

previously only available to parents and carers, was extended to all employees last June.

Perhaps the biggest headache for employers has been the key judgments dealing with how to

calculate statutory holiday pay. Further developments in this area can be expected in 2015.

Business immigration

The world of immigration law continued to move at speed in 2014, driven by politics and a desire to

endlessly tinker with an imperfect system. The controversial Immigration Act 2014 became law and,

among many other related changes, reformed the removals and appeals system, changed the

interpretation of Article 8 — the right to respect for private and family life — and prevented illegal

immigrants accessing certain public services. The Act also contains new powers that are yet to be

rolled out nationally which include the introduction of an ‘NHS levy’ that all migrants must pay and

duties on landlords to check the immigration status of tenants.



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However much of the Immigration Act 2014 is of little interest to UK business. The key changes that

affect employers were introduced elsewhere – through the introduction of the new ‘right to work’

regime and New Codes of Practice governing the right to work (and the doubling of the maximum

fine for employing illegal workers); through the introduction of an unhelpful ‘genuineness’ test

across the points based system of immigration; through an enforcement crackdown by UK Visas and

Immigration and through the usual myriad changes to the Immigration Rules themselves. We set

out what you need to know in this annual review.

Health and safety

In the report by the Health and Safety Executive (“HSE”) Health and Safety of Great Britain - Be part of the solution the HSE set out its four clear objectives for the health and safety of Great Britain. These were to:

reduce the number of work-related fatalities, injuries and cases of ill health;

gain widespread commitment and recognition of what real health and safety is about;

motivate all those in the health and safety system as to how they can contribute to an improved health and safety performance; and

ensure that those who fail in their health and safety duties are held to account. All four objectives led to changes in Health and Safety across Great Britain in 2014. With an increase in campaigns and inspectors visiting different sites, health and safety remained a priority.



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KEY EMPLOYMENT CASE DEVELOPMENTS IN 2014

Holiday

Pay

The correct way of calculating holiday pay under the Working Time Regulations 1998 (“WTR”)

featured in a number of key judgments in 2014. It is now clear that workers are entitled to be paid

their normal pay for the basic four week statutory holiday entitlement and this includes any sums

intrinsically linked to the tasks carried out under the employment contract.

In Lock v British Gas, the Court of Justice of the European Union (“ECJ”) ruled that this meant that

holiday pay should include an amount to reflect commission a worker would have earned had they

not been on holiday. Otherwise, the worker would suffer a financial disadvantage at a later date as

a result of not being able to earn commission whilst on holiday. This was liable to deter him from

taking holiday and was therefore contrary to the objectives of the Working Time Directive. The case

is returning to the employment tribunal in February 2015 for a ruling on how holiday pay should be

calculated to reflect commission and what reference period should be used.

In the cases of Bear Scotland v Fulton, Hartel (UK) Ltd v Woods and Amec Group v Law, the

Employment Appeal Tribunal (“EAT”) ruled that the requirement to pay a worker their normal pay

whilst on holiday means that employers must include pay for compulsory non-guaranteed overtime

(overtime which an employee must work if offered, but which the employer is not obliged to offer)

when calculating holiday pay.

The case did not address whether pay for truly voluntary overtime (overtime which workers can

choose whether to work) has to be included. Questions also remain over whether overtime which is

worked only occasionally is part of a worker’s normal remuneration and therefore has to be included

in holiday pay calculations. Contractually guaranteed overtime (overtime that an employer is

obliged to offer and the worker must work) has always had to be factored into the calculation of

statutory holiday pay.

An issue which was a major concern for employers was how far back workers could go when

claiming in a Tribunal in respect of underpaid holiday. There was good news here for employers.

The EAT ruled that claims will be time barred if there is a break of at least three months between

deductions from wages. This means that workers are limited in how far back they can claim in

respect of past underpayments of holiday pay. Once they have been paid correctly for three months

they lose the right to claim for an earlier underpayment. Unite has confirmed that it will not be

appealing this ruling.

In the meantime the Government has confirmed that it will legislate to impose a limit on backdated

claims for holiday pay so that claims to employment tribunals cannot stretch back further than two

years. It will also provide that the right to paid holiday under the WTR is not incorporated as a term

of employment contracts, so as to preclude claims for breach of contract which could potentially go

back six years. These changes will apply to claims made to the employment tribunal on or after 1

July 2015.



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Carry over

Under the WTR, holiday leave has to be taken in the holiday year in which it accrues. It cannot be

carried forward into a subsequent holiday year. There is an exception (derived from case law) where

a worker has been unable or unwilling to take their holiday due to being on sick leave. In such cases,

the worker may carry over the leave into a subsequent leave year and if it remains untaken on

termination of employment they are entitled to be paid in lieu.

In The Sash Window Workshop v King, the EAT opened up the possibility that workers may be able to

carry over holiday which they have been unable to take for reasons other than sickness. An

employment tribunal upheld a worker’s claim that on termination of his contract he was entitled to

be paid in lieu of holiday which he had not taken throughout his employment. He argued that the

fact he was not paid for holiday meant he was prevented from taking his full entitlement. Although

the EAT overruled the employment tribunal’s decision, this was because the tribunal had not made

any findings on whether the worker had been unable or unwilling for reasons beyond his control to

take his full leave in each of the leave years for which pay was claimed. In the absence of any

findings to that effect, the tribunal had not been entitled to conclude that he was entitled to pay in

lieu of the untaken holiday on termination. The case was remitted to the employment tribunal to

consider this issue further.

The impact of the decision was reduced by the EAT’s ruling that the claim could not be brought as an

unlawful deduction from wages claim and could not therefore benefit from the more generous time

limits which allow a claim to be brought within three months of the last in a series of deductions.

The worker had been paid wages for the period he would otherwise have been on holiday and he did

not therefore lose pay, but the health and welfare benefits of taking annual leave. The remedy for a

claim that a worker has not been allowed to exercise his right to take holiday is an award of just and

equitable compensation, not wages. The claim therefore had to be brought under the WTR within

three months of the date on which it was alleged that the worker should have been permitted to

exercise the right to take holiday. This resulted in him being unable to claim holiday pay going back

throughout his employment.

Collective redundancies

In 2013, the EAT ruled in USDAW v Ethel Austin Ltd (in administration) that collective redundancy

consultation obligations are triggered whenever an employer proposes 20 or more redundancies

within a period of 90 days, irrespective of whether these are at the same or different

establishments. It ruled that s188 Trade Union and Labour Relations (Consolidation) Act 1992, which

requires the proposed redundancies to be at the same establishment if collective consultation

obligations are to be triggered, does not meet the requirements of the EU Collective Redundancies

Directive.

Following an appeal to the Court of Appeal (“CA”), the ECJ has been asked by the CA to rule on what

the Collective Redundancies Directive requires. The hearing took place on 20 November and

judgment is expected in 2015, with the Advocate General’s opinion expected to be delivered on 5

February.



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Family rights

Surrogates

In C-D v S-T, the ECJ ruled that women who receive a child under a surrogacy arrangement are not

entitled to maternity leave under European law. The purpose of maternity leave under the Pregnant

Workers’ Directive is to protect the health of the mother following pregnancy. Although it is also

intended to protect the special relationship between a mother and her child, it presupposes that the

woman has been pregnant and given birth.

The ECJ also ruled that refusing maternity leave to a woman in such circumstances is not sex

discrimination, as a father who receives a baby under a surrogacy arrangement is not entitled to

leave either. The woman is not therefore treated less favourably. In addition, there was no

question of discrimination in relation to pregnancy or the taking of maternity leave as the woman

was not pregnant and was not entitled to take maternity leave.

Note that parents through surrogacy arrangements will be eligible for shared parental leave when it

is introduced in 2015.

Enhanced paternity pay

In Shuter v Ford Motor Co, an employment tribunal ruled that an employer was justified in paying

only statutory paternity pay to a man on additional paternity leave, even though it paid full pay to

women on maternity leave. Refusal to enhance paternity pay was not direct sex discrimination as a

woman on additional paternity leave would not have received enhanced pay either.

Ford accepted that its policy was indirectly discriminatory but the tribunal accepted that it was

justified on the basis that it was aimed at recruiting and retaining women in a predominantly male

workforce and there was evidence that it was working.

The decision in this case gives a steer on the question of whether employers who enhance pay for

women on maternity leave will have to enhance pay for those on shared parental leave. Provided

men and women on shared parental leave are treated the same, it seems unlikely that a direct sex

discrimination claim can succeed. For indirect discrimination it will come down to whether a policy

of not enhancing pay can be justified, remembering of course that cost arguments are not sufficient

on their own.

Post natal depression

In Lyons v DWP Jobcentre Plus, the EAT ruled that an employee dismissed after the end of her

maternity leave following absence for post-natal depression had not been discriminated against on

grounds of pregnancy or sex.

A claim of discrimination on grounds of pregnancy or pregnancy-related illness could only succeed if

the unfavourable treatment complained of, in this case dismissal, occurred during the protected

period i.e. whilst she was pregnant or whilst she was on maternity leave.

There was no sex discrimination either. Where pregnancy-related sickness arises during maternity

leave and continues after the end of maternity leave, an employer can take absence after the end of



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maternity leave into account and provided it would have dismissed a man off sick for the same

amount of time, there will be no discrimination.

The case is a useful reminder of the limits of the protection afforded to employees off sick as a result

of a pregnancy-related sickness. Once the protected period has expired, the woman has no special

protection, even though the sickness originated in the pregnancy.

Redundancy during maternity leave

In Sefton Borough Council v Wainwright, the EAT considered the extent of an employer’s obligation

(under Regulation 10 of the Maternity and Parental Leave Regulations 1999) to offer a woman who

is redundant whilst on maternity a suitable available vacancy. It ruled that where the roles of two

employees are being replaced by one new different role, the employer must offer the new role to

the woman on maternity leave. It rejected the employer’s argument that the obligation to offer an

available vacancy was only triggered once it had decided who should be appointed to the new role

and at that point the new role was not vacant and so it was not obliged to offer it to her. However,

it did say that that the employer could have offered the new role to its preferred candidate if it had

offered the woman another suitable available vacancy. The obligation is to offer an alternative

vacancy, not all alternative vacancies.

However, a breach of Regulation 10 does not automatically mean that the employer has

discriminated against the woman because of maternity leave. This will only be the case if the reason

it did not offer her the role was because she on maternity leave. Otherwise, the remedy for a

breach of Regulation 10 is a claim of automatic unfair dismissal.

Time off for dependants

Under the Employment Rights Act 1996, an employee is entitled to take a reasonable amount of

unpaid time off to take necessary action to deal with situations affecting their dependants. The right

only applies if the employee tells their employer the reason for their absence as soon as reasonably

practicable. The dismissal of an employee for exercising the right is automatically unfair.

In Ellis v Ratcliff Palfinger Ltd, the dismissal of an employee after he took time off to take his

pregnant wife to hospital was found not to be automatically unfair. An employee is only protected if

they explain the reason for their absence as soon as reasonably practicable. As the employee had

failed to do so in this case, he had been fairly dismissed for misconduct.

Disability discrimination

Is discrimination on grounds of obesity unlawful? The ECJ ruled in Kaltoft v Municipality of Billund

that discrimination on grounds of obesity is not unlawful in itself but that obesity may be a disability

under the Equal Treatment Framework Directive where it results in a physical or mental impairment

which hinders full and effective participation in professional life on an equal basis with other

workers on a long term basis. This might be due, for example, to reduced mobility or the onset of a

medical condition which prevents them carrying out their work or causes them discomfort whilst

doing so.



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A number of cases have considered the extent of an employer’s duty to make reasonable

adjustments. In Hainsworth v Ministry of Defence, the EAT confirmed that the duty to make

reasonable adjustments only applies where the employee is disabled. The employer was not

therefore obliged to consider transferring an employee to the UK in order to accommodate the

needs of her daughter who had Down’s syndrome.

In Dyer v London Ambulance NHS Trust, the EAT upheld an employment tribunal’s decision that

there were no reasonable adjustments that an employer could have made in order to avoid having

to dismiss an employee who had developed a life-threatening allergy to aerosol body spray. The size

of the workforce at the 999 call centre where she worked and the fact that the call centre was open

to members of the public meant that steps such as displaying notices, giving advice and enforcing a

policy of no perfumes or aerosols would not have been effective and allowing her to work from

home was not an option in this case.

In General Dynamics Information Technology v Carranza, the EAT ruled that the duty to make

reasonable adjustments did not oblige an employer to disregard a final written warning for absence.

The fact that the employer had shown leniency in the past and ignored two short periods of

disability–related absence after the final warning had been given did not mean it was legally bound

to ignore all disability-related absence, regardless of the business impact.

Employment status

The Supreme Court made an important ruling on the status of LLP members in the case of Bates van

Winkelhof v Clyde & Co LLP. It ruled that LLP members can be workers, meaning that they qualify for

a range of worker rights and protections, including protection against detrimental treatment on

grounds of whistleblowing. As Miss Bates van Winkelhof, a partner in a law firm, could not market

her services as a solicitor to anyone other than the law firm, was an integral part of its business and

it was in no sense her client or customer, she fell squarely within the definition of a worker in s230

Employment Rights Act 1996.

It was necessary to distinguish between self-employed people who are in business on their own

account and who undertake work for clients or customers (who will not be workers) and those who

provide their services as part of a profession or business carried on by someone else (who may be

workers, depending on the facts of each case).

The Supreme Court’s decision has wide-ranging implications as LLP Members may qualify for a whole

range of worker rights and protections, including the right to paid holiday, working time rights, part-

time worker rights and the right not to suffer unauthorised deductions from wages.

Moving to competitors

The case of Sunrise Brokers LLP v Rodgers demonstrates that where an employee resigns without

notice in order to work for a competitor, an employer can opt to hold them to the terms of their

contract and require them to work, rather than accept the resignation and rely on post-termination

restrictions to protect its legitimate business interests. In this case, the employee refused to return

to work when instructed to do so and the CA confirmed that the employer’s decision not to pay him

was not a repudiatory breach on its part. He was not entitled to be paid as he was not prepared to



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work. The CA upheld the High Court’s decision to grant an injunction, the effect of which was to

require the employee to remain employed without pay for a period of ten months.

Whilst an injunction should not be granted if the effect is to compel an employee to work for their

employer, this was held not to be the case here as the employee had agreed a delayed contractual

start date with his new employer which gave the impression he could cope until then without pay. It

was also relevant that he had agreed to a six month post termination restriction during which there

was no question of him being paid.

In Prophet plc v Huggett, the CA ruled that the High Court had been wrong to correct a drafting error

in a non-compete clause by adding words so it made commercial sense. This was not a case where

the clause was ambiguous, enabling the Court to interpret it so as to give a commercially sensible

solution. The clause was clear and unambiguous. It reflected exactly what its draftsman intended. It

was just that the draftsman did not think through the concept underlying the words used and the

extent to which the restriction would be likely to achieve any practical effect.

This case reinforces the message that post-termination restrictions in employment contracts need to

be drafted carefully and addressed specifically to the employer’s business interests. They should be

no wider than is necessary to protect the employer’s goodwill, trade connection, trade secrets or

other confidential information and should be kept to as short a time period as possible.

Discipline and grievances

In McMillan v Airedale NHS Foundation Trust, the CA ruled that an employer who issued an

employee with a final written warning could not increase the sanction to dismissal following the

employee’s appeal. There was nothing in the disciplinary procedure which allowed the employer to

do so. A right of appeal is provided for the employee’s benefit and the fact that there was no further

right of appeal meant the employee would not be able to appeal the more serious sanction of

dismissal.

The CA stated that there is nothing wrong in principle with an employer reserving the right to

increase a disciplinary sanction on appeal. However, employers should generally only exercise such

a right where new evidence comes to light during the course of the appeal, suggesting that the

misconduct is more serious than at first considered. The employer should also provide a further

right of appeal in cases where the disciplinary sanction is increased. Where new evidence comes to

light on appeal and the employer does not have the right to increase the penalty, they would be best

advised to start the disciplinary process afresh.

In Punjab National Bank (International) Limited v Gosain, an employment tribunal ruled that an

employee who made covert recordings of both public and private panel discussions at grievance and

disciplinary hearings could rely on them as evidence in her subsequent sex discrimination claim. The

private comments of the panel were not part of the deliberations into the matters under

consideration at the grievance and disciplinary hearings and so there were no public policy grounds

for excluding the evidence. Employment tribunals have a wide discretion when it comes to

admitting evidence and the fact that recordings are made covertly is not, of itself, a ground for ruling

them inadmissible.



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As a deterrent, employers may state in their disciplinary and grievance policies that recordings are

not to be made but in reality an employment tribunal is likely to admit the recording in evidence

anyway unless there are public policy grounds for excluding it. Perhaps the safest course is to

adjourn to another room for any private deliberations or other breaks in proceedings and to be

more guarded when it comes to discussions during breaks.

Where an employer unreasonably fails to follow the ACAS code on grievance procedures and the

employee brings a successful employment tribunal claim, the employment tribunal may increase the

employee’s compensation by up to 25%. In Cadogan Hotel Partners Ltd v Ozog, the EAT ruled that

the Acas code requires a grievance to be raised in writing. An uplift in respect of a failure to follow

the code can therefore only be made where the grievance is raised in writing.

Constructive dismissal

An issue which commonly arises in constructive dismissal cases is whether an employee has affirmed

the contract following the employers’ repudiatory breach of contract, resulting in him losing the

right to resign and claim constructive dismissal.

In Chindove v William Morrisons Supermarkets plc, the EAT ruled that a six week delay in resigning

did not preclude an employee from claiming that he had been constructively dismissed. Delay in

itself does not defeat a claim for constructive dismissal, although it may be a relevant factor. The

key issue is whether the employee has shown by his conduct that he has made a choice whether or

not to affirm the contract. The fact that the employee was on sick leave was important. If an

employee continues to work following a repudiatory breach, this suggests that they are honouring

their contract, which is inconsistent with constructive dismissal. However, where an employee is on

sick leave it is not so easy to infer that they have affirmed the contract. In the EAT’s view, six weeks

for a warehouse operative who had worked for nine years in a steady job for a large company was a

short period of time from which to infer from his conduct that he had decided to waive the breach

and affirm the contract.

In Cockram v Air Products plc, an employee who gave seven months notice of his resignation when

he was only required to give three months by his employment contract was found to have affirmed

the contract and lost the right to claim that he had been constructively dismissed. By giving more

notice than was contractually required, he was offering additional performance of the contract to

what was required and additional performance may be consistent with affirming the contract. The

employment judge had been entitled to find that by giving notice which greatly exceeded his

contractual notice period, solely for his own financial reasons, the employee had affirmed the

contract.

Until 2014, it was thought that the “last straw” doctrine, which allows an employee to resign in

response to an event which is itself relatively minor, but which when taken together with a chain of

earlier events amounts to a repudiatory breach, only applied to employees seeking to claim

constructive dismissal. By contrast, an employer could only dismiss an employee without notice if

the last incident relied on as justifying dismissal amounted to a repudiatory breach of contract.

However, in Kearns v Glencore UK Limited, the High Court ruled that where an employer is seeking to

show that an employee has breached the implied term of trust and confidence, it is entitled to rely

on the “last straw” doctrine. Against a background of past lateness and absence, the employer was



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therefore entitled to treat the employee’s conduct in failing to attend two meetings whilst on a

business trip in Singapore as amounting to a repudiation of the contract entitling it to dismiss him

with immediate effect.

TUPE

Is there a TUPE transfer?

Although TUPE does not apply where there is a share acquisition, the CA previously ruled in Millam v

Print Factory that TUPE may apply where, following a share acquisition, the business of the acquired

company is integrated into the purchaser’s business and carried on by the purchaser. This principle

was extended by the EAT in Jackson Lloyd and Mears Group v Smith, where the EAT ruled that there

can be a TUPE transfer where, following a share acquisition, the business of the company is

integrated into the purchaser’s parent company. The evidence showed that day to day control of

Jackson Lloyd’s business activities had passed to the purchaser’s parent company and the

employment tribunal had therefore been entitled to find that the employees had TUPE transferred

to that company.

TUPE does not apply on a change of service provider if the client intends that the activities will,

following the change of service provider, be carried out in connection with a task of short term

duration. In Robert Sage t/a Prestige Nursing Home v O’Connell, the EAT upheld the tribunal’s

decision that this exception did not apply as it could not be said that the Council intended the care

cover provided by the new contractor to be short-term, in circumstances where it had no control

over the duration of the contract. This depended on the outcome of an application to the Court of

Protection which could result in the patient being transferred into residential care and no longer

being cared for at home. The Council’s “hope and wish” that the contract would be of short

duration did not amount to an intention and the TUPE exception did not therefore apply.

Information and consultation

Transferor employers are required by TUPE to provide their employees with information about any

measures the transferee proposes to take after the transfer. To enable it to do this, the transferee

has to provide the transferor with information about any measures it proposes to take after the

transfer. The EAT’s decision in Allen and others v Morrisons Facilities Services Ltd shows that

transferring employees only have a right of redress in limited circumstances where the transferee

provides inaccurate information about proposed measures. Transferring employees could not bring

a claim against the transferee employer as it had no obligation to provide them with information.

The transferee’s obligation was to provide the information to the transferor. The employees could

only claim against the transferor employer. However, the transferor would not be in breach of its

obligations if it gave the employees all the information it had about the proposed measures it

envisaged that the transferee would take. In that case the employees had no redress.

It is only if the transferor argues that it was not reasonably practicable for it to comply with its

obligations due to the transferee’s default and joins the transferee as a party to the proceedings that

there is a chance of redress against the transferee.



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Employee liability information

The case of Eville & Jones (UK) Ltd v Grants Veterinary Services shows that a transferor employer’s

failure to provide employee liability information can prove costly. The transferor was ordered by an

employment tribunal to pay £65,500 compensation to the transferee, representing the minimum of

£500 per employee, after it failed to provide information about potential claims following its failure

to pay employees their salaries. There was no basis for awarding less than the minimum

compensation as the failure had not been inadvertent or insignificant and the fact that the amount

awarded was more than the loss suffered by the transferee did not matter.

Tax

Injury to feelings compensation

In Moorthy v The Commissioners for Her Majesty’s Revenue & Customs, a tax tribunal clarified the

tax treatment of compensation which is paid for injury to feelings in connection with a complaint of

discrimination. Where the compensation relates to dismissal (i.e. it is paid because a dismissal is

tainted by discrimination), it is taxable as a termination payment under s401 Income Tax (Earnings

and Pensions) Act 2003. However, where compensation is paid for injury to feelings in respect of

acts of discrimination occurring during employment, it is not taxable at all.

When drawing up settlement agreements, employers need to give careful consideration to the tax

treatment of the different elements of the compensation payment. Where acts of discrimination

occurred both during employment (unrelated to termination) and on termination, injury to feelings

payments should be separated out and their tax treatment specified separately. Payments for

discriminatory acts unrelated to termination can be paid without deducting tax, but any payments in

respect of acts connected with the dismissal will need to be taxed under the rules relating to

termination payments.

Bonus claw backs

In HMRC v Martin, the upper tier tax tribunal ruled that a taxpayer who repaid part of a signing on

bonus under a contractual claw back provision was entitled to reclaim the tax paid on the clawed

back bonus. The repaid bonus was negative taxable earnings in the tax year in which it was repaid

and could be deducted from any positive taxable earnings in that tax year.

Key to the decision was the fact that the bonus was repaid pursuant to a contractual provision which

required repayment if the employee left early in accordance with the contract. The employee’s

early departure did not involve any breach of contract on his part and the repayment of the bonus

did not therefore represent damages for breach of contract (which could not constitute negative

taxable earnings).

Victimisation

The question of whether the Equality Act 2010 protects against victimisation occurring after

employment has terminated was finally resolved by the CA in 2014. There had been conflicting

decisions at EAT level on this issue but the CA confirmed in Jessemey v Roestock that post-



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employment victimisation is covered. Mr Jessemey could therefore claim victimisation when his

former employer provided a bad reference because he had made a complaint of age discrimination.

Pensions

The case of IBM UK Holdings Ltd v Dalgleish demonstrates the need for employers to take care when

communicating with pension scheme members over proposed changes to pension schemes. The

High Court ruled that communications from the employer in relation to previous restructuring

exercises had led employees to expect that there would be no further changes to the defined benefit

pension scheme over a long-term horizon. The proposed closure of the scheme to future accrual

therefore resulted in the employer breaching its duty of good faith which can result in a Court

ordering benefit changes to be unwound.

The Court ruled that remedies for breach of an employer’s consultation obligations are not limited

to those set out in Regulation 18 of the Occupational and Personal Pension Schemes (Consultation

by Employers and Miscellaneous Amendment) Regulations 2006 which require an employer to

consult about listed pension changes. Regulation 18 does not preclude a claim for breach of an

employer’s contractual duty of good faith and employers should not therefore assume that remedies

for failure to consult are limited to a financial penalty, the remedy under the Pensions Consultation

Regulations.

KEY EMPLOYMENT DECISIONS EXPECTED IN 2015

A number of key decisions are expected in 2015 including:

The ECJ’s decision in USDAW v Ethel Austin Ltd (in administration) on whether s188 Trade

Union and Labour Relations (Consolidation) Act 1992, which requires that proposed

redundancies must be at the same establishment when determining whether collective

consultation obligations are triggered, meets the requirements of the EU Collective

Redundancies Directive. The Advocate General’s opinion is expected on 5 February 2015;

The employment tribunal’s decision in Lock v British Gas on whether the WTR can be

interpreted in line with the ECJ's decision that holiday pay should include an amount to

reflect commission a worker would have earned had they not been on holiday. If it

concludes that the WTR can be so interpreted it will also rule on the level of holiday pay to

which the claimant was entitled. The hearing takes place on 4 February 2015; and

The CA’s decision on Compromise Agreements Ltd’s application to appeal the High Court’s

rejection of its judicial review application challenging the lawfulness of the unfair dismissal

compensation cap. The application was heard between 25 July and 24 October 2014 and

judgment is awaited.



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A. KEY UK LEGISLATIVE CHANGES IN EMPLOYMENT LAW AND OTHER GOVERNMENT

INITIATIVES

CHANGES IN 2014 TUPE and collective redundancies Regulations making changes to the Transfer of Undertakings (Protection of Employment) Regulations 2006 and to collective redundancy laws came into force on 31 January 2014. Revised guidance was also published. The main changes were:

A clarification to the Service Provision Change test which applies to outsourcings, insourcings and re-tenderings. TUPE applies if the activities carried out by the new provider are “fundamentally the same” as those carried out by the previous provider. This clarifies that where there are significant changes to the activities, TUPE may not apply;

Employee liability information must now be provided by the old employer to the new employer at least 28 days before the transfer (previously 14 days);

Redundancy consultation which begins before the transfer can count for the purposes of complying with the collective redundancy consultation rules, provided that the transferor and transferee can agree. This allows transferee employers to carry out collective redundancy consultation with representatives of transferring employees before the TUPE transfer takes place, and should streamline and shorten the amount of time employers need to spend carrying out collective redundancy consultation;

Amendments to employees’ protection from dismissal. These are designed to reflect the EU Directive and case law more closely. A dismissal is automatically unfair if the “sole or principal reason for the dismissal is the transfer”. However, a dismissal can be fair if the sole or principal reason for dismissal is an economic, technical or organisational reason (“ETO reason”) entailing changes in the workforce;

Place of work redundancies are potentially fair dismissals under TUPE. Previously they were automatically unfair;

Amendments to the restrictions on employers making changes to employees’ contracts after the transfer. Again the changes are designed to reflect the EU Directive and case law more closely. Changes to contracts are void if the “sole or principal reason for the variation is the transfer”. However, employers may be able to make changes where the sole or principal reason for the variation is an ETO reason entailing changes in the workforce. Harmonisation of terms is still not permitted;

Allowing contractual terms incorporated from collective agreements to be varied after one year has passed following the transfer, as long as the contract is no less favourable overall to the employee; and

Relaxation of information and consultation requirements for micro businesses of 10 employees or fewer.



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Early conciliation The new early conciliation process came into force on 6 April 2014. In most cases it is not now possible to lodge an employment tribunal claim without first notifying ACAS of the claim and obtaining an early conciliation certificate.

Following notification, ACAS must make reasonable attempts to contact the parties to see if they wish to engage in settlement discussions (there is no obligation to do so). The ACAS conciliation officer has a period of up to a month to try to promote a settlement, although this can be extended by up to 14 days if the parties agree and the conciliation officer considers there is a reasonable prospect of achieving a settlement in that time.

If at any point the conciliation officer considers that a settlement is not possible (including where he is unable to contact either of the parties after making reasonable attempts to do so) or if the period for early conciliation expires without a settlement having been reached, ACAS must issue an early conciliation certificate. The certificate includes a unique reference number which the claimant has to include on the claim form when submitting their tribunal claim. ACAS will send a copy of the certificate to the claimant and, where it has had contact with the respondent, to the respondent. In certain circumstances it is not necessary to comply with these requirements. These are where:

Another claimant presenting their claim on the same claim form has already done so;

The claim form also includes a claim of a type where early conciliation is not required (such claims are very limited);

The respondent has already contacted ACAS in relation to that dispute; or

A claim for unfair dismissal is accompanied by a claim for interim relief. The early conciliation process also impacts on time limits for lodging employment tribunal claims. Where there is more than one month of the time limit left when a claimant notifies ACAS of their claim, the clock stops running and re-starts the day after the early conciliation certificate is received. Where there is one month or less of the time limit left when a claimant notifies ACAS of their claim, the time limit for lodging the claim expires one month after the date when the early conciliation certificate is received. Increase in compensation limits From 6 April 2014, the cap on the compensatory award for unfair dismissal increased to £76,574, or 52 weeks' gross pay if lower. The maximum amount of a week’s pay used for calculating the basic award for unfair dismissal and statutory redundancy payments also increased to £464. Change to employment tribunal fees Certain employment tribunal claims were reclassified as Type B claims, meaning that they attract a higher fee. Affected claims include equal pay claims; claims that an employer failed to inform or consult under TUPE; and claims that an employer refused to allow compensation, payment or compensatory rest under the Working Time Regulations 1998. The new fee applies to claims issued on or after 6 April 2014. The changes are designed to correct errors made when fees were introduced in July 2013.



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Financial penalties for employers losing employment tribunal claims Employment tribunals have been given the power to order a losing employer to pay a financial penalty to the Secretary of State. The power applies to cases presented on or after 6 April 2014. The penalties, ranging from £100 to £5,000, can be imposed by employment tribunals where the employer’s breach of employment rights has “one or more aggravating factors”. The amount of the penalty halves if payment is made within 21 days, and employment tribunals must take account of the employer's ability to pay when deciding on the level of the penalty. It will be for employment tribunals to decide whether there are aggravating factors, taking into account any factors they consider relevant, including the circumstances of the case and the employer's particular circumstances. The explanatory notes to the legislation suggest that factors that may be relevant include the size of the employer; for how long the employment right has been breached and whether the employer has repeatedly breached that right; the behaviour of the employer and employee; whether the action was deliberate or malicious; and whether the employer had a dedicated human resources team. Discrimination questionnaires

Discrimination questionnaires were abolished from 6 April 2014. However, claimants are still able to serve requests for information and statistics on respondents, and it is still possible for an employment tribunal to take answers into account when determining claims. ACAS has published guidance on asking questions and responding to questions following the abolition of questionnaires. Flexible working From 30 June 2014, all employees with 26 weeks’ service have the right to request flexible working, instead of just parents and carers. A flexible working request can be made to change the hours an employee is required to work, the times when they are required to work and where they work. An application must be made in writing, state whether the employee has made any previous application and, if so, when and the application must be dated. The procedures an employer has to follow have become less prescriptive and have been replaced with an obligation to consider requests in a “reasonable manner” and to notify employees of their decision within three months. Acas has produced a code of practice to help employers handle requests reasonably. Employers should follow this as it will be taken into account by employment tribunals considering complaints. The grounds for refusing a request remain the same as previously and the maximum amount of compensation for breach of flexible working rights remains 8 weeks’ (capped) pay. Unpaid time off for ante-natal appointments From 1 October 2014, employees are able to take unpaid time off work to attend up to two ante-natal appointments with a pregnant woman (up to a maximum of six and a half hours for each appointment). The right is available to the pregnant woman's husband, civil partner or partner (including same-sex partners), the father or parent of a pregnant woman's child, and intended parents in a surrogacy situation. BIS has published guidance for employers on the new right.



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Employees are also protected against detrimental treatment and dismissal in relation to taking unpaid time off to accompany a woman to ante-natal appointments. Compulsory equal pay audits For claims issued on or after 1 October 2014, employment tribunals are obliged to order employers found guilty of pay discrimination to carry out and publish an equal pay audit. An audit must:

Include relevant gender pay information related to the descriptions of employees specified by the tribunal;

Identify any differences in pay between men and women and the reasons for those differences;

Include the reasons for any potential equal pay breach identified by the audit; and

Set out the employer's plan to avoid breaches occurring or continuing. The audit must be sent to the employment tribunal and published on the employer’s website where it must remain for three years. Where an employer without reasonable excuse fails to conduct a satisfactory audit, the employment tribunal can order it to pay a penalty not exceeding £5,000 and specify a new date by which it must be provided with an audit. Failure to comply may result in a further penalty of up to £5,000. An employment tribunal does not have to order an employer to carry out an audit where:

The employer has carried out an audit in accordance with the legislation within the three years preceding the tribunal’s judgment;

It is clear, without an audit, whether any action is required to avoid equal pay breaches from occurring or continuing;

The breach found by the tribunal gives no reason to think that there might be other breaches; or

The disadvantages of an audit would outweigh its benefits. National minimum wage fines Employers who do not pay the national minimum wage now face a penalty of up to 100% of the unpaid wages of all workers underpaid and a maximum penalty of £20,000. Previously the penalty was set at up to 50% of the unpaid wages and a maximum penalty of £5,000. The Government also has a revised enforcement strategy, which includes naming and shaming employers. The Government plans to increase fines for national minimum wage breaches further by setting penalties on a per worker basis, meaning that that employers could face a fine of up to £20,000 in respect of each underpaid worker. A provision allowing it to do this has been included in the Small Business, Enterprise and Employment Bill 2014.



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Changes to Rehabilitation Periods Rehabilitation periods were reduced from 10 March 2014, meaning that fewer convictions need to be disclosed when making job applications. Under the changes, rehabilitation periods for custodial sentence and community orders include the period of the sentence plus an additional period, rather than all rehabilitation periods starting from the date of conviction, as was previously the case. Details of the changes are as follows: Custodial sentence

Sentence length Previous rehabilitation period

(from date of conviction)

New rehabilitation period (period of

sentence plus “buffer” period below

which applies from date of sentence

0-6 months 7 years 2 years

6-30 months 10 years 4 years

30 months – 4 years Never spent 7 years

Over 4 years Never spent Never spent

Non-custodial sentence

Sentence Previous rehabilitation period

(from date of conviction)

Buffer period which applies from end of

sentence

Community order

(and youth

rehabilitation order)

5 years 1 year

Sentence Previous period New period

Fine 5 years I year (from date of

conviction)

Absolute discharge 6 months None

Conditional discharge, referral

order, reparation order, action plan

order, supervision order, bind over

order, hospital order

Various – mostly between

one year and length of the

order

Period of order

As with the old scheme, the above periods are halved for persons under 18 at the date of conviction (except for custodial sentences of up to 6 months where the buffer period is 18 months for persons under 18 at the date of conviction). The changes were made by the Legal Aid, Sentencing and Punishment of Offenders Act 2012. Reserve forces From 1 October 2014, the two year qualifying period for unfair dismissal claims was removed for

dismissals connected with an employee’s membership of the Reserved Forces. Small and medium-



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sized employers are now also entitled to receive payments if reservists in their employment are

called out for service.

LEGISLATIVE CHANGES IN 2015 Fit for Work The Fit for Work service was expected to be launched in late 2014. The service’s website,

http://fitforwork.org/ was launched in December. The service offers free, expert and impartial

work-related health advice to employers and a referral service to an occupational health

professional for employees who have been off sick or who are likely to be off sick for four weeks or

more. The aim is to assist employees on long term sick leave to return to the workplace as soon as

possible. An occupational health professional will provide state-funded occupational health

assessments reporting back to the employer, employee and GP on how best to enable a return to

work. The advice service is live, but the referral service is being rolled-out over a period of months

and no start date has been specified for the roll out.

There will also be a tax exemption, capped at £500, for health-related benefits paid for by employers to support an employee’s return to work. The exemption is provided for by the Income Tax (Recommended Medical Treatment) Regulations 2014 which came into force on 1 January 2015. Adoption

New right to paid time off for adoption appointments

From 5 April 2015, adopters will be able to take time off to attend appointments to meet the child they intend to adopt, up to a maximum of six and a half hours for each appointment. The key points of the new law, contained in the Children and Families Act 2014, are as follows:

Employees adopting a child or children on their own will be entitled to paid time off to attend up to five appointments;

Employees adopting a child or children with another (joint adopters) may elect for one of them to take paid time off to attend up to five appointments, while the other may take unpaid time off to attend up to two appointments;

The time off which can be taken for each appointment (whether paid or unpaid) is a maximum of six and a half hours;

Employees who are entitled to take time off to attend adoption appointments will be able to bring a tribunal claim if their employer: unreasonably refuses to let them take paid or unpaid time off to attend adoption

appointments; or

fails to pay all or part of any amount to which they were entitled when exercising the right to take paid time off.

Employees are protected from dismissal and from being subjected to a detriment as a result of exercising the right; and


http://fitforwork.org/


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An employee will not be able to take paternity leave if they have exercised the new right to

take paid time off to attend an adoption appointment in respect of that child.

Changes to adoption leave and pay From April 2015, changes will be made to adoption leave and pay as follows:

No qualifying period of employment will be required to qualify for adoption leave (currently employees need 26 weeks’ service); and

Statutory adoption pay will be raised to 90 per cent of salary for the first six weeks (currently it is paid at the prescribed rate).

These changes will bring entitlements for adoptive parents into line with those for birth parents.

Shared parental leave

Shared parental leave (SPL) will be available in respect of children expected to be born or adopted on or after 5 April 2015. SPL is available for birth parents, adoptive parents, placements under the fostering for adoption scheme and surrogacy arrangements that use parental orders. Parents will be able to take SPL at the same time as each other or separately. Qualifying parents will be able to share between them up to 50 weeks of leave and 37 weeks of pay (that is, everything other than the compulsory maternity leave period). In order to qualify for SPL, employees need 26 weeks’ service at the end of the 15th week before the expected week of childbirth or the week they are notified of being matched for adoption. The mother/primary adopter must bring their maternity/adoption leave to an end in order to opt in to the shared parental leave system. The mother will be entitled to give notice that she wishes to end her maternity leave and start SPL before the child's birth. However, she can change her mind within six weeks of the birth. Both parents will need to give their respective employers eight weeks' notice of their entitlement to and intention to take SPL and claim shared parental pay (SPP). Employees will be required to provide a non-binding indication of their expected pattern of leave when they give this notification. Each employee can make up to three notifications for leave or changes to periods of leave, inclusive of the original request to take SPL. Leave can be taken as one continuous period of SPL or the employees can request several discontinuous periods. If employees wish to take several blocks of leave, they must give their employers eight weeks' notice in respect of each period of leave. The eight weeks will include a two week discussion period between the employer and employee. Employers will not be obliged to agree to the SPL pattern proposed by their employees unless leave has been requested as one continuous period. The parents' respective employers will not need to contact each other to discuss their employees' leave entitlements. The default position where agreement cannot be reached will be for a parent's portion of leave to be taken in one continuous block, to start on a date of their choice. Each parent taking SPL will have 20 KIT-style days, on top of the mother's 10 KIT day entitlement

during maternity leave. These will be called SPLIT days – “shared parental leave in touch.”



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In most cases, an employee returning to work from SPL will have the right to return to the same job no matter how many periods of shared parental leave they have taken, as long as they have taken 26 or fewer weeks' leave in total. This 26-week total will include periods of maternity, adoption, paternity and shared parental leave. Once they have exceeded 26 weeks' leave, they will only have the right to return to the same or another suitable and appropriate job. Shared parental pay is paid at the prescribed rate, not 90% of earnings. Additional paternity leave is being abolished. The Government has published guidance on shared parental leave and pay for both employers and employees and Acas has also published guidance. Parental leave The right to take unpaid parental leave is being extended from 5 April 2015. Currently parents can take up to 18 weeks’ unpaid time off per child and the right cannot be exercised after the child’s fifth birthday. From 5 April 2015, the right is being extended so that parents can exercise the right up until the child’s 18th birthday. This is already the case in respect of disabled children. The changes are contained in the Maternity and Parental Leave etc. (Amendment) Regulations 2014. Zero hours contracts The Government intends to ban exclusivity clauses in zero hours contracts so that those employed on zero hours contracts are free to work for more than one employer. Provisions contained in the Small Business, Enterprise and Employment Bill 2014 render unenforceable terms in zero hours contracts which prohibit workers from working for another employer, or from doing so without their employer's consent. This means that if a zero hours worker works for another employer, the original employer cannot take any legal action to prevent the worker from doing so. This will apply to all existing and future zero hours contracts from commencement of the Act.

Further regulations may provide for:

Financial penalties to be imposed on employers;

Compensation to be paid to zero hours workers;

Jurisdiction to be conferred on employment tribunals; and

Rights to be conferred on zero hours workers. The Government has also announced plans to develop industry-led/owned sector specific codes of practice on the use of zero hours contracts. Enforcing employment tribunal awards and postponement of hearings The Small Business, Enterprise and Employment Bill 2014 includes provisions designed to penalise employers who fail to pay tribunal awards and to reduce delays in employment tribunal hearings caused by postponements.



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The Bill includes provisions which:

Aim to reduce delays in employment tribunals caused by frequent and short notice postponements. The Bill allows for a limit to be placed on the number of successful applications for postponement of an employment tribunal a claimant or respondent can be granted. Judges will be able to grant further postponements in exceptional circumstances. In addition, judges will be required to consider making costs orders where successful applications for postponement are made; and

Apply a penalty to employers who fail to pay a tribunal award, amounting to 50% of the amount outstanding, subject to a minimum of £100 and a maximum of £5,000 and which is reduced by 50% if paid within 14 days.

National minimum wage enforcement The Small Business, Enterprise and Employment Bill 2014 also contains provisions designed to deter

breaches of national minimum wage laws by amending the power to set the maximum penalty for

underpayment so that it can be set on a per worker basis. This means that employers will face a fine

of up to £20,000 in respect of each underpaid worker.

Unlawful deductions claims

Legislation is being introduced which limits how far back a claim for an unlawful deduction from

wages can go. The Deduction from Wages (Limitation) Regulations 2014 provide that employment

tribunals will only be able to consider claims where the wages from which the deduction was made

were paid within the previous two years. The change, which applies to claims issued on or after 1

July 2015, was brought about following the holiday pay cases and concerns that workers could bring

claims for underpaid holiday going back a number of years as a series of deductions from wages.

Although the EAT’s decision in Bear Scotland v Fulton limited workers’ ability to claim arrears to a

large extent, there was a significant risk that its decision would be overturned and the Government’s

decision to legislate provides a degree of certainty on the issue going forwards. The Regulations also

provide that the right to paid holiday under the WTR is not incorporated as a term of employment

contracts, so as to preclude claims for breach of contract which could potentially go back six years.

Tax-free childcare scheme A new tax-free childcare scheme will be launched in autumn 2015. Under the scheme, working families will be able to claim 20% of qualifying childcare costs for children under 5 (and children with disabilities under 17) from autumn 2015. The scheme will be extended to children under 12 within the first year of its operation. Claims will be capped at £2,000 per child per year. If one family member is an additional rate taxpayer, the family will not be eligible to participate. The new scheme will replace the current employer-supported childcare schemes. However,

employees registered for employer-supported childcare before the commencement of the new

scheme will be able to continue to participate in the employer scheme for as long as the employer

offers it, or may switch to the new scheme.



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A working family will not be able to participate in both an employer-supported scheme and the new

scheme. However, the provision of workplace nurseries by employers will not be affected by the

introduction of the new scheme and families will be able to benefit from both.

Unlike the current system, the new scheme will not depend on participation by employers. Further, the new scheme will not involve salary sacrifice, so the NICs advantages currently enjoyed by participating employers will no longer arise. Caste discrimination The Government plans to introduce legislation making caste discrimination unlawful.

Section 97 of the Enterprise and Regulatory Reform Act 2013 (“ERRA 2013”) (which came into force on 25 June 2013) requires the Government to amend the Equality Act 2010 by order to provide that caste is an aspect of race, therefore making caste discrimination unlawful. Consultation on proposed legislation was planned to take place in the autumn of 2014 but no consultation has been issued to date. Taxation of termination payments In 2014, the Office for Tax Simplification proposed that the current £30,000 tax exemption for

termination payments should be scrapped and replaced with a new income tax relief available only

to employees who qualify for a statutory redundancy payment.

The proposal is that all payments made on termination of employment to an employee who qualifies

for a statutory redundancy payment should qualify for income tax relief, irrespective of the nature of

the payment and whether it derives from the employment contract. This would mean, for example,

that contractual payments in lieu of notice and payments for post termination restrictions (both of

which are currently subject to income tax) would be covered by the relief and not be taxable. The

amount of the income tax exemption would be either a multiple of the employee’s statutory

redundancy payment or, alternatively, a flat amount.

If the OTS’s proposals are adopted, it would mean that payments made to employees in cases other

than statutory redundancy would not qualify for relief and would be taxed in full.

The Government’s response to the proposals is awaited.

Bonus cap for financial institutions Bonuses paid by banks, building societies and investment firms in 2015 in respect of performance in the 2014 calendar year will be subject to the EU cap on bonuses. Bonuses will be capped at 12 months’ basic pay, or 24 months with explicit shareholder approval. Bonus claw back – PRA authorised firms From 1 January 2015, Prudential Regulation Authority regulated firms will have to ensure that variable remuneration is subject to claw back for a period of at least seven years from the date on which it was awarded. Claw back will only apply to variable remuneration awarded on or after 1 January 2015. Variable remuneration will be subject to claw back where there is reasonable



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evidence of employee misbehaviour or material error or where the firm or business unit suffers a material failure of risk management.



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B. DEVELOPMENTS AT EU LEVEL Pregnant Workers Directive On 18 June 2014, the European Commission announced it would not be proceeding with plans to amend the Pregnant Workers’ Directive. The amendments would have seen the minimum maternity leave increase to 20 weeks (up from 14) and require employers to pay full pay for the 20 weeks. Whilst in the UK, employees are entitled to 52 weeks’ leave, this is only paid for 6 weeks at 90% of full pay and at a flat rate of statutory maternity pay for a further 33 weeks. It was also proposed to extend the compulsory maternity leave period to six weeks. In the UK, the compulsory maternity leave period (in which a woman who has given birth is not allowed to work) is two weeks, or four weeks for factory workers. The decision not to proceed with the Directive was taken as part of the Commission’s Regulatory Fitness and Performance programme, which aims to simplify and reduce regulatory burdens on member states. Working Time Directive Following failure to reach agreement on a review of the Working Time Directive in 2013, on 1 December 2014 the European Commission launched a new public consultation on a review of the Directive. The Commission considers that a review is necessary because fundamental changes have occurred in the world of work and the economy since 2003 when the Directive was adopted which have had an impact on many aspects of the organisation of working time. The objective of the review is to analyse what changes to the current legal framework would possibly be needed to arrive at working time rules which best meet the needs of workers, businesses, public services and consumers across the EU. The consultation runs until 15 March 2015. Boardroom diversity Plans at EU level for a Directive aimed at improving the gender balance among non-executive directors of listed companies have not progressed much in 2014. Key elements of the proposed directive are:

A target of 40% of non-executive director positions to be held by the under-represented sex by 1 January 2020;

Companies with a gender imbalance amongst non-executive directors (i.e. 40% or less representation by one sex) will have to select for vacancies applying clear, gender-neutral and unambiguous criteria. Where candidates are equally qualified, priority should be given to the under-represented gender;

Annual reporting on the gender composition of the board, for both executives and non-executives.



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The Directive is currently awaiting approval by the Council of Ministers. The Presidency of the Council of the EU published a note of suggested changes to the proposed directive in October 2014. Posted workers The Posted Workers’ Directive provides that workers who are posted by their employers to work temporarily in other member states should be covered by the same basic employment protections available to other workers employed in the host country. As a result of suggestions that minimum employment and working conditions were frequently not respected for posted workers, the European Commission proposed a further Directive to increase monitoring and compliance with rules in the Posted Workers Directive. The Posted Workers Enforcement Directive was adopted on 13 May 2014. The Directive aims to:

Aid implementation of the Posted Workers Directive and improve co-operation and co-ordination between member states' authorities.

Establish a core set of clearly defined employment conditions which posting undertakings must ensure.

Promote a climate of fair competition between all service providers, service recipients, and workers posted for the provision of services.

Once the Directive has been published in the Official Journal, Members States will have two years and 20 days to implement it.



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C. BUSINESS IMMIGRATION In this section we summarise the key changes over the last 12 months together with some case law to provide you with a synopsis of the legal and practical changes in this area and how these might affect your business. CASES

Minimum income requirement for partner visas

On 9th July 2012 controversial changes were made to the Immigration Rules which created a

requirement that a British citizen or settled person who wishes to apply for their non EEA spouse or

partner to enter the UK must show that they meet a ‘Minimum Income Requirement’ of £18,600

gross income per year (with additional sums for each child entering the UK).

A High Court challenge to this Rule was successful in July 2013 in MM and others v Secretary of State

for the Home Department, on the basis that the threshold was too high and that in many cases it was

likely to be a disproportionate interference with the British citizen's or settled person's rights to a

private and family life under Article 8 of the European Convention of Human Rights. The Home

Office appealed to the CA which overturned the High Court’s decision in 2014. It found that the

minimum income requirement did not interfere with the parties’ human rights. The relevant test

was whether the Secretary of State had a ‘rational belief’ that the policy embodied in the

requirements will achieve the identified aim of safeguarding the economic wellbeing of the UK.

As a result of this judgment the Home Office announced that the 4,000 cases on hold pending this

decision, as they met all the requirements apart from the minimum income threshold, will be

rejected. The CA’s decision came as a huge disappointment to many families but does leave open

the possibility of individual challenges succeeding on the basis that the interference (the effect of

the financial threshold being imposed) may not be proportionate in every case. It will be interesting

to see the extent to which some cases can take advantage of this.

We think this particular judgment is likely to be appealed to the Supreme Court. We will keep you

updated on any developments.

Genuineness test for entrepreneurs and submitting new evidence on appeal

In Ahmed and Another (PBS: admissible evidence) the applicants had submitted a Tier 1

Entrepreneur application. The Secretary of State interviewed the individuals and later rejected their

application on the basis she was not satisfied that the individuals were genuine entrepreneurs. The

individuals appealed to the First – tier Tribunal and provided a number of documents which enabled

the Judge to take the view that the business proposal was genuine and viable.

However the Secretary of State applied for and obtained permission to appeal. The Upper Tribunal

held that section 85A of the Nationality, Immigration and Asylum Act 2002 prevented a judge from

considering evidence that was not submitted with the original application to the Home Office as the

“genuiness test” relates to the award of points under the Points Based system.



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No absolute need to provide contracts when applying as an entrepreneur

The case of Shebl (Entrepreneur: proof of contracts) was a useful development for applicants. The

individual submitted an application to remain in the UK under the Tier 1 (Entrepreneur) category,

without submitting contracts between his company and the purchaser of his company’s goods. The

Home Office rejected his application on the premise he had not submitted satisfactory evidence of

contracts and therefore did not meet paragraph 41 – SD(c) (now 41-SD (e) (iv) (1) (a)-(c)). The

appeal was granted but the Secretary of State appealed the decision.

The individual in his initial application had submitted a combination of purchase orders and

sales/commission invoices to support the “contract requirement” between his company and the

purchaser. The Upper Tribunal held a series of documents that together show all material required

by the Rules can constitute a contract.

Entering the UK using EU Law

In order to avoid the stringent requirements of the spouse visa, including the income threshold,

some UK nationals sought to rely on EU Law as an alternative. They did this by purposefully

travelling to another EU country with their non EU spouse, seeking employment in the EU country

and working there for several weeks. Thereafter they would return to the UK with their non EU

spouse using EU free movement and family rights and the principle of the right of return to the

home member state.

In January 2014, the government made changes to this route (which became known as the Surinder

Singh route), and inserted a clause in the Immigration (European Economic Area) (Amendment) (No.

2) Regulations 2013 (SI No 3032) stipulating that a British Citizen who is seeking to return to the UK

with his/her spouse must not only have been economically active in another EU country whilst

residing there with their spouse, but also that: “the centre of P’s [the British citizen’s] life has

transferred to the EEA state where P resides as a worker or a self employed person.” This change

sought to largely close the EU loophole.

However because of the case of O v The Netherlands the government now has cause to rethink its

recent changes to the law regarding “moving the centre of your life”. In this case the Grand

Chamber of the ECJ held that all that is required to confirm genuine residence in exercising treaty

rights is that the British citizen has been lawfully and genuinely resident in another EU State for

three months during which time family life must have been “created or strengthened” and during

which time they exercised any treaty rights under any of the five established ways. That is exercising

treaty rights as a student, worker, self-sufficient, self employed or job seeker – not just being a

worker or self-employed - the government’s amendment to the Regulations.

Despite this decision suggesting that the government’s “centre of life” requirement is a breach of EU

Law the rules are yet to be changed to reflect this. No doubt we will hear more on this politically

sensitive subject in 2015.



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OTHER DEVELOPMENTS

Immigration Rule changes

6 April 2014 Rule changes

A number of changes to the Immigration Rules came into force on 6 April 2014.

Tier 2

Tier 2 applicants are now allowed to be granted up to 5 years leave at a time (an increase from 3

years) upon payment of a higher fee. This eliminates the need to submit an extension application

after the grant of initial leave (usually 3 years) and creates more flexibility for migrants who need to

stay on a long term basis in the UK.

Updates were made to minimum salary thresholds, appropriate salary rates for occupations and

maintenance funds thresholds. Similar changes were made in other categories as well as Tier 2. The

updates are in line with changes in the average weekly earnings for resident workers. The increase

in maintenance funds affected all applications made from 1 July 2014.

Applications for a Tier 2 (General) licence may now be refused if the Home Office does not believe

the applicant can offer genuine employment which meets the Tier 2 (General) requirements.

B-rated licences for sponsor applications under Tier 2 can no longer be granted. Applicants must be

able to achieve an A-rating, otherwise the application will be refused. (The policy on downgrading

an A-rated licence to a B-rating remains unchanged.)

The Home Office widened the definition of “working for the same employer”. Tier 2 migrants are

now protected in the event that their employment TUPE-transfers to a new company which did not

originally sponsor them. In that scenario, we understand the Home Office will treat them as if the

identity of their employer has not changed, to enable these migrants to continue working.

Tier 1

The Tier 1 (Exceptional Talent) category was expanded to allow applications from those in the digital

technology sector who are endorsed as a leading talent by Tech City UK, a new Designated

Competent Body.

It was also made easier for applicants in the Tier 1 (Exceptional Talent) category to apply from

overseas and to make time spent in other immigration categories count towards qualifying for

settlement.

Amongst other minor changes, updates were made to the evidential requirements for Tier 1

(Entrepreneur) applications including removing the need for third party declarations to be provided

to reflect current banking practice, and requiring alternative documentation to evidence the

requirement such as producing business accounts as evidence of investment.

The limited places for MBA graduates under the Tier 1 (Graduate Entrepreneur) category were

removed, allowing places for graduates of any subject from UK institutions and removing the

requirement on participants that they must have obtained their degree within the last 12 months or



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from a particular institution. This is of particular benefit to overseas applicants and those in the UK

undertaking research since graduating.

Tier 5

A new 24 month category was created for overseas government sponsored language teachers under

the Tier 5 Government Authorised Exchange (GAE) route. This enables government sponsored

teachers to share knowledge and awareness of foreign languages and cultures in the UK.

Similarly to Tier 2, in respect of the definition of “working for the same employer”, Tier 5 migrants

are now protected in the event that their employment TUPE-transfers to a new company which did

not originally sponsor them. In that scenario, we understand the Home Office will treat them as if

the identity of their employer has not changed, to enable these migrants to continue working.

Other changes

Other changes included:

Introducing a clearer policy on criminal convictions.

Amending Part 9 of the Immigration Rules relating to the General Grounds for Refusal by

incorporating powers to cancel leave in the Curtailment Rules; enabling leave to be curtailed

where a Points-Based system sponsor notifies the Home Office that a migrant’s period of

study/work is due to end earlier than had been originally planned when leave to enter or

remain was granted; and making minor changes to clarify the wording and intention of the

Rules.

6 November 2014 Rule changes

Further Immigration Rule changes came into force on 6 November 2014. The following is a summary

of the main changes:

New administrative review process

An administrative review process was introduced for correcting casework errors for persons refused

Leave to Remain. Administrative review is available where there is no right of appeal, and the aim is

to complete each review within 28 days. New evidence will be prohibited from being considered,

although there are some exceptions. Initially, the review process only applies to Tier 4 migrants

seeking Leave to Remain under the Points Based System, and their partners and children. The

review will be by a different person from the original decision maker.

Correcting errors

Applicants who submit an in time but invalid application are more easily able to correct errors or

omissions which would render their application invalid, without running out of time. This means a

lot more cases are likely to be approved in the first instance, once the errors are remedied, instead

of being immediately rejected.



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Greater flexibility for Tier 1 (Exceptional Talent) category

More flexibility has been provided for applicants in the Tier 1 (Exceptional Talent) category (i.e. for

those who lead the world or show exceptional promise in the fields of sciences, humanities,

engineering and the arts) including 5-year grants of leave and removal of the English language

requirement for extension applications. Also, the criteria and list of notable industry awards have

been expanded for applicants in the film, television, animation, post-production and visual effects

industry.

Changes to Tier 1 (Investor) category

Changes have been made to the Tier 1 (Investor) category (i.e. for high net worth individuals making

a substantial investment to the UK) to improve its benefits to the UK. In particular, the £1 million

minimum investment threshold has increased to £2 million, it can no longer be sourced from a loan,

and all of it must now be invested in prescribed forms of investments. A consultation document will

be published in due course on the type of investments the route should encourage. A welcome

change is that the migrant’s investment will no longer need to be ‘topped up’ if its market value falls.

There is also a new subjective element where even though all the criteria are met, an application can

be refused if there are reasonable grounds to believe:

The applicant is not in control of the investment funds;

The funds were obtained unlawfully; or

The character, conduct or associations of the party providing the funds means approving the

application is not conducive to the public good.

Transitional arrangements were put in place for Tier 1 (Investor) migrants who had already entered

this route pre 6 November 2014. They are not subject to these changes and can rely on the £1

million investment level when they apply for extensions or Indefinite Leave to Remain.

Changes for Tier 1 (Entrepreneur) applicants

Tier 1 (Entrepreneur) applicants who are applying from within the UK with the purpose of setting up,

taking over or running a business are now prevented from relying on funds which are outside the UK

to assist in verifying the funds are genuine. Applicants for Indefinite Leave to Remain (ILR) will be

required to show that they have invested their funds in the UK. Those applying under the

accelerated route for ILR must also show they have invested their funds from 6 November 2014. A

number of technical clarifications have also been made to evidential requirements relating to

funding held in joint accounts, multiple accounts or another business; where an applicant has

already established a business; to the job creation requirements for ILR, and to the definitions of

Venture Capital firms, “new business” and “property development or property management”.

Tier 2 (Intra-Company Transfer) and Tier 2 (General) applications

Tier 2 of the Points Based System caters for migrant workers with an offer of a skilled job from an

employer that holds a Sponsor Licence. For Tier 2 (Intra-Company Transfer) and Tier 2 (General)

applications, there will now be an assessment of whether a genuine vacancy exists. This means

applications can be refused where there are reasonable grounds to believe the job described by the



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Sponsor does not genuinely exist; has been exaggerated to meet the Tier 2 threshold; or in respect

of the Tier 2 (General) category has been tailored to exclude resident workers from being recruited;

or where there are reasonable grounds to believe that the applicant is not qualified to do the job. It

has also been confirmed that migrants cannot be sponsored to fill a position for a third party who is

not the sponsor. This change is an extension of the ‘genuineness’ principle that has been introduced

to many areas. The introduction of genuineness is unhelpful in our view and is particularly

controversial as it introduces a subjective element to what was previously a ‘points-based’ objective

system. A number of clients have already experienced challenges from UK Visas and Immigration in

relation to their vacancies/roles and been forced to provide detailed submissions regarding

genuineness. We consider that this may herald a more aggressive approach from UKVI towards

certain employers and industry sectors.

Another noteworthy change is that Tier 2 (General) applicants extending their leave during the 28

day period after their leave has expired are now exempt from the Resident Labour Market Test if

they are continuing to work in the same role for the same employer. Previously the exemption only

applied if the applicant still had current leave as a Tier 2 (General) migrant when they were making

their extension application. This is a helpful change.

Tier 5 Youth Mobility Scheme (YMS)

For the Tier 5 Youth Mobility Scheme (YMS), the annual allocation of places for participating

countries for 2015 has been set; two work experience schemes have been added to the list of

Government Authorised Exchange schemes; and four Mandarin Teacher’s schemes have been

removed.

Business visitors

The Business Visitor route enables individuals to carry out a wide range of permitted activities in the

UK provided they remain paid and employed overseas. The Rule changes have made this route

more flexible to allow:

scientists and researchers to collaborate on an international project that is being led from

the UK;

overseas lawyers, who are employees of international law firms which have offices in the

UK, to advise UK clients on litigation or international transactions provided they remain paid

and employed overseas; and

graduates of an overseas nursing school to take an Objective Structured Clinical Examination

in the UK.

Private Medical visitors

Private Medical visitors are now able to apply for entry clearance for up to 11 months at the outset

where their treatment is likely to be longer than six months. The rules are also made clearer that

such visitors may extend their leave for a period of up to six months when on-going treatment in the

UK is needed.



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Overseas Domestic Worker in a Private Household

The Overseas Domestic Worker in a Private Household Rules have been clarified to prevent repeat

visits that amount to de facto residence. The intention behind this is apparently to avoid

exploitation of workers and to harmonise the requirements with those applying as general visitors.

Knowledge of Language and Life requirement

Changes to the Knowledge of Language and Life (KOLL) requirement for Indefinite Leave to Remain

applications now make it clear that an applicant may be required to attend an interview and/ or

retake the relevant examinations or tests to prove that the KOLL requirement is met.

Other changes

Other changes include:

Visitors coming to the UK to marry or to form a civil partnership face stricter rules in order to

prevent this route being used for sham marriages or sham civil partnerships in the UK;

The Rules relating to family and private life are amended and clarified. In particular, this

allows applicants more scope for meeting the minimum income threshold requirement; and

All transit passengers entering the UK are required to hold a valid exemption document

under the “transit without visa” scheme.

Unannounced Home Office HR systems audits

The Home Office has changed its policy on how it approaches visits to Sponsor Licence holders to

audit their HR Systems. Most visits by Home Office officials are now unannounced and the Sponsor

is not told of the audit in advance.

All Sponsors must operate appropriate HR Systems to comply with their obligations as a Sponsor and

to ensure that they are monitoring and recording their migrant workers' activities appropriately.

Announcing visits in advance gave the Sponsor time to ensure that its HR Systems and worker

records were up to date and enabled it to address problems and avoid penalties. The change in

policy means that this opportunity is no longer available. Sponsors must therefore ensure they

maintain a consistently high standard in the operation of their HR Systems in case the Home Office

makes a visit. Failure to do so could compromise the Sponsor’s licence or result in penalties.

Bulgaria and Romania have full access to UK domestic labour market

Since 1 January 2014, nationals from Romania and Bulgaria have had the same access to the labour

market as any other European Economic Area (EEA) national (except for nationals from Croatia who

still require worker authorisation unless exempt).

This means that those from Romania and Bulgaria can stay in the UK for more than 3 months if they

are exercising their free movement rights to live in the UK either as a worker, student, self employed

or self sufficient person. Those not working or seeking work must be able to support themselves

and their families and must have comprehensive private medical insurance.



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Tuberculosis testing in China, Hong Kong and Macau

From 31 December 2013, migrants from China, Hong Kong and Macau, who wish to come to the UK

for more than six months, have had to undertake a tuberculosis test and produce appropriate

evidence of that test at the time of applying for their visa.

This is an extension of the existing obligation on individuals from China, Hong Kong and Macau to

have such a test if applying to settle in the UK.

A full list of the countries subject to TB testing is set out at Appendix T of the Immigration Rules.

New Home Office fees and expedited services

On 6 April 2014 fee changes (mostly increases) came into force for visas, immigration and nationality

applications and wider premium services.

There was a significant increase in fees, with a 4% increase for the majority of fees. These changes

included:

Removal of the 25% discount given to dependants when applying with a main applicant in

the UK;

Increasing nationality registration fees to 90% of the naturalisation fee. Minors receive a

10% reduction from the adult fee when applying for registration;

Applying a staggered rise to long-term visit visas to enable the 10-year visit visa fee to be

frozen. This means that the 2 year visit visa is rising by a higher percentage than the 5 year

visit visa;

Increasing the fee to make an application in person at Premium Service Centres from £375

to £400 and the priority postal fee available for Tier 2 applicants from £275 to £300; and

Introduction of the Registered Traveller scheme which allows expedited border clearance to

regular visitors from a number of countries. The service is available to non-EEA visitors from

specific countries with an e-passport, who visit the UK at least 4 times a year. A yearly fee of

£50 will be rolled out following a successful pilot.

Outside of the UK, the Home Office introduced a number of premium services which were previously

only available in a limited number of countries and introduced a global fee for services that were

previously charged at local rates:

A fee of £100 for a 3-5 day priority visa service was introduced. A similar service for

settlement applications is also available, with a fee of £300;

A fee of £600 was introduced for a super priority visa service which will usually provide a visa

decision within 24 hours;

New user visa application centres were opened, where applicants can submit applications

and enrol biometrics at additional, convenient locations. The fee for this service is £59;

Appointments have been made available outside of office hours to offer more flexibility to

customers. These appointments are charged at £50;

The passport pass-back service was rolled out to more locations, ensuring that applicants

have the ability to hold on to their passport for most of the application process, and rather


https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/299684/Final_Appendix_T_MASTER.pdf


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significantly, enabling them to travel while their application is considered. This service is

charged at £40 per applicant.

The Home Office has also made a number of fee reductions and changes as follows:

The fee for the direct airside transit visa was reduced from £54 to £40;

Sponsorship fees for Tier 2 large sponsor licences and sponsor action plans were reduced to

reflect reduced processing costs, while a number of other sponsorship fees were frozen;

The Tier 2 shortage occupations fee was reduced from £514 to £428 for overseas applicants

and from £601 to £428 for in-country applicants to encourage skilled applicants to fill

vacancies where appropriate;

New Tier 2 general/ICT rules were introduced allowing applicants to apply for leave for up to

5 years rather than the previous 3 years; and

The reduction offered to nationals of countries that have ratified the 1961 European Social

Charter was changed. The discount changed from a 10% reduction to each main applicant

fee to a simple flat rate discount of £55.

Maximum Civil Penalty Fine Increase

The Immigration (Employment of Adults Subject to Immigration Control) (Maximum Penalty)

(Amendment) Order 2014 increased the maximum civil penalty for illegally employing an adult

subject to immigration control from £10,000 to £20,000.

The maximum civil penalty fine may be imposed by the Secretary of State under section 15(2) of the

Immigration, Asylum and Nationality Act 2006 on an employer who acts contrary to that section in

the employment of an adult subject to immigration control who does not have the right to work in

the UK.

New Code of Practice on Preventing Illegal Working

A new Code of Practice on Preventing Illegal Working came into force on 16 May 2014.

The Home Office has reduced the list of acceptable documents in List A and List B and the document

must be current (i.e. not expired). Employers can only accept original documents and the person

being checked must be present (in person or via a live video link). Before employment commences,

the employer must make clear copies of the employee’s original documents that cannot be altered

(such as a pdf or jpeg) and must retain the copy securely, either electronically or in hard copy. A

record should be kept of the date on which the check was made either on the document itself or as

part of a separate record (which is also held securely). Employers must keep documents securely for

the duration of the migrant’s employment and for two years thereafter (an increase from one year).

It is no longer necessary to check List B migrants every 12 months. List B is now divided into two

groups. For Group 1, a follow up check must be done shortly before the employee’s permission

expires. If the application is outstanding at the expiry date of the employee’s current leave to

remain there is a 28 day grace period from the expiry date to receive a Positive Verification Notice



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(“PVN”) from the Employer Checking Service. The statutory excuse is then valid for six months from

the date specified in the PVN and it will be necessary to make a further check upon its expiry.

For Group 2, if the employee holds one of the acceptable listed documents or where the employee

has an outstanding application at the date of the check, the employer must obtain a PVN. The

statutory excuse is then valid for six months from the date specified in the PVN and it will be

necessary to make a further check upon its expiry.

A Negative Verification Notice Result means that the statutory excuse will be terminated and UK

Visas and Immigration advise that the employer can no longer employ the person. However, please

note that this is a complex area and legal advice should be sought on the individual circumstances

involved before terminating an employee’s employment due to right to work or illegality reasons.

For students with a restricted right to work, it is necessary to obtain and copy evidence from the

education sponsor giving term and vacation times covering the duration of their study in the UK.

This can be a printout from the education institution’s website (provided the employer has checked

that the website is genuine), a copy letter addressed to the student from the institution or a letter to

the employer from the institution.

The time period for carrying out Right to Work checks following a TUPE transfer has increased to 60

days (previously 28 days).

At the same time a new two tier civil penalty fining system was introduced with larger fines for

businesses which have been caught employing illegal workers in the previous three years.

New Code of Practice – Avoiding Race Discrimination When Carrying Out Immigration Checks

Along with the new illegal working legislation changes, the Home Office published a new Code of

Practice providing guidance for employers on how to avoid race discrimination when carrying out

pre-employment immigration checks.

The Code recommends that employers have clear written procedures for the recruitment and

selection of all workers, based on equal and fair treatment for all applicants. It also recommends

that:

no assumptions should be made about a person’s right to work or immigration status on the

basis of their colour, nationality, ethnic or national origins, accent or length of time they

have been resident in the UK;

the best way for employers to ensure they do not discriminate is to treat all applicants fairly

and in the same way at each stage of the recruitment process. Employers should therefore

ensure that they carry out statutory immigration checks for all prospective workers and not

just those who, for example, are from an ethic minority or have a foreign accent;

job applicants who produce acceptable documents showing a time limited right to work in

the UK should not be treated less favourably during their employment, except that further

Right to Work checks may be carried out as prescribed in the Code of Practice and guidance;

questions should only be asked about an applicant’s or worker’s immigration status where it

is necessary to determine whether their status imposes limitations on the number of hours



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they may work each week, the type of work they may carry out or on the length of time for

which they are permitted to work;

if a person is unable to produce acceptable documents, the employer should not assume

that they are living or working in the UK illegally. Employers should try to keep the job open

for as long as possible in order to provide them with the opportunity to demonstrate their

Right to Work, although they are not obliged to do so if they need to recruit someone

urgently; and

employers should as a matter of good practice monitor the diversity details of applications

during the recruitment and selection process as this will help them know whether they are

reaching a wide range of potential job applicants and the information can be used in

reviewing recruitment procedures.

The new Code replaced the 2008 version and came into force on 16 May 2014. It is supported by

separate guidance and the Code of Practice on the civil penalty scheme for employers. The Code has

statutory force and may be taken into account by tribunals considering discrimination claims.

UKVI online application service

A new online application service for customers applying to enter or remain in the UK was launched

in February 2014 for in-country applications from Tier 2 Priority Service customers applying to

extend their leave to remain. It was extended to dependant joiners applying separately in May

2014. From June 2014 customers in China have been able to use the Service as an alternative to the

Visa4UK website to apply for a general, business or child Visit visa.

The Service was then extended to Tier 2 customers applying via the Standard 8-week Route. It is

now possible to apply for, or switch to, Tier 2 Leave to Remain online using the new service rather

than a paper form. The online service is available to the following Tier 2 customers:

Single applicants, dependant joiners and family groups;

Priority Service customers (most applicants receive a decision within 10 working days)

Standard route customers (most applicants receive a decision within 8 weeks); and

Customers in the Premium Sponsor scheme.

The service was released in phases:

From Monday 6th October Priority Service customers already able to use the new service

were also able to use the service to switch to Tier 2 or to switch Tier 2 employers;

Later in October customers in the Premium Sponsor scheme and Tier 2 Standard (8-week)

Route customers were able to use the service; and

From December Tier 2 customers applying as a family group were able to use the Service.

The online service is being offered in parallel with existing application routes, such as the paper

application form. However, customers are being encouraged to use the new online service where

possible.



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The online service is expected to make the in country Tier 2 application process simpler and more

user-friendly, and includes:

Fewer, more intuitive questions logically ordered based on customer feedback;

Payment integrated into the online application process;

A single online application form for family groups;

The ability to save and return to complete the application at a later date; and

The date of application is the date submitted online.

The online service is also expected to improve service levels due to:

System validation, meaning customer errors and omissions are less likely;

Electronic (instant) delivery of the application form to UKVI instead of postal delivery; and

A shorter, more logically ordered application form.

The service will continue to be rolled out and in the near future (timescales yet to be confirmed) will

be available to Tier 5 dependant joiners applying separately. It will also become available to

Premium Service customers, where most applicants receive a decision on the same day.

New UK-Ireland Visa Deal Signed

The British and Irish governments have introduced a scheme that allows visitors to the UK and the

Republic of Ireland to use the same short-stay visa. It will also allow the UK and Ireland to share data

and exchange information to help determine immigration decisions.

The scheme began with visitors from China and India, allowing them to move freely between the

two areas on a single permit.

The agreement was signed on 6 October 2014 at the Irish Embassy in London by Home Secretary

Theresa May and Irish Justice Minister Frances Fitzgerald. The scheme started in China at the end of

October and in India soon afterwards.

The scheme is a welcome step towards a more “open doors” policy for allowing visitors from outside

the EU to move freely between the UK and Ireland.

Fines for landlords

From 1st December 2014 private landlords who own property in the West Midlands (Birmingham,

Wolverhampton, Dudley, Walsall and/or Sandwell) must check whether a prospective tenant is

present in the UK lawfully, in accordance with the Immigration Act 2014. This is part of a phased

introduction across the country.

If a private landlord rents accommodation to a tenant who does not have the legal right to reside in

the UK, the landlord could be fined up to £3,000. However, landlords will be able to establish a

statutory excuse against this civil penalty if they have conducted specific document checks prior to

allowing the tenant to occupy the rented accommodation.



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Tenants will fall into three broad categories, which will be dependent on their UK immigration

status. The majority of people will have:

An unlimited right to rent - landlords will therefore not be liable for a civil penalty if they

rent accommodation for occupation by someone with an unlimited right to rent in the UK.

Examples of someone with an unlimited right to rent would be tenants who are British

citizens, EEA and Swiss nationals; and tenants who have the Right of Abode in the UK or who

have obtained Indefinite Leave to Remain in the UK;

A time limited right to rent - landlords will not be liable for a civil penalty if they rent

accommodation for occupation by someone with a time limited right to rent, but to

maintain an excuse against a penalty, a landlord will need to conduct follow up checks. In

the event they do not conduct follow up checks they will be liable to a civil penalty.

Examples of tenants with a time limited right to rent would be sponsored workers or those

in the UK under one of the partner routes etc.

No right to rent - landlords will normally be liable for a civil penalty if they authorise

occupation of accommodation by a person who does not have the right to rent in the UK.

For example, tenants who have overstayed their visas.

The Secretary of State also has the ability to grant an individual a right to rent in the UK on a

discretionary basis. In these cases a landlord will not be liable for a civil penalty, if they authorise

accommodation for use as an only or main home by an adult who has been granted a discretionary

right to rent.

Regardless of which category a prospective tenant falls under, the landlord will need to keep

evidence of the checks they have undertaken when letting their property. If a landlord appoints an

agent to act on their behalf in this matter and the agent accepts responsibility for compliance, then

they will be liable in the place of the landlord.



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D. HEALTH AND SAFETY

Decrease in fatalities There were improvements in the number of fatalities in 2014, with 133 workers killed at work, a rate of 0.44 fatalities per 100,000 workers. In 2013 this was higher with 148 workers killed at work, a rate of 0.5 fatalities per 100,000 workers. Campaigns and initiatives Campaigns and initiatives were carried out by the HSE to increase health and safety awareness. These included: Beware Asbestos campaign The Beware Asbestos campaign was launched on 9 October 2014 and will run until March 2015. Its aim is to encourage safe working practices among those workers most at risk from asbestos, i.e. trades people working on small sites and projects in the construction and maintenance industries. HSE inspectors’ visits The ninth annual initiative of unannounced HSE inspectors visits to sites where refurbishment projects or repair works projects are taking place began on the 22 September and continued until 17 October 2014. More visits are planned by the HSE inspectors for 2015 in order to continue to increase awareness of health and safety on sites. Legislation and Approved Code of Practice and Guidance Further changes were made to legislation and Approved Codes of Practice and guidance giving more improved guidance and practical advice to help duty holders comply with their legal duties. These changes included:

the Explosives Regulations 2014 which came into force on 1 October 2014;

the Safe use of lifting equipment second edition L113 Approved Code of Practice and guidance setting out what is required to ensure compliance with the Lifting Operations and Lifting Equipment Regulations 1998 (LOLER);

the Safe work in confined spaces third edition L101 Approved Code of Practice which sets out what is required to ensure compliance when working in a confined space;

the Acetylene Safety (England and Wales and Scotland) Regulations 2014;

the Petroleum (Consolidation) Regulations 2014 which came into force on 1 October 2014;

the Genetically Modified Organisms (Contained Use) Regulations 2014 which came into force on 1 October 2014. This fifth edition of L29 provides practical advice to duty holders in relation to working with GMOs in contained facilities; and

new guidance on working at height.

The lows of 2014 There were more tragic deaths of employees and the self-employed and other workers including agency workers resulting in health and safety prosecutions. These included:



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Global engineering specialist Costain Limited which was ordered to pay more than £615,000 in fines and costs after a worker was killed when a vehicle overturned during construction work. The HSE found the safety of the vehicle was compromised by limited space and other obstructions in the area where he was required to work. Costain was prosecuted for failing to provide a safe system of work and was fined a total of £525,000 and ordered to pay a further £90,577 in costs;

A healthcare firm was fined £170,000 for serious safety failings following the death of a worker who fell nearly six metres from scaffolding. An investigation by the HSE found the scaffolding was dangerous due to a lack of guard rails and inadequate decking. In addition, site employees were not trained in safety, there were no risk assessments and there were no method statements. The company was also ordered to pay a further £82,145 in prosecution costs;

A property development firm was ordered to pay a total of over £180,000 for safety failings after a worker was killed whilst driving a dumper truck during construction works. The HSE investigation found that despite operations being underway for some three weeks at the site, there were no measures in place to prevent people or vehicles falling into an excavation. The firm was fined £150,000 and ordered to pay £28,033 in costs after being found guilty of health and safety breaches.

Corporate manslaughter

2014 saw the sixth corporate manslaughter conviction. A cleaning company was found guilty of

corporate manslaughter following the death of a worker in 2012. The man died when he was

crushed by a road sweeper, whilst carrying out repairs to the machine. A joint police and HSE

investigation was carried out following the incident highlighting extensive failings on the part of the

company.

The company pleaded guilty to a charge under section 1 of the Corporate Manslaughter and

Corporate Homicide Act 2007 and the company director admitted failing to discharge duties under

the Health and Safety at Work Act 1974.

The company director was fined £183,000 and the company was fined £8,000 and ordered to pay

£4,000 costs.

What is expected in 2015

Improving occupational ill-health In the HSE construction division Plan of Work 2014/2015 the clear message is that continuous improvement is the main focus for 2015, building on previous work in 2014. Included in the main areas of change for 2014/15 will be preventing occupational ill health, including respiratory risks, hand-arm vibration and occupational cancers. Legislative changes There will be more changes to existing legislation to ensure legislation remains suitable to the modern Britain. The independent review of health and safety legislation undertaken by Professor



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Ragnar E Löfstedt titled Reclaiming health and safety for all was a catalyst for legislative changes in 2013/4 and this will be continued into 2015. Expected changes include:

proposals to revise the Construction (Design and Management) Regulations 2007 (CDM 2007);

the Control of Major Accident Hazards (COMAH) Regulations 2015 which will come into force in Great Britain on 1 June 2015;

the Chemicals (Hazard Information and Packaging for Supply) Regulations (CHIP) Regulations will be revoked from 1 June 2015 and replaced by the European CLP Regulation which has direct effect; and

an exemption from health and safety legislation for people who are self-employed and whose work poses no risk of harm to others. The exemption is contained in the Deregulation Bill which is currently making its way through parliament.

Increased fines The Sentencing Council announced that there will be a review of sentencing guidelines for health and safety offences, corporate manslaughter and food safety and hygiene offences guidelines. A Consultation is open until 18th February 2015.



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CONCLUSION

In 2014 employers had to grapple with the difficult issue of how they should calculate statutory

holiday pay. In 2015, the biggest change will undoubtedly be the introduction of shared parental

leave and associated family friendly changes. Employers who have not already done so need to

prepare a shared parental leave policy and update their parental leave, adoption and paternity

policies to reflect the changes.

Employers will also be interested in the ECJ’s decision on the scope of collective redundancy

obligations which is expected in 2015.

Other changes in 2015 will depend on the progress of the Small Business, Enterprise and

Employment Bill which is currently making its way through parliament and will need to receive Royal

Assent before Parliament goes into recess in March, in preparation for the general election in May.

After that, of course, the face of employment law will depend on which party is in power. Each of

the three main parties has published details of planned changes should they win the election. The

Conservatives plan to change strike laws, end the use of exclusive zero hours contracts and pass a

new British Bill of Rights to replace the Human Rights Act. Labour’s plans include increasing the

national minimum wage and improving its enforcement, requiring companies to publish details of

the average pay of their male and female workers, increasing free childcare and requiring breakfast

and after school clubs to be provided, a right for workers working regular hours on zero hours

contracts to a regular contract and reform of the employment tribunal system. The Liberal

Democrats would likewise increase the national minimum wage and require larger employers to

publish the average pay of their male and female workers. They would also create a new Workers’

Rights Agency to streamline and improve the enforcement of workers’ rights and they would grant

fathers an additional four weeks’ paternity leave.

Immigration has become one of the most important political battlegrounds during 2014, making

daily headlines in broadsheets and tabloids alike. The political parties are now preparing their

immigration policies for their manifestos leading up to May’s General Election. What is clear is that

the debate has shifted to the political right, perhaps influenced by the success of UKIP, with each

major party keen to be seen to be tough and controlling on migrants. This will certainly lead to

further changes to the Immigration Rules governing non-EU nationals. The points based system of

immigration will therefore continue to evolve in 2015 and will continue to contain pitfalls for the

unwary. However, with the right strategy and advice solutions for businesses wishing to employ key

migrant workers will still be readily available.

2015 will be a busy year for health and safety with continual improvement in all areas. There will be

a focus on decreasing occupational ill health, further changes to legislation and likely changes to

sentencing guidelines resulting in higher fines for health and safety offences. Doyle Clayton will

keep you updated throughout the year on the latest health and safety news. We can also help you

implement a health and safety management system, act as your competent person for the purposes

of the Management of Health and Safety at Work Regulations, as well as undertake a compliance

review of your business and assist with the development of major incident plans.

January 2015



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Disclaimer: These materials are of a general nature and are not a substitute for professional

advice. No responsibility can be accepted for the consequences of any action taken or refrained

from as a result of what is said.


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ANNUAL EMPLOYMENT LAW, BUSINESS IMMIGRATION AND … · 2017-07-07 · However much of the Immigration Act 2014 is of little interest to UK business. The key changes that affect employers