Employment law changes in 2020

Although we have left the European Union (EU) and entered the 11-month transition period, there remains a great deal of uncertainty for pharmacy business owners over the exact impact of Brexit on workers’ rights in 2020 and beyond. Below is a summary of changes pharmacy owners can expect in 2020.

The Queen’s speech in December 2019 included an employment bill, which is intended to “protect and enhance workers’ rights” as the UK leaves the EU. Much of what is included in the bill has already been set out in the Good Work Plan and the Conservative manifesto. The proposals include creating a new single enforcement body for workers’ rights, giving workers the right to request a more predictable contract, extending redundancy protections to prevent pregnancy and maternity discrimination, increasing leave for neo-natal care and introducing one week’s leave for unpaid carers. The government will also consult on making flexible working a default right, unless employers have good reason not to allow it.

Pre-election planned changes

The majority of changes will take place in April 2020. The key reforms comprise:

Written statement of terms: All workers, as well as employees, will be entitled to a written statement of terms. Pharmacy owners must provide these on or before the fi rst day of the engagement/employment, rather than within two months -- as currently required in relation to employees. There is also an increase in the level of information that must be included in the statement, with more information required in relation to working patterns and training requirements. These provisions will apply to joiners from April 6, 2020.

IR35 off payroll working rules: The government is planning to introduce legislation from April 2020 that will impact the payments made to consultants (or, more commonly in the case of pharmacy businesses, locums) providing services via personal service companies (PSCs) by large- and medium-sized businesses. Payments to PSCs will be treated as payments of employment income on which the pharmacy client (or third party intermediary) must account for tax and national insurance contributions in the event that the individual providing the services is determined to be employed rather than self-employed. This effectively shifts responsibility for the IR35 tax compliance from the PSC to the pharmacy client or intermediary. While there has been talk of reviewing the legislation, the implementation date may not necessarily be put back, so large and medium pharmacy business owners should continue to prepare.

Holiday pay calculation period: Since the introduction of paid holiday in 1998, there has been a string of cases challenging how holiday pay is calculated. For those working irregular working patterns, with fluctuating hours and payments, it has often been difficult to assess fairly. The consistent message from the European Court of Justice has been that pay for holiday should reflect the pay that the individual would have received if at work, otherwise, the individual may be deterred from taking holiday.

One area of dispute has been whether the current reference period for calculating holiday pay (looking back 12 weeks) reflects fairly the average pay of a worker. The courts have determined that it does not and the legislation will be changed from April 2020 to allow for a 52-week period to be taken into account instead. This is likely to give a more accurate reflection of average pay as fluctuations in work and pay throughout the year should effectively be “smoothed out”.

Parental bereavement leave: It is still anticipated that this new right will come into effect in April 2020, but the timing has not yet been confirmed. When it does come in, it will enable parents who have lost a child to take two weeks’ leave.

Cases to watch out for

As well as the key legislative changes outlined above coming in, there are some interesting cases on appeal to watch out for:

Worker status: The long-running Uber case on worker status reaches the Supreme Court in July (Uber v Aslam). Uber has lost in every court so far. In the latest decision, the Court of Appeal found that Uber drivers were “workers” and therefore entitled to the protection and benefits which that status affords. The Supreme Court has a habit of looking at things from a different perspective than the lower courts, so the outcome is far from certain.

Employee data: We are awaiting the Supreme Court decision in the case of Various Claimants v Morrisons in which Morrisons have appealed against a Court of Appeal finding that it is vicariously liable for a data leak by an employee. The breach resulted in approximately 5,000 staff members having their personal data stolen and shared with the public.

Discrimination and shared parental pay: The Supreme Court will make a final ruling in 2020 on whether it is discriminatory to pay male employees on shared parental leave less than female employees on maternity leave (Ali v Capita; Hextall v Chief Constable of Leicester).

Vicarious liability: The Supreme Court heard Barclays Bank v Various Claimants in November 2019 and the judgment is awaited. It is deciding the issue of whether the bank is vicariously liable for the sexual assault of 153 claimants while attending a medical examination required by the bank, to establish whether they were physically qualified for employment and life assurance cover. The outcome clearly has potential to be extremely costly.

The above is a general overview and we recommend that independent legal advice is sought for your specific concerns. If you require further information in relation to the points raised in this article you should contact Becky Lawton, who is a solicitor and member of the Pharmacy Transactions Team at Charles Russell Speechlys LLP, specialising in Employment. Becky can be contacted on becky.lawton@crsblaw.com.

This article also appears in the March issue of Pharmacy Business.