In this article, we highlight some key decisions and legislation of which employers should be aware in 2022.
- Key takeaways
- In more detail
- As part of an expected Employment Bill, a new single enforcement body will be created which will have greater powers than the current enforcement bodies.
- Statutory rates of pay will increase in April 2022.
- Important decisions on discrimination and holiday pay are expected.
- Those employers with EU operations should be aware of EU directives due for implementation by Member States this year. New laws will include giving all workers a right to a written statement of their terms and conditions, minimum levels of paternity and parental leave, and a new right to five working days carers’ leave each year.
- For more information on what these developments will mean for you, please get in touch with your usual Baker McKenzie contact.
In more detail
Increases to statutory payment rates
Statutory payments will increase in April 2022 as follows:
|1 April 2022
|National minimum wage and national living wage
|for workers aged 23 or over from GBP 8.91 to GBP 9.50 per hourfor workers aged 21 to 23 from GBP 8.36 to GBP 9.18 an hourfor 18 to 20-year-olds from GBP 6.56 to GBP 6.83 per hour,for 16 to 17-year-olds from GBP 4.62 to GBP 4.81 per hour• for apprentices from GBP 4.30 to GBP 4.81 per hour
|6 April 2022
|Statutory sick pay
|from GBP 96.35 to GBP 99.35 per week
|11 April 2022
|Statutory maternity pay, paternity pay, adoption pay shared parental pay, parental bereavement pay and Maternity Allowance
|from GBP 151.97 to GBP 156.66 per week
National Insurance contributions to rise
On 6 April 2022, National Insurance contributions for employers and employees will rise by 1.25%. This increase will fund health and social care and will be replaced in April 2023 by a separate health and social care levy (at which time, National Insurance contributions will revert to current levels).
The government promised an Employment Bill when Parliamentary time allows in the Queen’s Speech in December 2019. This is promised to include, among other changes:
- A new single enforcement body to enforce breaches in relation to national minimum wage, modern slavery (including modern slavery statements), employment agencies, statutory sick pay and holiday pay for vulnerable workers. It will have new powers to tackle non-compliance, including civil penalties of up to 20,000 GBP per worker for the breaches under the Gangmasters Licensing and Employment Agency Standards regimes. For more information, see our video chat.
- Workers to receive their tips in full. The government announced in September 2021 that the new legislation, which will be supported by a code of practice on fair and transparent distribution of gratuities, will require all employers to pass on tips without any deductions.
- A new right for workers (including those on zero hours contracts and agency workers) to request a more predictable contract after 26 weeks’ continuous service. This is intended to provide more certainty about the number of hours or days they will be required to work.
- Extending redundancy protections for pregnant workers and those on maternity leave and other forms of family leave by extending the period of protection to apply from the point the employee informs the employer that the employee is pregnant to six months after the end of the family leave period (while the practical and legal differences between shared parental leave and other forms of leave may require a different approach).
- A new right to additional neonatal leave which would grant parents of babies who are born prematurely or who are admitted to hospital in their first four weeks to up to 12 weeks’ paid time off (one week of leave for each week spent in neonatal care)
- A new right to one week’s unpaid leave for unpaid carers. According to the government’s consultation published in September 2021, this will be a day one right for all workers which can be taken as a block of one week or as individual days, taken for caring purposes such as personal and practical support, financial matters, personal or medical care.
- Making the right to request flexible working arrangements a day one right (subject to consultation – see below), by removing the requirement to have 26 weeks’ service before a request can be made.
The government has also previously announced it will introduce a duty on employers to prevent sexual harassment in the workplace, and will reintroduce protections for employees who are harassed by customer and clients. However, it is not known if this will be in the Employment Bill or elsewhere.
Discrimination – conflicting rights and beliefs
Two cases in 2022 will again deal with the potential for conflict between transgender rights, on the one hand, and religious or gender critical beliefs, on the other: Mackareth v DWP, and Higgs v Farmor School. Last year, the Employment Appeal Tribunal (EAT) decided that a claimant’s belief that biological sex is immutable was protected under the Equality Act 2010 (Forstater v CGD Group). The case has now returned to the employment tribunal to decide whether the non-renewal of Ms Forstater’s consultancy contract was unlawful discrimination because of her belief. (For more information, see here.) In Mackareth, the EAT is due to decide whether the tribunal in that case was wrong to hold that the claimant doctor’s religious beliefs in unchangeable binary gender were not protected. The Forstater judgment gives an indication that the appeal is likely to go Dr Mackereth’s way on this particular issue. If that is right then, like in the Forstater case, the tribunal will need to decide whether Dr Mackereth suffered discrimination because of his beliefs. The alleged discrimination centres on the DWP ceasing to engage Dr Mackereth when he refused to use patients’ chosen pronouns.
In Higgs, the claimant was dismissed following posts on social media that the employing school considered homophobic and transphobic. The tribunal found that Ms Higgs’ religious beliefs that gender cannot be fluid were protected, but that her dismissal was not discriminatory, on the basis that it was due to the inflammatory nature of her posts as opposed to her beliefs themselves (see here). The EAT is due to hear an appeal on this issue.
The Supreme Court is due to hand down a decision on holiday pay calculation (Harper Trust v Brazel). While relevant primarily for “part-year” workers (such as someone on a term-time only contract), it demonstrates the difficulties of holiday pay calculation for non-traditional patterns of work. The employer contends that it was right to pay Ms Brazel holiday pay at the rate of 12.07% of her earnings, this being the rate applicable to full-time colleagues. In contrast, Ms Brazel argues that UK legislation means her holiday pay should be based on the 12 week period prior to the holiday, which in fact equates to a more favourable 17.5% of annual earnings. (For more information, see here). Note that the calculation reference period would now be 52 weeks, not 12, but ignoring any weeks in which no pay was received.
In the case of Smith v Pimlico Plumbers, the Court of Appeal will consider whether the EAT was right to treat differently those workers who have taken unpaid holiday and those who have been deterred from taking holiday because it is unpaid. The former category are treated as having taken their statutory holiday, despite it being unpaid. Although they then have the right to claim the holiday pay, this is subject to time limits. In contrast, those who have been deterred from taking holiday continue to accrue their paid statutory holiday entitlement, meaning they could have a substantial payment in lieu entitlement if and when their employment ends. This case will be of most interest to organisations with a risk of misclassification claims. For more info on the EAT decision, see here.
Consultation responses due
The government’s consultation on making flexible working requests a day one right closed on 1 December, and a response is expected once the submissions of the public consultation have been analysed.
The government consulted on changes to post-termination restrictions in employment contracts in early 2021. The response to that consultation, which proposed either requiring payment for any period of restriction or banning the clauses entirely, is awaited. The consultation on banning exclusivity clauses not just in zero hours contracts as at present but those contracts where the workers’ guaranteed income is less than the Lower Earnings Limit (currently 120 GBP per week) also closed in early 2021.
Ethnicity pay gap reporting
Will this be the year we see progress on mandatory ethnicity pay gap reporting? Many employers are already collecting data and analysing their ethnicity pay as part of their commitment to inclusion and diversity. The government consulted on requiring employers to publish their ethnicity pay gap in 2019 and promised a response by the end of 2020, but said in July 2021 that it was still considering its response. Despite Houses of Parliament debates in Autumn 2021 (following a petition with over 130,000 signatures), the government has yet to publish its response.
A look across the Channel: forthcoming EU directives
While the UK is no longer obliged to implement EU directives, employers with operations in the EU often wish to have globally consistent policies as far as local law permits. EU member states have until 1 August 2022 to implement two directives.
The first, the directive on transparent and predictable working conditions, will give all workers a right to a written statement of their terms and conditions of employment, information on working conditions, and grant new rights such as requiring all compulsory training to be free to the worker and to count as working time. The second is the directive on work-life balance for parents and carers. This includes ten days’ paternity leave, an individual right to four months of parental leave (from which two months are non-transferable between the parents) paid at a level set by member states, and a new right to carer’s leave so that workers with caring responsibilities to a relative can take five working days per year for that purpose. The directive also requires member states to provide a right to request flexible working arrangements for carers and parents of young children.