Frontline: UK Employment Law Update May 2018

Welcome to the May 2018 edition of Frontline UK.

In this month's feature article, Associate Naveen Qureshi discusses the European Commission's recent proposal for a pan-European whistleblower directive and identifies some of its potential key features of which UK employers should be aware.

Our case updates address a Supreme Court decision on the dangers of omitting deemed service provisions from employment contracts, a judgment which increases disability discrimination risks to employers, an important development to constructive dismissal's 'last straw' doctrine and a reminder of the issues associated with unilateral salary cuts.

This month has also seen the ICO issue revised guidance on consent under the GDPR, the UK Government lay new Trade Secrets Regulations before Parliament and the Home Office announcing that its UK-based applications will be outsourced from October 2018. All of these topics (and more) are addressed in our legal update.

The pan-European bells and whistles: new EU whistleblower legislation proposed

Naveen Qureshi, Associate

The European Commission has proposed new whistleblower legislation to strengthen whistleblower protections across the EU. In this article, associate Naveen Qureshi provides answers to some of the questions on employers' lips regarding the suggested changes.

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Join our Annual Employment Law Update

11 July 2018, from 16:00, Bird & Bird London, 12 New Fetter Lane, EC4A 1JP

Join our London Employment Team for an afternoon Pimms and an overview of some of the key developments and trends in the employment law word, as well as their thoughts on some of the upcoming changes for the year ahead.

Register your interest here

Case Summary

Beware traps when giving notice of termination by post

Newcastle upon Tyne Hospitals NHS Foundation Trust v Haywood (Supreme Court)

The Supreme Court has held that where an employment contract is silent on the issue, notice of termination sent by post will be deemed to be received and begin running only once it has come to the attention of the relevant employee and they have either read it or had a reasonable opportunity to do so.

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Employers face increased risk of disability discrimination claims

City of York Council v B J Grosset (Court of Appeal)

The Court of Appeal has confirmed that dismissing an employee on grounds of misconduct may amount to discrimination arising from disability in circumstances even where the employer is not aware of a causal link between the relevant conduct and an underlying disability.

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Last straw revives right to terminate and claim constructive dismissal

Kaur v Leeds Teaching Hospitals NHS Trust (Court of Appeal)

The Court of Appeal has clarified the position in relation to cases of 'last straw' constructive unfair dismissal, confirming that further contributory acts by an employer revive an employee's right to resign even after they have affirmed their employer's previous breach of contract.

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EAT illustrates the dangers of unilateral salary cuts

Mostyn v S and P Casuals Ltd (Employment Appeal Tribunal)

Employers who unilaterally reduce an employee's contractual pay cannot rely on having 'reasonable and proper cause' to breach the implied term of mutual trust and confidence.

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Legal Updates

ICO publishes guidance on consent as a legal basis under the GDPR

The ICO has published its updated guidance on the GDPR’s tightened definition of consent, which is one of the potential legal bases for processing of personal data. Its key message is that, in order to be valid, consent needs to be viewed as a dynamic and managed choice; not simply a compliance exercise which is filed away, such as at the outset of the employment relationship. This will require granular opt-in mechanisms, ongoing record-keeping and simple mechanisms by which consent can be withdrawn.

To date, employers have often attempted to rely on consent to justify their HR data processing activities by including appropriate provisions in contractual and policy documentation. As expected, ICO guidance confirms that this blanket approach needs to stop; the imbalance in the employment relationship means that employee consent will not generally represent a genuine choice. Save in limited ad-hoc circumstances, where an employee will not face any adverse consequences for refusing consent, alternative legal bases for data processing will need to be identified. Contracts and privacy notices need to be updated to take this into account.

Please see here for our full update on the ICO's guidance.

Trade Secrets Regulations laid before UK Parliament

On 18 May 2018, The Trade Secrets (Enforcement, etc.) Regulations 2018 (which will come into force on 9 June 2018) were laid before the UK Parliament. The Regulations will implement the Trade Secrets Directive which was adopted by the European Council on 27 May 2016 and seeks to harmonise the protection of trade secrets across the EU with a number of measures. They will introduce, for the first time, a statutory definition of a trade secret into the UK. The protections will supplement and add to the existing law on confidentiality in the UK, which has developed through common law. The key point for UK businesses is that by taking steps to ensure valuable information meets the statutory definition of a trade secret, they have an opportunity to create value and competitive advantage. Conversely, by doing nothing, businesses may discover that key commercial data does not benefit from an appropriate level of protection.

Home Office to outsource UK-based applications from October 2018

The Home Office has announced that it will outsource its 'front end' visa processing service to Sopra Steria, a private company specialising in digital transformation, from October 2018. The services to be provided by Sopra Steria include all work and study visa, and all settlement and citizenship, applications made from within the UK.

Currently, applicants use the Home Office's online platform to complete their application form, pay the associated fees and book an appointment to enrol biometric data, before attending the appointment at either one of the Home Office's visa application centres or their local Post Office. The new arrangement intends to provide for a more streamlined service resulting in a quicker and easier process for applicants.

The key changes include:

  • The introduction of a new online platform to upload supporting documents ahead of attending the biometric appointment.
  • A dramatic increase in the number of locations (to 60+, which will include local libraries around the UK) for applicants to enrol biometric data and submit supporting documents that are required in original form (e.g. passport). All original documents will be checked, copied and returned at the appointment. Although passports will be returned, applicants should note that they will continue to be prevented from travelling outside of the UK while their application remains pending.
  • Cessation of premium service centre (PSC) appointments and the Tier 2 priority service. It is expected that Sopra Steria will offer its own range of bespoke, premium services, although both businesses and applicants wait with interest to receive further details on the service options, the turnaround times and the associated fees.

The introduction of a specialist service provider may well lead to teething issues. Will systems cope with applicants uploading a vast number of supporting documents to the platform? Will busy centres be able to keep up with demand? We wait for further details on how the change will take effect. Nevertheless, it is hoped that the positive experiences enjoyed by overseas applicants following the government's commercial partnerships on visa applications will be replicated for those applying from within the UK. 

HMRC launches summer offensive on minimum wage non-compliance

HMRC and the Department for Business, Energy and Industrial Strategy have recently launched a new campaign, encouraging workers to report any failure to pay the applicable national minimum wage using their online tool, which is available here.

Since launching its online service in January 2017, HMRC claims it has seen a 132% increase in complaints, which helped identify of £15.6 million worth of underpayments owed to around 200,000 UK workers in the period 2017-2018. Employers should recognise HMRC's focus on this area, along with the serious consequences of non-compliance; in addition to covering arrears of pay, they can be hit with fines of up to 200% of any underpayment along with potentially significant reputational issues.

Workers must receive itemised payslips from 6 April 2019

In line with the government's published commitments following the Taylor Review of Modern Working Practices, new legislation will extend the right to receive itemised payslips to all workers (rather than just employees). Such payslips must contain prescribed information, enabling all workers to identify clearly the hours they are being paid for and ascertain whether they are being correctly remunerated.

The amendment will come into force on 6 April 2019 and will not be applied retrospectively. Employers therefore have some time to update their payroll systems in order to enable them to be able to comply with the terms of the order by April next year.

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