This bulletin includes important updates in the laws and regulations that might affect your business and includes recommendations to help you stay compliant.
Read on to ensure your business is operating safely within the law
- Uber loses driver court case: what it means for you
- Employee sacked for face covering refusal loses tribunal case
- COVID-19: furlough changes; interim laws extended; more financial help
- New minimum pay rates from April
Uber loses driver court case: what it means for dental teams
The Supreme Court has ruled that Uber drivers have 'worker' employment status, rather than being self-employed. It is a case that has important wider consequences,
particularly if your business uses any self-employed staff – in short, if there's any dispute about their status, your contracts may carry less weight than before.
Employment status and rights
Employment law recognises 3 categories of working individuals:
Employees: those providing services under an employment contract for a wage/salary, who must do the work themselves and work when required while under their employer's control and supervision.
Self-employed contractors: those who manage and control their own business, providing expertise to clients.
Workers: those employed by a business under a contract to personally provide work or services, but who do not necessarily have to accept work when offered it (meaning they are not employees). However, the business is not their client or customer (meaning they are not self-employed).
Employees have the most legal protection, including the right not to be unfairly dismissed, to receive statutory redundancy pay, to various forms of paid family leave, plus all the rights given to workers and self-employed contractors.
Workers have less protection, but still have some significant rights, such as receiving the National Living/Minimum Wage, rest breaks, paid annual leave, plus all the rights given to the self-employed.
Self-employed contractors have the least protection, which is mainly limited to health and safety and anti-discrimination.
What did the Supreme Court do and why?
Previously, courts looked at the contract between the parties and assessed if it reflected the day-to-day reality of how the individual worked.
However, the Supreme Court said that the contract is not the starting point. It said that the purpose of employment legislation is to protect vulnerable workers from unfair treatment.
Because of that, it should first look at the reality of the situation.
In the recent Uber case, it agreed that
- The drivers were workers because they were both subordinate to and dependent on Uber:
- Uber dictated the contractual terms to the drivers, who had no say in them.
- Uber controlled many aspects of the working relationship: they set the charges; controlled what the driver could do and see (e.g., they were not given passenger destinations until they accepted the trip); restricted communication between passengers and drivers; prevented drivers from sharing contact details; and didn't allow drivers to offer a distinctive service. As a result, drivers had little chance to earn more through professional or entrepreneurial skill – working longer hours was the only option.
- Uber monitored drivers by checking their rate of acceptance and cancellations, warning them if these fell below a certain level. It also penalised them if customers complained or if they hadn't followed the route set by the App, and used customer driver ratings to manage their performance.
Though drivers owned their own car and had to insure it, Uber vetted the choice of car.
Although the court did not rule out considering contractual terms, it said they should not be heavily relied on, particularly if they do not fit with what's actually happening.
What does this mean for you?
A key point that affects all businesses is the downgrading of contractual terms from a starting point, to just a factor for courts to consider. Now, cleverly worded contracts that look to avoid adverse decisions about an individual's employment status will be ignored if the reality is something different.
It is now even more important to ensure that staff contracts match the reality of how staff work, particularly for self-employed contractors.
Avoid anything that puts too much control on self-employed staff, or forces them to be overly dependent on you. If you cannot, then think about whether they are more suited to an employment contract instead.
Employee sacked for face-covering refusal loses tribunal case
An Employment Tribunal has backed an employer who dismissed an employee for refusing to wear a face-covering while working on-site at a customer's premises.
The case
The case involved a delivery driver who was tasked with making deliveries to one of his employer's key customers. That customer had its own health and safety policy that required face coverings to be always worn on site. The driver refused and was consequently banned by the customer, who informed the employer.
As a result of this incident, the employer investigated and held disciplinary hearing, finding that the employee was guilty of misconduct. They then dismissed him without notice.
What the tribunal found
At the subsequent tribunal, 2 rules in the employer's Employee handbook were particularly relevant. All employees were expected to:
- be courteous and pleasant to customers; and
- take all reasonable steps to ensure both their own health and safety and that of people they encounter, and – specifically – to comply with any customer instructions regarding their own on-site requirements for the use of personal protective equipment.
The tribunal found that the driver had:
despite being made aware that it was a site health and safety rule, repeatedly refused the customer's requests to wear the face covering (stating he wasn't required to do so by law);
during the investigation, continued to insist that he had done nothing wrong; and
due to his conduct, been permanently banned from accessing the main delivery site for which he was employed.
Importantly, the employer followed a fair procedure by:
- conducting a reasonable investigation.
- getting evidence from all witnesses.
- giving the driver multiple opportunities to give his side of the story after providing him with the evidence against him, and
- allowing him to have a friend present during the disciplinary hearing to help with any translation issues he might have (as he was Polish).
The tribunal also had to decide if the employer acted reasonably in dismissing (instead of giving a warning) for this single incident. They found that the facts in this case meant that the employer's response did fall well within the range of reasonable responses, due to:
The importance to the employer's business of maintaining good relationships with its customers.
the employer's loss of confidence in the employee's future conduct (given that he'd continued to insist he'd done nothing wrong); and
the site ban, which resulted purely from the employee's own conduct and made it impossible for him to fulfil his contractual role.
What this means for you
Decisions like this are always very dependent on the circumstances – you should not take it as an automatic right to sack anyone who refuses to wear a face covering, or breaches other COVID-related safety measures.
In many cases, it is unlikely that a single act of misconduct of this nature would reasonably result in dismissal – the important reason why it did here was the fact that it led to the employment no longer being feasible.
However, this case also shows the importance of having clearly documented policies and procedures. The fact that the employer had an Employee handbook and a thorough disciplinary procedure (which it followed properly) were key to its success in defending the claim.
COVID-19: furlough changes; interim laws extended; more financial help
Furlough extended.
The Coronavirus Job Retention Scheme has been extended to 30 September, and there are some changes to note:
From 1 July 2021, the government's contribution will drop to 70% (capped at £2,187.50). From 1 August 2021, it'll drop to 60% (capped at £1,875). You'll need to pay the rest to make up the 80% total, as well as the employer pension and National Insurance contributions in respect of that 80%.
For anyone added to your payroll (i.e. HMRC was notified of an RTI payment submission) between 31 October 2020 and 2 March 2021 (inclusive), you can't furlough them until 1 May. The government has not yet published guidance on how you should calculate wages for these staff, meaning it may be different from before.
Anyone added to your payroll from 3 March onwards cannot be furloughed at all, even if you are rehiring them.
Commercial property rent forfeiture ban extended.
Commercial landlords of properties in England and Wales now cannot claim forfeiture for non-payment of rent or enforce current court claims until 30 June 2021 (extended from 31 March).
Tax and NIC exemption for home-office expenses extended
Currently, if your employees buy any home-office equipment to enable home working and you reimburse them for it, they do not have to pay Income Tax and Class 1 National Insurance contributions on those amounts. This temporary measure was due to end on 5 April but has been extended to the end of the 2021-22 tax year.
More government financial support
The deadline for applying for either a Bounce Back Loan or a Coronavirus Business Interruption Loan is 31 March. However, from 6 April a new Recovery Loan Scheme will launch.
For businesses in England, new Restart Grants will launch in April. Non-essential retail businesses able to re-open in April 2021 will be eligible for up to £6,000 per premises. Businesses in the hospitality, leisure, personal care, and fitness industries forced to remain closed until a later date could get grants of up to £18,000.
Details of the Self-Employed Income Support Scheme 4th grant have been published, with the online claim window open from late April until 31 May. If you are eligible, HMRC will contact you in mid-April. A 5th grant, covering May to September, will be available from late July.
New minimum pay rates from April
The National Minimum Wage and National Living Wage rates increase on 1 April for the 2021-22 tax year:
Aged over 25 (National Living Wage): £8.91 per hour
21-24: £8.36 per hour
18-20: £6.56 per hour
16-17: £4.62 per hour
Apprentices: £4.30 per hour
Other rates will also rise:
Accommodation set-off (the amount you can deduct from the minimum wage if you provide accommodation to the worker): £8.36 per day
Statutory maternity, paternity, adoption, shared parental pay and maternity allowance: £151.97 per week
Statutory sick pay: £96.35 per week (from 6 April)