• September Update: Zero Hour Contracts Report; Seasonal Worker Scheme ; Changes to Strike Rules and IR35 changes on the horizon.

    With the new administration under the leadership of Ms Liz Truss changes may be afoot in employment law to deal with the ongoing pressures on workers and employers alike as we enter what is likely to be a difficult winter.

    Here we discuss a few areas which are currently in focus.

    Report on Zero Hours Contracts

    The CIPD has published Zero Hour Contracts: Evolution and Current Status a report into zero hours contracts based on a survey of employers conducted in 2021. Key points identified in the report include recommendations for creating a right to request more stable working hours and improving labour market enforcement through a single enforcement body. These are similar to the proposals contained in the pending Employment Bill. The report recommends that a Code of Practice on responsible management of zero hours workers should be created, including a right to compensation for shifts that are cancelled at the last minute, and abolition of the “worker” status to help clarify and enhance employment rights for zero hours workers more broadly. The latter has already been ruled out by the recent Government response to the 2018 consultation on employment status. The report also identified that 3% of workers are engaged on zero hours contracts, a figure lower perhaps than public perception.

    Seasonal Worker Scheme

    The UK is currently experiencing a serious labour shortage. In May this year, there were more vacancies than unemployed people in the UK for the first time since records began. Agriculture been severely affected, as have hospitality and construction.

    The new Prime Minister, Ms Truss, has confirmed that she would support a short-term expansion to the Seasonal Worker Visa. This route allows overseas workers to come to the UK to work in horticulture for up to six months (providing they satisfy certain eligibility criteria). It has recently been expanded to allow for poultry processing workers to work in the UK between 3 October and 31 December each year.

    Currently the scheme has an annual cap of 38,000 visas per year for the edible and ornamental horticulture sector, and 2,000 visas for the UK poultry processing sector. Under Ms Truss’ proposal, the scheme would be extended beyond its current expiry date in 2024 and the number of visas available would be increased.

    However, these changes will do nothing to alleviate the shortages outside the scope of the scheme.

    Changes to Rules on Striking

    Despite almost universal opposition to its proposals, the government has changed the law to allow employment businesses to supply temporary workers to cover for striking workers.

    The Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022 came into force on 21 July 2022. The effect of the Regulations is to allow employers to replace workers who are on strike or taking official industrial action with agency workers, or to replace any other worker who has been assigned to cover the striking worker. A highly contentious change resisted by several Trade Unions as enter what is likely to be a winter of discontent.

    On the same date the Liability of Trade Unions in Proceedings in Tort (Increase of Limits on Damages) Order 2022 also came into force. This quadrupled the maximum damages that can be awarded against a trade union when industrial action is found to be unlawful. The new limits are:-

    For unions with less than 5,000 members – £40,000

    For unions with 5,000 to 24,999 members – £200,000

    For unions with 25,000 to 99,999 members – £500,000

    For unions with 100,000 or more members – £1,000,000

    Unison will be challenging the Regulations in proposed judicial review proceedings.

    Ms Truss has also pledged, within 30 days of becoming prime minister, to make it more difficult for industrial action to take place, including:

    Raising ballot thresholds supporting a strike for it to be lawful from 40% to 50% of members.

    Setting minimum service levels – Whilst the government has not yet implemented its 2019 manifesto commitment to introduce minimum service levels during transport strikes, Ms Truss has pledged to bring in minimum service levels for critical national infrastructure.

    Increasing the minimum notice period for strike action from two weeks to four weeks – In theory, this would allow businesses to better prepare for strikes and make it easier to arrange for agency workers to cover for any striking workers.

    Introducing a ‘cooling off period’ after each strike – This would prevent unions from striking repeatedly in the six-month period after a ballot without having to seek a new mandate from members for each strike action (as is currently the case).

    Removing tax free payments – Union members who are striking would no longer be able to receive payments from their union tax-free which would increase the cost of striking to members.

    These proposed changes are likely to be strongly resisted by the Unions.

    Administrative controls proposed for public sector severance payments

    A new Consultation Public Sector Exit Payments: a new controls process for high exit payments has been opened by the Government seeking views on a new administrative control process for public sector exit payments over £95,000 as well as on amendments to the process for special severance payments. An expanded approvals process for employee exits and special severance payments together with additional reporting requirements in relevant parts of the public sector is being proposed.

    Review of IR35

    With the new Prime Minister, Ms Truss, comes the revived promise of a review into off-payroll working rules. Ms Truss believes IR35 results in the genuinely self-employed being taxed in the same way as employees without receiving the same benefits. True enough but given the current backlog of employment related legislation which is to be brought forward “when parliamentary time allows” it remains to be seen whether any meaningful changes will be made and if so in what timescale.

    Watch this space.

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