Top Fortnightly Facts - 28 October 2022

Every fortnight, Knights’ Employment Team publish their Top Fortnightly Facts (TFFs), providing a summary of the key updates in the Employment and HR world. We start by looking at current news headlines and discussion points and finish with some quick-fire points where we touch on any other significant developments.

1.    Plans scrapped to reverse IR35

What?

It is somewhat difficult to keep abreast of the constant chopping and changing that seems to be taking place with the government’s mini-budget or otherwise these days. As most readers will be aware, the most recent previous chancellor, Kwasi Kwarteng, promised less than a month ago in his mini budget announcement to reverse the IR35 rules. For many businesses, this would have been a rejuvenation of the off-payroll system and allowed for the easier hiring of contractors with the responsibility to deal with tax shifted back to the contractor.

The new Chancellor, Jeremy Hunt, has recently announced the government’s intention to scrap plans to repeal IR35.

So what?

It is no secret that there is a deafening call for market stability following the repercussions of the government’s mini-budget last month, and it therefore seems extremely unlikely that we will see the Chancellor ‘scrap the scrapping of the plan’ in relation to IR35. The inevitability of the rules remaining is further supported by the fact that the chancellor responsible for introducing the IR35 reforms in the first place has now landed the lauded position of Prime Minister.

It seems this particular mini-budget pledge will soon become a distant memory and the current IR35 rules are here to stay for the foreseeable future.

2.    Employment Appeal Tribunal rules that future discrimination claims cannot be compromised in a settlement agreement.

What?

 This week, the Employment Appeal Tribunal’s judgment in the matter of Bathgate v Technip UK Ltd and Others [2022] EAT 155 was published.

 By way of background, Mr Bathgate (61 at the time of his redundancy) had been employed by Technip for nearly 20 years before he was made redundant from his chief officer role in January 2017. He accepted the terms of a settlement agreement which included an enhanced redundancy payment, a payment in lieu of his notice and an additional sum to be paid in June 2017.

It was thereafter decided by the company in March 2017 that the additional payment would not be paid to those employees aged 61 and over. However, this was not communicated to Mr Bathgate until the sum was due to be paid to him in June 2017.

Mr Bathgate claimed that this decision not to pay him the additional payment amounted to age discrimination. It was the company’s position that while they accept that his age was the reason for why he was not paid the additional payment, by signing the settlement agreement earlier in the year, Mr Bathgate had waived the right to pursue this claim against the company.

So what?

A pertinent point of the judgment confirmed that a settlement agreement cannot compromise a discrimination claim that has not yet been made by any employee signing a settlement agreement.

In particular, Lord Summer’s judgment states that:

“the Claimant signed away his right to sue for age discrimination before he knew whether he had a claim or not. While that may be possible at common law, the Act* restricts parties’ ability to do so. […] It would appear to me that the inclusion of a claim in a compromise agreement defined merely by reference to its legal character or its section number does not satisfy the language of s. 147”

“The inclusion of a claim in a compromise agreement defined merely by reference to its legal character or its section number does not satisfy the language of the Act*. The words ‘the particular complaint’ suggest that Parliament anticipated the existence of an actual complaint or circumstances where the grounds for a complaint existed. I do not consider that the words ‘the particular complaint’ are apt to describe a potential future complaint.”

This therefore resulted in Lord Summer summarising that “the Agreement was void in that it did not comply with s. 147 of the Equality Act 2010”.

(*Equality Act 2010)

3.    The Worker Protection Bill passes second reading state in the House of Commons

What?

The Worker Protection Bill is a private member’s bill sponsored by Liberal Democrat Wera Hobhouse, which aims to make employers liable for third-party harassment faced by workers in the hospitality, leisure and retail sectors.

So what?

The Equality Act prohibits employers from harassing their workers and confirms that employers may be vicariously liable for harassment carried out by their workers, unless they can show they took “all reasonable steps” to prevent the harassment taking place. Since the repeal of specific subsections of the Equality Act in 2013, employers are not currently liable where staff are harassed by third parties, and this is where the importance of such a bill, should it pass, be vital in plugging the gaps in the laws to offer workers in the aforementioned industries appropriate protections.

The introduction of these protections being enshrined in legislation has been long awaited. The House of Commons Women and Equalities Select Committee first raised concerns about the lack of protections from workplace harassment during an inquiry into sexual harassment in the workplace in 2018. The recommendation of this inquiry was that new legislation be passed to impose employer liability for third party harassment. This was then followed by a 2019 government consultation on sexual harassment in the workplace which sought feedback on the very issue of the introduction of employer liability for third-party harassment.

Given the current state of disorder and limited time available on the parliamentary timetable, there are concerns that there may be further delays to the bill being passed in a timely fashion.

And finally…

4.    Company served £4.4m fine following personal data breach

What?

 Outsourcing and construction firm, Interserve, has been served with a £4.4m fine after hackers gained access to the personal data up to 113,000 by way of a phishing email. Although the company had sufficient anti-virus software in place to alert the company about the malware contained on the phishing email being downloaded onto the company’s systems, Interserve failed to carefully investigate the malware.

The Information Commissioners Office found that the company employed outdated systems and protocols along with insufficient risk assessments and a lack of staff training which led to the breach.

So what?

The UK Information Commissioner has sent out a warning to organisations that complacency was the biggest cyber risk they faced: “If your business doesn’t regularly monitor for suspicious activity in its systems and fails to act on warnings, or doesn’t update software and fails to provide training to staff, you can expect a similar fine from my office”

Experts in cyber security have issued their own warning to organisations that have employees who work on a hybrid/remote basis may not have sufficient protections or proper oversight over who or what is connecting to their networks, so leave themselves vulnerable to cyber risk. Given this is the normal set up for many organisations these days, it is imperative to review the data protection systems in place to avoid a future breach.