Insights Worked up, your monthly employment law lowdown – January 2021

Welcome to the first Worked Up of 2021!

We’re only a week into the new year but are all already having to grapple with the employment (and no doubt personal!) implications of the new UK lockdown. We shared our thoughts on the key issues businesses are likely to face in the coming weeks in our update of 5 January 2021, which you can access here.

In this month’s edition, we cover the extension of the Coronavirus Job Retention Scheme, consider the ICO guidance on the use of algorithms in employment decisions, examine the consultation on non-compete restrictions and highlight a recent case which considered interim relief in discrimination claims.

If you would like to discuss any of the below updates, please do get in touch.

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This month's headlines

The Coronavirus Job Retention Scheme (or “furlough” scheme as it is commonly referred to) has now been extended until 30 April 2021. This means that by the time it’s finally put to bed (assuming there isn’t a further extension), it will have been in operation for over a year! Forget Zoom fatigue, that surely has nothing on furlough fatigue!

Although the rate of change to the furlough guidance has slowed down over the last few months, we thought it would still be helpful to summarise the key points you should be aware of if you are considering furloughing a worker:

  1. Eligibility – for a worker to be eligible to be furloughed they must generally have been employed/engaged on 30 October 2020 and there must have been a PAYE RTI submission made to HMRC for the specific worker between 20 March 2020-30 October 2020.
  1. Worker Circumstances – the updated guidance confirms that workers who are unable to work because they have caring responsibilities resulting from coronavirus (e.g. as a result of the school closures) or because they are clinically extremely vulnerable are eligible to be furloughed (provided that they meet the usual eligibility criteria).
  1. Contributions – the Government will continue to contribute 80% of a worker’s usual pay for hours not worked (up to a maximum of £2,500 per month). Employers must cover employer NICs and pension contributions.
  1. Backdating – while retrospective furloughing was permitted with effect from 1 November 2020, this only applied to agreements put in place up to and including 13 November 2020. This means that retrospective furloughing is now no longer possible under the scheme so it will be important to issue furlough agreements as soon as possible to ensure that any furlough arrangements aren’t delayed.
  1. Publication – from February 2021, HMRC will publish the name, company number and an indication of the value of the claim (within a banded range) of any employers who have made claims for grants under the scheme in respect of periods from 1 December 2020 onwards.

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While algorithms can be used as a recruitment tool to reduce human bias, they are themselves a product of human decision making. This means that, in some cases, they risk inadvertently reinforcing such bias.

The ICO has recognised that, as the number of job applications rises, businesses may be looking to use algorithms to ease the burden on their HR departments as well as to help address discriminatory hiring practices. The ICO has therefore published a blog on the points to consider when using algorithms for employment decisions.

The key message is that businesses must consider both data protection and equalities law when developing artificial intelligence systems for these purposes. Bias and discrimination are a problem in AI decision making as well as human decision making so businesses should consider whether AI is a necessary and proportionate solution before it’s used to process personal data.

If such systems are used, they must comply with the data protection principle of fairness and businesses should not rely solely on automated decision making for private sector hiring purposes as this is likely to contravene the GDPR. The ICO further advises that businesses should monitor changes in technical approaches and invest time and resources to ensure that they continue to follow best practice and that their staff remain appropriately trained.

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The Government has opened a consultation on the use of non-compete clauses in employment contracts which principally seeks views on: 1) banning non-compete clauses altogether; and 2) making non-compete clauses enforceable only when the employer provides compensation during the term of the clause. The consultation also seeks views on other types of restrictive covenants and measures such as imposing a maximum limit on the length of a non-compete restriction.

Whilst the Government’s call for evidence on non-compete clauses in 2016 revealed a common view that restrictive covenants were an important tool for employers in protecting their business interests, the Government’s current consultation has intriguingly been launched during a period when Covid-19 is causing a significant impact on the UK economy. This is apparently quite deliberate, as the Government has indicated it may consider changes in this area in order to increase competition and create new jobs. Nevertheless, an outright ban on the use of non-competes seems unlikely and it’s possible (and arguably likely) that the consultation will just wither away unnoticed like many other such past consultations.

The consultation is set to close on 26 February 2021 and can be accessed here.

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Steer v Stormshore Ltd UKEAT/0216/20

For those tuning in for juicy case details, you may want to turn away now as this appeal was focused on a pure point of law. However, please stick with us, as this is a case which is likely to be appealed again and which could result in an important change to the remedies available in discrimination claims.

The case focused on “interim relief” which is available in certain types of claim where the claimant is complaining about being dismissed. A claim for interim relief must be made within seven days of the effective date of termination and, if granted, a Tribunal will ask the employer if it’s prepared to re-instate or re-engage the claimant. If it’s not (or even if it is but the claimant reasonably refuses to be re-engaged), the Tribunal will instead make an order for the continuation of the claimant’s contract of employment which effectively means that the claimant will continue to be entitled to their pay and benefits until the final determination of the claim.

Interim relief is currently available to individuals who have automatic unfair dismissal claims pursuant to s103 of the Employment Rights Act 1996, but it isn’t available to individuals who have claims of discrimination/victimisation arising from dismissal.

In this case, the Appellant (Ms Steer) was able to establish that the difference in treatment between these types of claims was a breach of the European Convention of Human Rights and she was granted permission to appeal to the Court of Appeal, which has the power to make a declaration that a particular piece of legislation is incompatible with the European Convention of Human Rights. In the event that Ms Steer is granted such a declaration, parliament may well take legislative action to provide for interim relief in cases of discrimination/victimisation arising from dismissals. This case therefore has the potential to open the door to much swifter justice in some cases of discrimination/victimisation, which is significant given the considerable amount of time it currently takes for cases to get anywhere close to a final hearing.

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