HomeInsightsWorked Up, your monthly employment law lowdown – June 2022

Welcome to the latest Worked Up, the June 2022 edition!

Following in the footsteps of the once-in-a-lifetime platinum jubilee celebrations, this month’s edition is a one-off special edition covering some (hopefully) thought-provoking topics on recruitment and retention. If you missed our recent webinar on all things recruitment, you can access a recording of the session here. Our upcoming webinar on how to retain employees and talent will be taking place on Thursday 9 June at 11am – please sign up here if you’re interested in attending.

While we won’t be covering our usual general employment law updates this month (though for those aggrieved, we promise to return to our regular scheduled programming in July!), we thought we should briefly mention the recent Court of Appeal decision in Atholl House Productions v HMRC which dealt with the IR35 status of BBC DJ Kaye Adams. In a nutshell, the Court of Appeal has held that factors other than the express and implied terms of the contract could be used to determine whether Ms Adams’ contract was in fact a contract of employment – in particular, the full factual matrix (including whether the putative taxpayer is in business on their own account) must be considered and such analysis must include other work done outside of the specific engagement which is being categorised. Further evidence of how IR35 remains ever topical.

In this month’s special edition, we touch on some of the barriers trans applicants face when going through the application process, examine the impact of artificial intelligence and algorithms on the selection process, explore the nomad land of digital nomad visas, consider whether the four-day week is the future of work and reflect on how to manage employee loneliness in a digital age.

If you would like to discuss any of the below updates, please do get in touch. Alternatively, if you would like to receive these updates directly to your inbox, please subscribe here.

With an estimated 1% of the UK population identifying as transgender, it’s critical that businesses ensure that they are complying with their legal obligations by preventing transphobia and discrimination against transgender applicants and employees. In a recruitment context, employers can make several tweaks to their standard application process to make the process more inclusive for trans applicants:

  • Application forms: employers should ensure that application forms approach gender expression in a way that is inclusive of trans people or people with non-binary genders. For example, a company may want to consider removing questions about the applicant’s sex or title where this information does not need to be collected, or allow for applicants to indicate their own title rather than ticking a pre-filled box.
  • Data: if certain information, such as an individual’s previous name, is required, it’s essential to request and handle this information sensitively and ensure that this information is protected from all those except who strictly need to know.
  • HR: employers should train their HR teams so that they have sufficient knowledge and awareness of transgender issues. This will ensure that any barriers to high quality transgender candidates are minimalised and that recruitment systems do not contravene legal requirements.
  • Vetting: if employers require a DBS check for security vetting, this should be disclosed to applicants at an early stage, with signposts to further information on how a DBS check works and its purpose. There is also a confidential DBS process specifically for trans applicants, details of which are contained on this UK government website.

Making these amendments to an application process and listening to – and supporting – transgender applicants and employees can make a world of difference in making trans individuals feel included and respected in the workplace. While the above is by no means a comprehensive list of all the issues that an employer should consider when thinking about trans applicants, it hopefully provides some food for thought on some potential barriers trans applicants face and how employers can help dismantle these barriers by taking a few steps in a more inclusive direction.

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HAL 9000, GLaDOS, Skynet, Ultron – all great band names and all examples of something running awry in AI. While we don’t (yet) live in a world shaped by maleficent malware, there has been an uptake in the use of artificial intelligence by employers. From sourcing candidates to assisting with the screening process, AI-powered tools are now increasingly being used in all stages of the recruitment process. Automated background checking, CV scraping (when CVs are scanned for key words and a decision is made on whether to progress the candidate to the next stage), and even talent screening (where a prospective employee’s social media feed is screened and problematic behaviour is flagged), have all increasingly been used by employers to reduce the cost and time spent weeding out the best candidates for a job role.

While automating the application process brings a plethora of benefits, these benefits don’t come without risk. Although there is a valid argument that algorithms can help reduce unconscious bias that afflicts human recruiters, companies should take care that they are not using inherently flawed and biased algorithms to sift through applications.

For example, consider training an algorithm to analyse historic recruitment data. While a good idea in theory, developers of such algorithms have found that they can learn unfortunate lessons from the prior gender split of employees. In other words, such systems can teach themselves that male candidates are preferable. This shows that significant care is required to avoid repetition of past biases and discrimination impacting future hiring decisions. Given the risks of this technology, it’s advisable to ensure that there is a degree of oversight from human managers in the recruitment process. This may include such actions as spot-checking applications or stress testing the algorithms with fake applications to ensure that great candidates aren’t being passed over due to ill-designed automatic processes.

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Many countries, particularly as they seek to recover their economies in the wake of the pandemic, now offer what are collectively known as ‘Digital Nomad’ visas. These recognise the ability of workers, with often just a laptop and a reliable internet connection, to work from anywhere worldwide. The precise terms of the visa schemes vary between countries and often require some proof of income or self-sufficiency. Countries with particularly light touch schemes include Estonia, Croatia, and Malta.

What about the UK? There isn’t currently a specific visa scheme to facilitate remote workers who want to live in the UK. The immigration rules for visitors expressly prohibit work in the UK, with a wide definition of what constitutes ‘work’. There are several permitted exceptions to this rule, but none that explicitly cover remote working. The policy guidance for visitors now has a section on remote working which states:

Visitors are permitted to undertake activities relating to their employment overseas remotely whilst they are in the UK, such as responding to emails or answering phone calls. However, you should check that the applicant’s main purpose of coming to the UK is to undertake a permitted activity, rather than specifically to work remotely from the UK. Where the applicant indicates that they intend to spend a large proportion of their time in the UK and will be doing some remote working, you should ensure that they are genuinely employed overseas and are not seeking to work in the UK. You must be satisfied that the applicant will not live in the UK for extended periods through frequent or successive visits.”

This (not particularly clearly drafted) section highlights that some remote work is possible, but it cannot be the main purpose of the visit. This recognises the impossibility of preventing someone on holiday in the UK opening their laptop to check and respond to some emails. However, in broad terms, a visitor cannot intend solely to come to the UK to work remotely and must be here doing something which falls more squarely under the list of permitted activities for visitors.

Outside of the visitors’ rules, one solution for individuals who want to base themselves in the UK is to look at a ‘Global Talent’ visa. This allows individuals working in various disciplines to seek a visa that would permit work in the UK. The scheme requires endorsement as someone with either ‘exceptional talent’ or ‘exceptional promise’. The grant of permission is quite flexible and would permit remote working. However, if permanent residence is an objective, the worker would need to be outside the UK for no more than 180 days in any 12-month period, which is perhaps not in the spirit of a digital nomad.

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The concept of a four-day working week is not a novel one. Governments across the world have been debating the idea and conducting trials to test its impact on employers and employees alike. While this may have seemed fanciful to many only a few years ago, the COVID-19 pandemic has accelerated changes in working practices and highlighted the importance of staff wellbeing and flexibility. Is it finally time we start working “smarter not harder”?

UK trial

A six-month trial looking into a four-day working week with no loss of pay will start in the UK this month. It is being run by academics from Cambridge and Oxford universities, Boston College, the 4 Day Week Campaign and think tank Autonomy. More than 3,000 workers at 60 companies will take part in a study on the impact of shorter working weeks on productivity, staff wellbeing, the environment and gender equality. Under the pilot scheme, employees will be allowed to work up to 9.5 hours per day.

Reported benefits

Iceland was one of the first countries to trial a four-day working week without any reduction in pay between 2015 to 2019. It was dubbed “an overwhelming success” and resulted in 86% of the country’s workforce moving to a shorter working week or gaining the right to request shorter hours. Researchers found that worker stress and burnout was reduced and that there was a “powerful positive effect on work-life balance”. Japan – the country which gave us the word “karoshi” meaning “death from overwork” – is also dabbling with the idea. This follows Microsoft’s trial of a four-day working week in its Japan offices which found that not only were employees happier, but productivity was boosted by a staggering 40%. Other cited advantages include employee retention, with the 4 Day Week Campaign stating that a reduced working week will allow organisations to attract and retain the highest quality talent.

Key employer considerations

Like any form of flexible working arrangement, it’s important to keep in mind the legal and cultural implications it may have on your business. Below are some of the key practical considerations for employers who are considering implementing a four-day working week:

  • Contracts: moving to a reduced working week is likely to constitute a change to most employment contracts in relation to working days and hours. Employers should therefore look to amend these accordingly and obtain the consent of employees whilst doing so.
  • Trials: most employers will likely want to implement a pilot scheme before making a four-day working week a permanent change. In this situation, employers should clearly convey that the contractual change is temporary and that the working week will revert to normal unless confirmed in writing. Failure to do so, or allowing a trial period to overrun, may inadvertently create a contractual entitlement for employees to work a four-day week.
  • Holiday: employees working a four-day week will see their statutory annual leave entitlement reduced to 22.4 days a year. Employers can of course choose to offer more than this and thought should be given to whether holiday allowances will be reduced, particularly if the same number of hours are expected of employees during their new four day working week.
  • Part-time employees: many employees already work a four-day week and will have their salary pro-rated accordingly to reflect this. On the basis that the above trials advocate no reduction in pay, these individuals may look to reduce their working week even further to three days with no change to their take-home salary (or alternatively increase pay and hours proportionately while remaining at work for four days). Employers should consider how to tackle this dilemma and what their policy should be on this.

What does the future hold?

It very much remains to be seen whether initiatives wider than employer policies will be introduced in the UK. A recent paper published in the Journal of Social Policy has suggested that state-level intervention is necessary in order to properly implement a national four-day working week. Belgium is one of the latest countries to move in this direction, with its government announcing in February 2022 that employees will have the right to request to work the same number of hours in a compressed four-day week. If companies refuse the request, which they are entitled to do, they will be required to justify the refusal in writing. The outcome of the UK trial later this year is expected to be a key turning point in determining whether our government is likely to follow suit.

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While the COVID-19 pandemic has provided many employees with improved flexibility and work life balance, the shift towards remote working is not without its flaws. A recent report by social media firm Buffer, which analysed data from 2,000 remote and hybrid workers globally, has found that 24% struggle with loneliness and that 52% feel less connected to their co-workers since working from home. As many businesses look to make remote working a permanent solution and downsize traditional office space, it’s now more important than ever to regularly check in on the mental wellbeing of employees.

Addressing feelings of loneliness is beneficial to both employers and employees alike. Research carried out by the New Economics Foundation has found that the cost of loneliness to UK employers is estimated to be £2.5 billion each year. Amongst other factors, these costs are comprised of increased staff turnover (64%), low productivity (26%) and related sickness absence (1%). In contrast, having regular and meaningful interactions in the workplace is associated with improved engagement, output and quality of work.

So, what can employers do to help combat feelings of loneliness? Creating an environment where employees feel able to talk openly about mental health is key. This needs to be embedded at an organisational level with appropriate policies in place to support this. For example, providing training to managers on how to spot the warning signs of loneliness and appointing mental health “champions” to provide additional support. Employers should also consider whether there are enough informal opportunities and social events for employees to connect in person or virtually. While research by UK jobs board Totaljobs has shown that women and younger employees (those aged 18-38) are most likely to be affected by loneliness, it can happen to anyone at any age. Simply because someone is now “out of sight” by virtue of remote working does not mean they should be “out of mind”.

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