Employment Essentials: July's Top 5

Gowling WLG's employment, labour & equalities experts bring you the latest top five employment law developments that may affect your business - what they are, and what you can do about them.

• At number 1: The scope of 'off the record' negotiations
• At number 2: Why employers should have an e-cigarette policy
• At number 3: Update on Apprenticeship Levy plans
• At number 4: This way to the #Brexit?
• At number 5: Will Brexit stall gender pay gap reporting?

At number 1: The scope of 'off the record' negotiations

Since July 2013, employers and employees have been able to enter into 'off the record' discussions and negotiations about parting ways on the basis of mutually agreed terms, without fear that negotiations will later be used against them in an unfair dismissal claim.

Three years on, we have the first Employment Appeal Tribunal (EAT) guidance on the scope of pre-termination negotiation confidentiality under section 111A of the Employment Rights Act 1996 (ERA).

In short, unlike the long standing common law 'without prejudice' privilege rules, section 111A privilege inadmissibility extends to the fact that negotiations have taken place at all, not just the content of those negotiations, and it cannot be waived by the parties.

Unfortunately, the EAT declined to decide whether section 111A could apply to negotiations initiated by an employee where an employer failed to make any offer, or the extent to which an employer's conduct could amount to 'improper conduct' rendering the discussions admissible. These questions instead have been sent back to the tribunal to determine.

So what does this mean for employers managing what may be delicate employee exits? In Managing exits: the scope of 'off the record' negotiations, we explain and contrast the potential protection for employers under the common law 'without prejudice' privilege rules and statutory protection under section 111A ERA.

Common law 'without prejudice' privilege or Section 111A privilege

At number 2: Why employers should have an e-cigarette policy

There are now 2.8 million e-cigarette users in the UK and there is a need for appropriate policies in public places and workplaces.

On 6 July, Public Health England (PHE) published a new framework advice for businesses and employers to help them create their own policies on the use of e-cigarettes.

The framework acknowledges that workplace environments vary greatly and there is no one-size-fits-all approach; a factory or warehouse is a very different setting to a nursery school, with different considerations to take into account. It sets out 5 principles to help guide the creation of a vaping policy:

1. Make clear the distinction between vaping and smoking.
2. Ensure policies are informed by the evidence on health risks to bystanders.
3. Identify and manage risks of uptake by children and young people.
4. Support smokers to stop smoking and stay smoke free.
5. Support compliance with smoke-free law and policies.

What should employers be doing now?

Employers should ensure no smoking policies are updated to take account of E-cigarettes. When updating policies care needs to be taken.

For example, employers who do not operate a full workplace smoking ban should not send E-cigarette smokers to designated smoking areas. E-cigarette users, as 'non-smokers'/those wishing to quit smoking, could potentially bring grievances, or even constructive dismissal claims, based on the employer's failure to provide them with a smoke-free environment. A separate area should be designated.

On the other hand, employers who do impose a wholesale ban may face complaints from employees who have been prescribed them for 'medicinal purposes'. Employers should be prepared to explain the reasoning behind the ban and offer support inside or outside the workplace for alternative methods for giving up smoking.

On current evidence, the PHE considers the health risks to bystanders to be 'extremely low', although people with asthma and other respiratory conditions can be sensitive to a range of environmental irritants including vaping. The PHE framework acknowledges that reasons other than health risks to bystanders may exist for prohibiting e-cigarette use, such as professional etiquette and commercial considerations. In particular, it is not recommended that adults who work in child and youth settings vape in view of children.

Consider the following actions:

• If not already in place, introduce a new policy to deal with the use of e-cigarettes and other such electronic devices. Avoid using smoking terminology when referring to e-cigarettes, e.g. use 'vaping' not 'smoking'.
• Be clear on your policy before taking disciplinary action against employees for use of e-cigarettes.
• Ensure staff, agency workers and contractors are aware of the policy.
• Consider the possibility of introducing a 'vaping' area that is separate from any existing areas designated for conventional smoking.
• Raise awareness of support offered inside or outside the workplace for alternative methods for giving up smoking.

The importance of having a policy - a cautionary tale

Last year, an employment tribunal case highlighted the potential importance of having a clearly thought out e-cigarette policy. The case concerned a school catering assistant who claimed that she had been constructively dismissed as a result of facing disciplinary action due to having used an e-cigarette while on break in full view of pupils.

The tribunal dismissed her claim for constructive dismissal on the basis that the employer had acted properly when asking the catering assistant to attend a disciplinary hearing. Although the employer successfully defended the case, the tribunal stressed that, because the employee had resigned and not been dismissed, it could not decide the question of whether or not her use of the e-cigarette amounted to gross misconduct, justifying dismissal. It was not clear on the evidence before the tribunal whether using e-cigarettes was a breach of the school's policy. If the disciplinary hearing had actually taken place resulting in a dismissal, the question of policy breach would have been considered and, if there was no clear policy prohibiting the use of e-cigarettes at school, the employer may well have faced difficulties defending the claim.

At number 3: Update on Apprenticeship Levy plans

We reported in ' The cost of training: Apprenticeship Levy Looms' that the Government had promised to provide further details in June about how apprenticeship training would be funded after the introduction of the Apprenticeship Levy in April 2017. No further details have been published since the Government guidance was last updated in April. In the wake of the EU referendum result and the associated economic uncertainty and potential drop in business confidence, it would not be surprising if the Government were to postpone introducing a new financial obligation on employers.

However, Skills Minister, Nick Boles, has reportedly confirmed that whilst the publication of details has been delayed, the Apprenticeship Levy will be introduced as planned and the Government remains committed to investing in apprenticeship training. Although this is in contrast to reports prior to the referendum, which suggested he thought funding for apprenticeships would be at risk if the UK voted to leave the EU, for the time being it seems Brexit has not caused the Government to change their approach.

The details we expect to be published soon include:

• Provisional funding bands, which will set the maximum amount of funding available for each apprenticeship from April 2017;
• The provisional level of government support that will be available towards the cost of apprenticeship training for non-Levy paying employers;
• The provisional level of extra payment that will be available for employers hiring 16 - 18 year old apprentices;
• The provisional amount that will be available for English and Maths training for apprentices who need it;
• Eligibility rules setting out who employers can spend apprenticeship funding on; and
• More information on who can provide apprenticeship training and how employers can set up their organisations to provide apprenticeship training.

At number 4: This way to the #Brexit?

The dust is still settling following the EU referendum outcome, but what should UK employers expect next and what can they do to tackle Brexit-related disputes between staff?

Who's who, what's what and where's it all going?

One month on from the referendum vote and it's been a busy month in the world of politics. Whilst much has been settled - we have a new government in place, led by Prime Minister Theresa May - much also remains outstanding, not least of which is the question of when and how we might exit the European Union. With David Davis installed as Secretary of State for Brexit and Liam Fox  as Secretary of State for International Trade, the structure of the negotiations is at least taking shape.

We also know that Greg Clark is the newly-installed and newly-named 'Secretary of State for Business, Energy and Industrial Strategy' taking over from Sajid Javid and that Damian Hinds is the new Minister for Employment.

The Department of Business Innovation and Skills ('BIS') has been disbanded and replaced by the Department of Business, Energy and Industrial Strategy ('BEIS'?).

If anything else is clear at this stage, it is only that there is a long road ahead before we know what Britain's new relationship with the EU will look like. No doubt, before then, we can also expect plenty more in the way of resignations, legal challenges and political spats. Of course, this means continued uncertainty for employers. On our Brexit Untangled page, we previously identified six key areas of employment regulation which could be subject to amendment including working time, TUPE and discrimination laws.

At the moment, employers remain best advised to continue on the basis that nothing has changed for the purposes of employment law. Nothing specific has been identified as a candidate for reform yet (outside the Government's already announced initiatives - see Apprenticeship Levy and gender pay gap reporting above) and the UK still remains bound by EU law and European Court decisions.

However, there have been some potential clues emerging. For example, David Davis, has made it plain that, from his perspective, cutting EU 'red-tape' does not mean cutting back on employment regulation, which he does not see as a barrier to economic growth.

This view may not be shared by one of Ms May's policy advisors, George Freeman, who has previously advocated regional variations to public sector pay and the minimum wage and exempting 'new businesses' from all employment law obligations for three years (possibly restricted to companies with fewer than three employees or a £500,000 turnover). However, Mr Freedman's suggestions date back to 2013, so it is not clear whether there is any current appetite for those ideas.

For her part, Theresa May has not said anything specific in public, save for suggesting she has plans for rules requiring businesses to have 'consumers' and 'workers' represented on their boards and making shareholders' votes on Executive pay binding rather than just advisory. In her speech before she entered Number 10, she also talked about how she wants the Conservative party to be driven by the interests of ordinary workers and not the interests of 'the privileged few.'

How this translates into policy remains to be seen. Watch this space!

Keeping the peace - how to handle the Brexit fall-out in the workplace

Meanwhile, as the politicians start to set out their cases, employers are busy trying to manage the impact of the vote on their staff. In particular, there have been various reports that strong feelings on both sides of the debate have led to an increase in workplace incidents between staff. There have been reports of a troubling rise in potentially racially motivated incidents, including EU-migrant colleagues being targeted and being told to 'go home' in the wake of the vote outcome.

What should employers do if they are faced with any incidents of this nature? Well, whilst the context may be new, workplace disputes are not. Employers should stick to the normal fair process principles. Racially motivated attacks can, of course, constitute discrimination, harassment and/or victimisation. In most cases, a sensitive and thorough investigation is likely to be required. Harassment of a colleague may amount to misconduct or even gross misconduct and so it may be necessary to carry out a disciplinary hearing to determine which sanctions (if any) should be applied.

The process should also be robust and transparent. Any failure to address these matters, or a mishandling of any issues raised, could lead to potential employment Tribunal claims and potentially even personal injury claims, if it escalates to violence. Whilst this underlies the need for employers to make sure these incidents are nipped in the bud, this needs to be balanced against potential knee-jerk reactions or sanctions which could be criticised by the Tribunal as too severe. For example, dismissal may be appropriate in the more serious cases or it may be that a written warning will be sufficient in others. Whilst the intentions of the perpetrator are not relevant for determining whether harassment has actually occurred (instead, the focus is on the perception of the person making the complaint), employers should still consider whether the employee has owned up to their actions, any mitigating circumstances and whether they have offered an apology in the usual way.

As we highlighted in last month's alert,  employers may also want to consider taking proactive steps (such as a public statement or email) to emphasise equality and respect at work policies and offering support to any employees who may feel concerned about their current immigration status.

At number 5: Will Brexit stall gender pay gap reporting?

In 'Mind the Gap: A guide to gender pay gap reporting for employers' we reported on the draft Equality Act 2010 (Gender Pay Gap Information) Regulations 2016, which will require private employers with 250 or more employees to publish gender pay gap information by the end of April 2018 and annually thereafter.

Regulations are scheduled to come into force from 1 October 2016, with the first reports needing to be published by the end of April 2018 based on pay data as at 30 April 2017. While the 'pay' information will relate to a 'snapshot' as at 30 April 2017, the specific requirement for disclosing 'bonus pay' information (which includes commission) will cover the 12 month period from 1 May 2016 to 30 April 2017.

Will Brexit stall the introduction of the new reporting obligations? We still await the final version of the Regulations promised for 'summer 2016'. While certainty is on short supply at present, it is widely understood that the Regulations are still expected to come into force in line with the original timetable (see below).  What is expected to slip is publication of the final version of the Regulations, which is not now expected until the end of September. Anticipated amendments to the current draft include tweaks to the definition of bonus pay and clarification of 'quartile bands'.

Gender Pay Gap Reporting Timeline

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.