5 HR hot topics for 2020

23rd January 2020

The political uncertainties of 2019 are largely behind us and, as we march ever closer to January 31 and Brexit, organisations are considering the potential new challenges 2020 will bring.  This is especially true in the HR arena where the quickening pace of change makes it as vital as ever for HR professionals to plan and adapt.

We consider five of the top 5 HR ‘hot topics’ for the year:

#1 – April 2020 ‘off-payroll’ IR35 changes

As businesses that engage contractors or consultants ‘off-payroll’ will be acutely aware, from April 2020 the majority of medium and large private sector business in the UK will become responsible for setting the tax status of any contract worker used (previously, it was up to the worker’s personal service company to do so). They will also take responsibility for assessing whether the contractor should be considered an employee in the eyes of HMRC.

In addition, the party that pays the contractor will be required to operate PAYE or NICs as appropriate and this liability will pass along the supply chain to the end-user where there are a series of sub-contracts.

The reforms have attracted vocal criticism from business.  It is estimated that the changes could increase contractor costs by up to 14 per cent and they will certainly undermine the flexibility that off-payroll working provides.  On 7 January 2020, the government launched a review to gather information from affected individuals and businesses, saying it aims to address any concerns and provide a ‘smooth landing’ in April.  This is an ambitious statement given that the new rules will apply to payments made on or after 6 April, which would usually cover contractor services performed in March.

Against this background, some companies (including a number of banks and GlaxoSmithKline) have opted to implement a blanket ban on hiring contractors and/or insist that contractors must agree to work under PAYE (or not at all) from April.

It is thought unlikely that the Government will delay the changes despite the concerns that have been raised and the lateness of the review.  Planning for these changes with relevant professional advisors will currently be top of many HR priority lists.

#2 – New ‘day-one’ employment rights from 6 April 2020

From 6 April 2020, all new employees and workers will have the right to receive a statement of written particulars from day-one of work. There are additional statutory particulars that must be included in the statement too. This is a significant change from the existing position where only employees (i.e. not workers) who are continuously employed for more than one month must be provided with a written statement of terms within two months of employment.

Employers will need to be set up and ready to comply with the new rules from 6 April.  Three key steps are:

• Prepare your revised statement of particulars ensuring that it includes all the new statutory requirements.
• Consider who is likely to classify as a worker because the statement must be issued to workers as well as to employees on day-one.
• Ensure that a system is in place to delineate employees and workers so that contracts of employment are only issued to employees and that a separate statement of particulars is issued to workers.

#3 – Holiday pay reference period to increase from 12 to 52 weeks

Holiday pay calculations are notoriously complicated, especially for staff with variable hours or variable rates of remuneration.  For workers with no normal working hours, the holiday pay reference period is currently 12 weeks.

From 6 April 2020, this reference period will increase from 12 weeks to 52 weeks. Average weekly pay must then be calculated on the basis of the previous 52 weeks where a worker has worked and received pay and disregarding any weeks not worked or where no pay was received.

Mistakes in calculating holiday pay can lead to expensive Tribunal claims and staff unrest so it is important to ensure that time-recording and payroll systems are set up and ready for this change from April. Also, make sure that managers and supervisors are up to speed on the change where necessary.

#4 – Sexual harassment

The last few years have seen a huge shift in attitudes and norms when it comes to sexual harassment.  Without a doubt, it is a societal and workplace issue that is going to remain firmly in the spotlight for 2020.  The Equality Act 2010 provides explicit protection against sexual harassment at work but the Government is currently considering whether more needs to be done.  It has cited the #metoo campaign as evidence that there is “still a real, worrying problem with sexual harassment”.  

Earlier in 2019, the Government launched a consultation to explore whether existing anti-harassment laws are operating effectively and also potential ways to extend and strengthen them. The consultation closed in October 2019 and the Government’s response is now awaited.  It is thought that it might well lead to some changes to the law to which HR will need to be able to respond quickly.

The key proposals include:

• Introducing a statutory duty to prevent harassment in the workplace. This would be enforced by the Equality and Human Rights Commission and would require employers to take ‘all reasonable steps’ to prevent harassment from occurring. At present, if an employer has taken ‘all reasonable steps’ to prevent harassment this is a defence to a sex discrimination claim. However, currently, there is no legal duty to do so.
• Re-introducing protection against third-party harassment (this used to be enshrined in law before being repealed in 2013). The consultation asks whether one incident of harassment should be enough to trigger liability and whether the employer must actually know about the risk in advance.
• Extending the three-month time limit for bringing discrimination and harassment claims to six months.
• Extending protection for volunteers and interns.

It is clear that the current focus on sexual harassment is not just a ‘flash in the pan’. With that in mind, now is a good time to:

• Review existing diversity and anti-harassment policies and check they are fit for purpose.
• Ask whether enough is being done in your organisation to embed a culture of equality and diversity bearing in mind that it needs to be led from the top.
• Assess whether there are any risk areas in your business and, if so, how you will address these.
• Ensure that appropriate staff awareness/induction training is happening and, importantly, that a record of all training is kept on HR files.

#5 – Data Subject Access Requests

The right of access to personal data is a fundamental right of the General Data Protection Regulation (GDPR). It gives individuals the right to find out what personal data is held about them and to obtain a copy of that data. This might include HR files, emails (internal or external) relating to the individual, medical records, expressions of opinion about the employee and so on.

We are seeing a significant increase in the number of data subject access requests (DSARs) being made by job applicants, employees and ex-employees.  They are often made in conjunction with or prior to an employment tribunal claim and can be very wide-ranging in nature.  Whilst there are some limited exemptions, the fact that a DSAR is onerous or will be time-consuming is not a valid reason for failure to comply.  The ICO can, and will, take enforcement action which can lead to fines for non-compliance. A quick look at the enforcement section of the ICO website will highlight just how hefty these fines can be.

The timescale to comply with a DSAR is one month (although this can, in certain limited circumstances, be extended to 3 months).  DSARs typically take up significant (and unbudgeted for) HR and IT time and resources.  For example, it is not unusual for a DSAR to tie up a member of HR and IT on a full-time basis whilst they collate and sift through the data held.

In view of this, it is advisable to invest time in looking at how your business would respond to a DSAR and stay on the right side of the GDPR.  Steps should include implementing a DSAR policy and process, a document retention policy and reviewing existing document management/housekeeping procedures.  Staff should be made aware that documents and emails created about a job applicant or employee are likely to class as personal data and be disclosable in the case of a DSAR.  There is a strong case for training staff in this area too.  Many employers will already have covered this as part of their overall GDPR compliance exercise but, if not, it should certainly be prioritised for 2020.

If you would like to discuss any of these topics in more detail please contact David Smedley or Andrew Rayment.