Welcome to October’s edition of Worked Up – there’s certainly a lot to get worked up about!

With summer seemingly well and truly behind us, the change in season has coincided with a change in government and a stark change in policy. The recent (highly controversial) mini-budget announced a host of unfunded tax cuts, including the reversal of the rise of national insurance contributions and cuts to the basic income tax rate.

Of most interest to our clients, new Chancellor Kwasi Kwarteng indicated that the 2017 and 2021 changes to the off-payroll working (IR35) reforms will be repealed with effect from April 2023. We won’t know the details of these changes for a few weeks and it’s uncertain if they will occur next year (or, frankly, at all!), given that the government has already cycled back on its proposed cut to the 45% tax rate with further u-turns also on the cards. For the time being, we advise adhering to the old adage of ‘keep calm and carry on’ until further details on these changes are made clear. At present, it’s uncertain how any future tax status assessment policy will sit within the framework of the UK’s wider tax avoidance and evasion rules, including the corporate criminal offence, which we would assume will remain priorities for any UK government.

With so many reversals, it’s difficult to see what path the government will take going forward. If the recent polls are anything to go by, a more worker-focused Labour government in the next two years is looking ever more likely with Labour’s leader, Keir Starmer, stating recently that “if they want to fight us on workers’ rights, if they want to tell us working people don’t come first, we will take them on – and we will win.” This couldn’t be in starker contrast to the latest reports from PM Liz Truss’s camp that the new government will seek to remove “reporting requirements and other regulations” in connection with workers’ rights from all businesses with less than 500 employees and potentially remove all employment rights for employees earning over a certain salary threshold. We will continue to report on these significant proposals as they develop.

In the interim, in this month’s edition of Worked Up, we explore changes to holiday pay for part-time workers, look at the potential impact of the Retained EU Law (Revocation and Reform) Bill on employment law rights, consider what the amendments to the British Nationality Act mean for immigration law, examine whether support for your favourite football team can amount to a protected belief, and give our two cents on the importance of handling investigation reports with care.

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

Casual holiday could cause confusion as court rules that part-time workers are entitled to full-time holiday

“A demolition of workplace rights”: the government’s Retained EU Law bill takes the first swing at EU-derived employment law

Fixing the mistakes of the past in British nationality law

That’s the name of the game: supporting a football club does not amount to a protected belief

A (legal) privilege denied to many (documents): why investigation reports should be handled with care

Harpur Trust v Brazel [2022] UKSC 21

The seminal judgment in this Supreme Court decision found that part-year workers (those employed for the whole year but who only work some weeks and not others) should not have their 5.6 weeks’ annual leave entitlement under the Working Time Regulations 1998 pro-rated.

The claimant in this case, Mrs Brazel, was employed on a permanent contract on a zero hours basis as a music teacher. She was only paid for the hours she taught, which varied from week to week, and she tended not to work during school holidays. She was treated as having taken her holiday in three tranches (1.87 weeks per tranche) at the end of each term. In 2011, the Harpur Trust changed how it calculated her holiday pay.

Before 2011, in accordance with section 224 Employment Rights Act 1996, the Harpur Trust worked out how much Mrs Brazel had been paid during the twelve term-time weeks before the school holiday (ignoring any weeks in which she was not paid), divided that total by twelve and paid her 1.87 times that weekly average. From September 2011, the Harpur Trust calculated Mrs Brazel’s hours worked at the end of each term, took 12.07% of that figure and paid her the hourly rate for that number of hours.

Mrs Brazel brought a claim for unlawful deduction of wages in respect of holiday pay, asserting that the 12.07% approach was incorrect. The Supreme Court upheld the decision of the Court of Appeal and accepted Mrs Brazel’s claim. It confirmed that the entitlement to 5.6 weeks’ holiday applies to full and part-year workers in full, without pro-rating. For those with no normal working hours, pay ought to be calculated by reference to the calendar week method, that is hours worked over a 52-week average, rather than limited by the number of hours worked.

In rejecting the Harpur Trust’s argument that this produces an “absurd result”, the Supreme Court did not regard “any slight favouring of workers with a highly atypical work pattern as being so absurd as to justify the wholesale revision of the statutory scheme”.

We will be releasing a more detailed briefing note looking at the impact of this judgment for our clients (particularly those in production) within the coming weeks, so watch this space!

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Retained EU Law (Revocation and Reform) Bill

The catchily-named Retained EU Law (Revocation and Reform) Bill was introduced to the House of Commons on 22 September 2022 and is set to automatically repeal secondary legislation put in place to implement EU law. This means that, in the absence of new legislation being brought in before the sunset date of 31 December 2023, we could be saying goodbye to a raft of employment rights, including the 48-hour capped working week, collective consultation, regulations in relation to agency workers, part time workers and fixed-term workers and, everyone’s favourite talking point, TUPE.

There’s quite a run-up before the Bill will kick in, plus the sunset date can be extended until 31 December 2026, but it’s certainly one to keep an eye on given quite how significant such changes would be to the employment law landscape. We will continue to keep our subscribers posted as things develop – it looks like we can expect some serious waves on the employment law horizon over the next few years.

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The British Nationality Act 1981 has recently been amended to allow the Home Office to grant British citizenship where a person failed to become a British citizen because of ‘historical legislative unfairness, an act or omission by a public authority; or other exceptional circumstances relating to the person’s case’.

‘Historical legislative unfairness’ is further defined in the published policy guidance, with a non-exhaustive list of circumstances that would hit the mark. This is explained as an Act of Parliament or subordinate legislation, which would have allowed an individual to have acquired British citizenship (or not to have lost it) if the legislation had:

• treated males and females equally;
• treated children of unmarried couples in the same way as children of married couples; or
• treated children of couples where the mother was married to someone other than the natural father in the same way as children of couples where the mother was married to the natural father.

Each of these reflects matters which have been subsequently resolved in modern nationality law under the 1981 Act and so the consideration will involve earlier acts, such as the British Nationality Act 1948. Delving a little deeper into the published policy guidance reveals that historical legislative unfairness will be intrinsically linked to unfair treatment based on a protected characteristic.

There are also interesting examples of what might constitute grounds in respect of ‘an act or omission of a public authority’; the failure of a local authority with responsibility for a child’s care to apply for registration as a British citizen before the child turns 18 and the opportunity is lost. Under ‘exceptional circumstances’ the policy reinforces that there must be a direct and evidenced causal link between the exceptional circumstances and the inability to secure British citizenship. We are not talking about exceptionality in some broader sense.

This opens up a number of possibilities, particularly about ‘double descent’ in respect of the foreign-born offspring of a UK national grandparent. This is because it allows the applicant to look back further than one generation, as is currently generally the case. It will only be applicable to situations where there was discrimination, not when a provision was felt to be unfair but affected people equally.

As an example, a child born abroad before 1983 to a British father in crown service would be regarded as British ‘otherwise than by descent’ and able to pass on citizenship to the crown servant’s grandchildren who were also born abroad. This would not have been possible if, instead, it was the British grandmother who was in crown service and the new law may serve to remedy this.

British nationality law is very complex and often involves consideration of a diverse landscape of historical provisions along with the applicant’s own personal family tree. Whilst a little esoteric, it is important to factor in these kinds of claims when providing immigration law advice since a claim on British nationality can provide an unexpected additional way forward. It can also limit the time and expense of engaging with the visa system over a period of residence in the UK.

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McClung v Doosan Babcock Ltd and others ETS/4110538/2019

In this recent preliminary hearing, a Scottish Employment Tribunal held that the claimant’s support of Glasgow Rangers Football Club did not qualify as a protected philosophical belief under s10(2) of the Equality Act 1010 (“EqA 2010”). In his claim, Mr McClung alleged that his manager, a fan of rival team Celtic, denied him work because of his allegiance to Rangers.

For the last 42 years, Mr McClung has been a die-hard fan of Rangers. He never missed a match, spent most of his disposable income on match tickets and considered watching Rangers to be a significant part of his life, as important to him as it is for religious people to attend church.

While the Tribunal did not dispute that Mr McClung’s belief in supporting Rangers was genuinely held, it found that the remaining Grainger criteria for philosophical beliefs were not met. Mr McClung’s support for Rangers was held to be closer to the support of a political party than a true philosophical belief. Further, the support of a football club did not amount to a weighty or substantial aspect of human life and was more akin to a lifestyle choice.

Mr McClung put forward that his Unionist stance and loyalty to the Queen were intrinsically linked with his status as a Rangers supporter and suggested 95% of his fellow supporters held the same views. However, in the absence of any evidence regarding the latter, and with the only common factor between supporters being that they wanted the team to perform well, the Tribunal held that the belief did not have the required levels of cogency, cohesion and importance.

Finally, while the Tribunal accepted that supporting Rangers was undoubtedly worthy of respect, it did not invoke the kind of same respect as matters such as veganism. While the claimant’s belief in supporting Rangers was genuinely held, it didn’t tick the boxes necessary to protect it under the EqA 2010. While this judgment isn’t technically binding on the employment tribunals in England and Wales, it is difficult to see how the English courts would come to a different conclusion if faced with a similar set of facts.

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In the recent case of University of Dundee v Chakraborty, the EAT reminds litigants that having a document be looked over by legal doesn’t mean that said document necessarily attracts legal privilege.

Before bringing his employment tribunal claim for harassment and race discrimination, the claimant, Mr Chakraborty, raised a grievance under his employer’s Dignity at Work Policy. The employer investigated the grievance, but the grievance investigation report was not finalised until after Mr Chakraborty brought his ET claim. Before the report was shared with the claimant, his employer’s legal counsel made a few amendments, after which the investigator made some further changes.

On the first part of the revised report, the report stated that “Note: This report was amended and reissued on 23.06.2022 following independent legal advice.” After reading this, Mr Chakraborty applied for the disclosure of the original report. His employer resisted this application as they claimed it attracted legal advice privilege. The ET rejected this submission and ordered the disclosure of the original report. His employer appealed this decision.

The EAT dismissed the appeal, holding that the original report was created not in contemplation of litigation but as part of the employer’s response to a grievance under its internal policies. The employer argued that privilege applied retrospectively as it had received legal advice during the creation of the report. The EAT rejected this interpretation and held that, at any rate, it was unclear what legal advice was given just from a comparison of the original and revised report, particularly as the investigator had made her own amendments.

What are some of the takeaways from this case? Well, if there is a real prospect that an individual may bring a claim, first and foremost be mindful of what documents are being created and carefully consider the language used in materials that might be relevant to potential proceedings. All relevant materials may end up finding themselves in front of a Tribunal judge, so it’s advisable to think twice before creating, amending and sending potentially relevant documents/emails. If you are unsure on what steps to take, we recommend seeking legal advice to help avoid planting potential legal landmines that might be inadvertently stepped on at Tribunal.

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