Podcast: tax and consultancy agreements
Many HR teams will have grappled over recent years with the joys of IR35, Check employment status for tax (CEST), off-payroll working, and tried to get to grips with the complexity of how consultants and contractors providing services to their clients should be taxed. This engages difficult questions of tax status, not to be confused with the separate (but related) issue of employment status. To try to disentangle this jungle of jargon, Matthew Ramsey is joined by Philip Swinburn from our employment tax team in this month’s HR podcast. Listen to their discussion.
For more employment tax news, you can also read Philip’s update.
In previous editions we have covered the Government’s proposed reform of a number of areas of the employment law landscape. The position for EU-derived legislation, TUPE, the Working Time Regulations and, most significantly, for post-termination non-compete provisions, has now moved on a stage. Tabitha Al-Mahdawie’s note of 11 May 2023 gives all the detail.
Since Tabitha’s note was published, the Government has now given further detail on its plans:
- The proposed reforms to the Working Time Regulations and TUPE will now be subject to consultation, closing on 7 July.
- The consultation paper notes that the Government does not intend to change the existing regime for (amongst other things):
- maternity and other family-friendly rights;
- fixed-term employees;
- part-time working;
- information and consultation obligations; or
- agency workers.
- The Government’s formal response to the 2020 consultation on non-competition clauses confirms that only contracts of employment for employees (and their equivalent for workers) will be caught. LLP agreements, sale and purchase agreements, shareholder agreements, carried interest schemes and long-term incentive plans should, therefore, not be affected by the proposed introduction of a three-month ceiling.
One of the hardest HR challenges to get right is how to support employees with mental health issues, while at the same time maintaining customer service and productivity, and not detrimentally affecting others in the team. Where an employee’s mental health means that they are disabled for the purposes of the Equality Act, the duty to make reasonable adjustments comes into sharp focus. Acas has produced new guidance for employers on just this topic which, while inevitably couched in general terms, may offer some assistance to HR teams, line managers and lawyers alike.
Bullying at work
The report by Adam Tolley KC into allegations of bullying against Dominic Raab MP made the headlines recently. From an employment lawyer’s perspective, the most interesting aspects were about process and definitions. Half the report is taken up with an account of the process Adam Tolley KC adopted, who he interviewed, and what guarantees of confidentiality were given and why. Lawyers often say that the courts and tribunals tend to focus heavily on procedural matters, especially in the employment relationship. This is broadly true, and perhaps serves to explain why the process is recounted in such detail. The definitional point is more central: what behaviours count as bullying? There is no formal statutory definition, but the courts have grappled with the concept on many occasions. In the public sector context, the most authoritative statement comes from the High Court in a 2021 judgment. The Court operated on the basis that bullying meant offensive, intimidating, malicious or insulting behaviour, or an abuse or misuse of power in ways that undermine, humiliate, denigrate or injure the recipient. Roughly the same formulation is adopted by Adam Tolley KC, and appears in Acas’ coverage of the issue. Investigators looking into allegations of bullying should, in our view, adopt the same definitions going forward.
Ethnicity pay gap reporting
Larger employers will now be familiar with the gender pay gap reporting regime. An increasing number of businesses are electing to publish a wider range of pay gap metrics, often driven by recruitment and retention pressures, investor requirements, or simply to demonstrate that they take these issues seriously and are seeking to address them. Ethnicity data and social mobility data are perhaps the most widely published of these non-mandatory breakdowns. One of the supposed obstacles to publication of ethnicity pay gap information is the non-standard ways in which employers have collected ethnicity data in the first place. Helpfully, the Government has produced guidance for employers, suggesting they simply adopt the categorisation used in the national census, developed by the Government Statistical Service. That seems sensible advice, and should assist in helping those employers that wish to collect and publish ethnicity pay gap data.
Dealing with data subject access requests (DSARs) from employees can require considerable time and resource from HR, legal, management and IT. We regularly advise on some of the particularly tricky points: whether third-party data can or should be redacted; whether legal privilege applies; whether a DSAR can properly be regarded as abusive or excessive, and so on. Helpfully, the ICO has just produced new guidance directed specifically at employers, in the form of FAQs with realistic examples to help business grapple with DSARs more efficiently.