Employment autumn 2022 update: News in brief

Neonatal leave and pay – Government backing Private Member’s Bill

In March 2020, the Government responded to a consultation on neonatal care and leave, proposing the introduction of statutory neonatal leave and pay for up to 12 weeks for parents of babies requiring neonatal care. It had been anticipated that the government would legislate to give effect to the new right in an employment bill but this was notably absent from the Queen’s Speech in May of this year.

However, on 15 July 2022, the government announced that it was taking the relatively unusual step of backing a Private Members’ Bill, the Neonatal Care (Leave and Pay) Bill, sponsored by Stuart McDonald MP. The bill had its first reading in the House of Commons on 15 June 2022, its second reading with government support on 15 July 2022 and was considered by the Public Bill Committee on 7 September 2022.

The bill will allow parents to each take up to 12 weeks of paid leave, in addition to other leave entitlements such as maternity and paternity leave, so that they can spend more time with their baby who, having been born prematurely or sick, is receiving neonatal care in a hospital or other agreed care setting. Neonatal care leave will be available to employees from their first day at work. It will apply to parents of babies who are admitted into hospital up to the age of 28 days, and who have a continuous stay in hospital of seven full days or more. Once the bill is enacted, and we do not yet have a timetable for this, employers should incorporate the new right to neonatal leave and pay into workplace policies and procedures.

Government response on employment status

The government has (finally!) published a response to the 2018 consultation on employment status, issued following recommendations made by the Taylor Review. The consultation sought views on whether changes to employment and worker status law would achieve greater clarity and certainty, and whether the tax and employment tests for status should be aligned.

The government considered 162 formal responses to the consultation from a variety of organisations, including trade bodies, trade unions, business and some individuals.

Although the vast majority of respondents agreed with the concerns about status highlighted in the review, there was little consensus on what action the government should take to address such concerns. The government has therefore decided not to implement any legislative changes but has published new guidance designed to improve clarity around employment status. The non-statutory guidance includes an explanation of the differences between employees, workers and self-employed individuals, discusses the key factors in determining employment status and provides examples based on hypothetical scenarios.

When recruiting, employers should determine at an early stage what status the new staff member will have because this will determine the rights afforded to that individual. However, it is also important to remember that, whatever status is chosen and set out in any contract, the courts and tribunals will look at the reality of the arrangement, rather than what the contract states, when determining the status of an individual.

Menopause in the workplace

The government has now published its response to the independent report, Menopause and the workplace: how to enable fulfilling working lives, which was published in November 2021.

The government confirmed that it does not intend to make any changes to the Equality Act 2010. Instead, it will work with employers and employer organisations to raise awareness and assist them in supporting workers, and encourage employers to provide support to menopausal women through employee assistance programmes and by appointing workplace menopause champions. A women’s health ambassador for England has been appointed and sits on the newly established UK Menopause Taskforce. The taskforce agreed at its inaugural meeting that work and employment would be a priority theme.

The House of Commons Women and Equalities Committee (WEC) subsequently published a report, calling on the government to immediately commence section 14 of the Equality Act 2010 (EqA 2010) which would allow dual discrimination claims, and to consult within six months on making menopause a protected characteristic, including a duty to provide reasonable adjustments for menopausal employees. However, this seems unlikely given the government’s response.

Consultation on control process for public sector payments over £95,000

HM Treasury has published a consultation on proposed new controls for public sector exit payments over £95,000 and also proposed amendments to the existing process for special severance payments. This consultation closed on 17 October 2022.

The proposals include, amongst other things:

• A new requirement for exits involving a total payment to an employee of more than £95,000 (including “relevant statutory, contractual or discretionary payments”) to be approved by a Secretary of State following submission of a business case. The guidance sets out what criteria should be considered before deciding on an exit payment and lists the types of payment that should be included when calculating an employee’s total exit payment.

• A modified version of the existing approval process for special severance payments of any amount, which will require approval from HM Treasury. The guidance provides that any payment proposed as part of a settlement agreement, which includes a special severance element, will require HM Treasury’s written authorisation before settlement is agreed.

• Approval by a Secretary of State and HM Treasury where a total exit payment exceeds £95,000 and includes a special severance element.