Hot on the heels of the US Federal Trade Commission’s (“FTC”) proposal for a complete ban on non-competes, the UK Government has announced its intention to limit post termination non-compete clauses to just three months. This comes as part of a wider announcement of proposals which the government says have been made to help boost the economy, in this case by promoting competition and productivity in the workplace.

When will this happen?

It’s unclear at the moment when this restriction will come into force. Any reform to the rules on non-complete clauses will require primary legislation, which the government’s press release states it will be done “when parliamentary time allows”, so when that will be is anyone’s guess.

What’s the impact of this change?

At first glance, this will cause alarm for many employers, particularly those in recruitment or sales where the exposure of former employees joining a competitor or setting up in competition is a real concern. However, there’s long been criticism in the courts for non-compete clauses with judges seeing them as unreasonable restraint of trade, particularly where there are non-dealing and non-solicitation clauses which can arguably offer sufficient protections to a business’ legitimate interests, without there being a total ban on competition.

What we do know is that the government have confirmed that limiting non-compete clauses will not affect restrictions during garden leave or paid notice periods (the proposal relates to post-termination only), or change the position on confidentiality clauses or non-solicitation clauses (which prevent employees from contacting previous customers, clients or suppliers in an attempt to win their business).

However, amongst other things, the government’s press release was silent on:

• non-dealing clauses (which sit somewhere between non-solicitation and non-compete clauses and are generally, therefore, easier to enforce than non-compete clauses); and
• whether the proposals will have retrospective effect (it’s likely that they will so an employee who spends 3 months of garden leave would likely not be restricted after the end of their employment, regardless of whether the restriction is longer).

What should employers do now?

Until the proposal becomes law, there’s no legal requirement to amend any existing restrictions, however employers that currently have restrictions beyond 3 months, or who are considering introducing them, should think carefully about whether these are likely to be enforceable now, and in the future.

Restrictive covenants are a complicated area and for the best chance of them being enforceable, they should be regularly reviewed. This is particularly important because the courts will only consider whether a restriction is enforceable at the time it’s entered into, not at the time the employer seeks to enforce them (by which time the employee/former employee may have a far more senior position, making the restrictions even more important).

For advice and assistance with drafting enforceable restrictive covenants, contact the Employment Team at Sherrards.

No one is in any doubt that in various sectors, there is a skills shortage affecting not just the UK but the whole world. This, together with the immigration changes introduced by the UK Government earlier this year and the inherent difficulties in bringing staff into the country because of Brexit, is making it on some occasions tricky for employers to find the staff they need.

When the employer has finally found the ideal candidate, the legal obligation to conduct basic checks on every UK-based employee to verify that they have the required permission to work in the UK must be carried out before they can start work. These must be carried out indiscriminately on all potential employees, regardless of their nationality, race, or ethnicity. Sometimes these checks result in questions about the authenticity of the documents provided.

After the hard search, whilst it may be tempting to overlook the reliability of such documents, employers need to be vigilant about the Right to Work checks as the repercussions of getting this wrong for both the business and the individual(s) carrying out the check by way of civil and criminal penalties are severe and may have lasting implications.

During the COVID-19 pandemic, rules were introduced to make the right to work checks slightly easier to carry out, these could be made via video and by using copied rather than original documents. This flexibility was removed back in October and what follows below, is a recap of the checks involved along with the potential fines for non-compliance:

What are right to work checks?

Right to work checks involve the process of UK employers verifying an individual’s eligibility to legally work within the UK, on either a full-time or temporary basis. There is also a review of the type of work to be undertaken by the proposed individual as it is important to ensure that both aspects of the checks are fully compliant with Home Office regulations.

Are right to work checks mandatory?

All employers are legally required to conduct detailed checks and to formally record their findings. In the event of any alleged breach, employers may be able to rely upon a statutory defence if they are able to demonstrate consistent and compliant measures were undertaken during the hiring of individuals, who require permission to work in the UK.

 What are the necessary steps that must be taken by employers to ensure a right to work check is compliant?

There are three steps to be undertaken to ensure that a right to work check is compliant:

Step 1 –obtain all relevant documentation

Step 2 –check all documentation is valid and compliant

Step 3 –retain copies of all submitted items and completed checks

 Is there a specific way in which right to work checks must be conducted?

 All UK employers have to conduct their employee right to work checks manually, in person or through compliant Home Office processes via the online Identity Service Provider (IDSP). All checks must be carried out on all potential applicants, regardless of race, ethnicity, or nationality.

Are there any additional services that employers can use to carry out compliant right to work checks?

There is a free, online Employer Checking Service (ECS) available to all employers allowing them to fulfil their duty to conduct right to work checks.

This service provides an almost instant immigration status check and can be used in circumstances where potential employees are unable to provide acceptable documentation at the time of the manual documentation checking; which can happen where potential employees are awaiting Home Office decisions on pending applications, reviews or appeals.

Are there any penalties for non-compliant employers?

Failure to perform right to work checks correctly can result in serious enforced ramifications, including:

• Criminal Prosecution (of up to 5 years on average)
• Civil penalty fines of up to £20,000 per breach (per illegal employee)
• Sponsor Licence suspension / revocation (or down-grading) which can have a serious effect on business plans.
• Enforced debt action
• County Court judgement
• Business closure

How can a solicitor help with right to work checks?

Right to work checks are a mandatory, legal requirement. Online or digital checks require the employer to check the relevant document or information online and retain a record of the check.

Employers are not expected to be experts on fraud detection – but there are certain expectations on employers to perform their legislative duties under the prevention of the illegal working regime and the Code of Practice for employers.

There are also previous Codes of Practice which may apply when the period of employment started during the time that the previous code was current, and where no repeat check of an existing employee’s right to work has been required.

If an employer fails to carry out its checks correctly, the business will find itself at significant risk of facing one of the above stated penalties. An employer who knowingly employs someone without the correct immigration status may be committing a criminal offence.

It is therefore always advisable for employers to seek specialist immigration advice at each stage of the employment process, particularly since the sweeping changes set out in our immigration briefing earlier this year can now be seen in the existence of a new set of visas which may not be as familiar to the employer, with different checks required for different visas.

Partner in Employment law at Sherrards Joanne Perry answers some common questions ahead of another heatwave:

Do I have to pay employees who are unable to get into work due to travel difficulties?

Take a look at your employment contracts and Employee Handbook. These might specify whether an employee is entitled to be paid if they are unable to get in due to travel problems. If they are silent, however, then the default position is that the obligation is on the employee to get into work, regardless of any difficulties caused by the weather or otherwise. If they do not attend, they are on unauthorised absence and they are arguably not entitled to be paid.

Be careful, however, if you are going to take this approach. Firstly, there is a potential that the employee can argue that failure to make payment in these circumstances is an unauthorised deduction from wages (assuming this is not covered in the employment contract). The defence to this would be that there was no entitlement to pay as no work was done, but it may be an argument you would prefer to avoid. Secondly, you should assess whether the financial benefit of withholding pay is outweighed by the impact on staff morale and productivity. This is particularly so if the weather and travel conditions are extreme and, even with the best of intentions and efforts, employees are unable to get in.

Above all, you should ensure that your approach is consistent. Ideally, tell staff in advance (in written format, e.g. memo or email) what your approach is going to be or, even better, have an “Extreme Weather Policy”.

Consider whether employees are able to work from home, whether alternative travel arrangements can be made or whether there are other ways around the issues – e.g. travelling outside of peak times to avoid the worst of the heat. Otherwise, clearly explain to employees that either: (a) any time off will be unpaid; (b) time off will be paid but that they are expected to make up the time later; or (c) they can request the time off as paid annual leave or unpaid time off for dependant’s leave (see below). Prior notification is particularly important if you have made payments in the past in such circumstances.

As an aside, be careful if you are trying to insist on employees taking annual holiday retrospectively. Employees will need to agree to this unless the contract specifically allows for you to do this.

 

I have an employee who says they cannot come in because their child’s school has closed due to the heat. What shall I do?

Employees with responsibility for a dependant are entitled to emergency time off in circumstances in which there is an unexpected disruption to childcare. Unless the school closure was announced a reasonable time in advance, such that the employee had sufficient time to arrange alternative childcare, this would probably be an emergency situation and employees are entitled to take time off and not suffer any detriment for doing so.

Strictly speaking, the time off is unpaid (unless the contract of employment says otherwise) but employers may again want to consider the impact on morale that this approach would have. Again, it is important to be consistent in your approach. You should be especially careful where other employees who are unable to make it into the office due to travel are being paid.

 

One of my employees failed to come into work today, blaming the heatwave and travel issues. I think he is using it as an excuse and could have easily come in. Where do I stand?

If you believe that an employee is falsely using the weather conditions as an excuse for absence or lateness, this can be treated as a disciplinary matter. If you consider the matter to be serious enough (e.g. if it is a persistent or blatant case), you should investigate in line with your disciplinary policy and take action as appropriate.

However, in less serious or one-off cases, you may be better placed simply having a quiet word with the employee and letting them know that any further time off will have to be taken as holiday or will be unpaid. Bear in mind that it can often be difficult to prove or disprove an employee’s ability to come into work in these circumstances.

 

Our air conditioning isn’t great. Is there a maximum temperature above which I am obliged to shut the workplace?

In short, no, there is technically no maximum temperature above which people aren’t allowed to work. In offices or similar environments, the temperature should be “reasonable”. You should have thermometers around the workplace so that you can check the temperature – although temperature itself is not the sole issue, since humidity, radiant heat sources and clothing are also factors.

The TUC has lobbied for an upper limit on workplace temperature to be introduced – suggesting that employers be forced to take steps when the temperature inside hits 24˚C. Under the TUC’s proposals, staff could be sent home and employers prosecuted if temperatures reach 30˚C (or 27˚C for those whose work is physically demanding).  However, these proposals are currently not reflective of the law.

If your working environment is getting too hot to be considered “reasonable” then you could be putting your staff’s health and safety at risk. If, having taken steps to try to control those risks, the temperature is becoming dangerous enough to endanger health (e.g. through heatstroke etc) then you would be best advised to shut the workplace.

 

The above provides a general guide to issues that might arise. However, each situation is unique and different considerations may apply in your case. We would therefore recommend that you consult a solicitor, or another suitably qualified person, about your specific circumstances.

To find out more about employers responsibilities during a heatwave, click here to speak Employment Partner Jo Perry. 

TOCA Social is the first of its kind interactive football and dining experience which combines immersive gaming and world-class food and drink.

The Sherrards Employment team was lucky enough to experience the game for themselves after a training session with Team TOCA just before the venue opened to the public.

Mark Fellows said: “TOCA Social is an amazing venue and it really was such a pleasure to be able to support the team as they start on this exciting venture – we’ve already booked to go back with several clients in Summer 2022!”