England and Wales

1. Impact of Covid-19 on the workplace

This undoubtedly remains the biggest challenge for the year ahead. In the UK, remote working is set to continue until at least the Spring when we hope that, with the roll-out of the vaccine, employers can reconsider their “return to the office” strategies. This will involve managing risks from operational, health and safety and an employee perspective, particularly where employees are at higher risk due to protected characteristics.

Nonetheless, it is unlikely that office work will ever be the same again – and hybrid arrangements are expected. Continued home working brings with it many new challenges, including how to maintain corporate culture, induct new staff, performance manage and train remotely, promote employee wellbeing, and ensure that policies are fit for purpose.

The continuing tough restrictions have hit businesses hard, particularly in the hospitality and retail sectors. The furlough scheme is currently due to end on 30 April 2021. As the scheme winds down, we are inevitably going to see more cost-cutting measures, restructurings and redundancies. In turn, we anticipate increased engagement with trade unions, litigation and a potential rise in self-employment and project-based consultancy arrangements.

See our dedicated feature on Covid-19 workforce and employment issues.

2. People issues: impact of Brexit

The new year marks the start of life after Brexit, following the end of the transition period. In practice, we expect the biggest impact to be around people issues as freedom of movement comes to an end.

Restructuring will continue to affect workforces with business transfers, employee relocations/secondments, dual-hatting arrangements and potential redundancies. Employers will also need to grapple with immigration (and tax) issues with the introduction of the new points-based system where recruiting from the EU (or elsewhere) and should consider the impact on their recruitment strategies.

In respect of the law, it seems unlikely in the short term that EU derived employment legislation will be changed as the UK government has insisted that workers’ rights in the UK will be “protected and enhanced”. However, the UK courts will no longer be bound by the decisions of the CJEU, and this gives scope for divergence. It is widely predicted that rights under TUPE (e.g. re the harmonisation of terms), the Agency Workers Regulations and the Working Time Regulations will be eventually be eroded, but we do not anticipate material changes in the near future.

Read our Insight.

3. ESG: renewed focus on social and governance issues in the workplace

The pandemic has accelerated a focus on sustainability, social and governance issues in the workplace and this looks set to continue into 2021. Organisations may challenge traditional ideas about the office ranging from its size, physical layout and cultural role and seek to redefine their corporate purpose.

We expect to see a renewed focus on:

• wider stakeholder and employee communities as part of business strategy
• meaningful employee engagement
• effective governance arrangements with a clearer definition of the responsibilities and accountability of senior management
• “fair” remuneration practices
• modern slavery statements, and
• impact of climate change considerations (i.e. into pension fund investment strategies) and sustainability metrics.

Culture will remain a hot topic, particularly in the regulated sector, with a strong emphasis on employee wellbeing and mental health. We anticipate continued momentum around diversity and inclusion initiatives, such as the #10,000 black interns programme. We may see further development on ethnicity pay reporting this year after it gained more momentum during the BLM campaign last year.

We are likely to see progress in relation to transgender equality following the recent case confirming that gender fluid/non-binary employees are protected from discrimination (Taylor v Jaguar Land Rover). At the same time, we may see more cases in which the manifestation of a belief in the workplace is balanced against protection on grounds of sexual orientation or transgender status.

See Embracing ESG.

4. Regulated people and conduct issues

For financial services firms, navigating compliance with the SMCR remains another key challenge as solo-regulated firms embed their processes particularly in relation to the certification regime and conduct rules.
Due to Covid disruption, implementation deadlines for solo-regulated firms were extended to 31 March 2021.

In light of recent FCA guidance, we anticipate evolving practices effective assessment of fitness and propriety and conduct rule training. We also expect to see questions continuing to arise where individuals have breached covid restrictions as well as ongoing conduct issues arising out of our extraordinary remote working environment. Firms will also be grappling with the process of adding relevant people to the Directory.

We expect the Regulator to continue its focus on non-financial misconduct, which it has said is equally as important as financial misconduct. In November last year, the FCA issued final notices to three individuals banning them from working in the financial services industry after being convicted of serious non-financial offences. We can also expect continued emphasis on tackling market abuse and misconduct, including bullying and harassment, and developing a “speak up” culture in the context of new working practices due to Covid.

In light of recent reports from UK whistleblowing charity, Protect, and the APPG for whistleblowing, we may see recommendations for further reform of whistleblower protection, taking into account international best practice and the EU whistleblowing directive.

Read about our Conduct Hotline and SMCR Solution, SMCR Academy and SMCR Toolkit.

5. Data protection driven employment law claims

This year, we expect to see increased strategic use of data subject access requests (DSARs) as part of grievance processes, internal investigations and employment litigation. In light of this, employers are developing processes to manage DSARs in a cost-effective and efficient way.

We will see the impact of the new guidance from the ICO, which provided welcome clarity on some of the challenges in responding to a DSAR including the concept of “proportionality”, when a request is “manifestly excessive” and when you can “stop the clock”.

In recent months, we have seen numerous cases involving staff data breaches and significant regulatory fines, such as Morrisons, H&M and Marriott International. As our workplaces become increasingly digitalised, we expect to see continued focus on data security and risk management, particularly in relation to employees handling confidential data and the risks brought about by team moves and the solicitation of employees.

We have developed a DSAR Toolkit which allows us to build bespoke solutions to solve clients’ DSAR challenges.