Employment and pensions

Employment Law Coffee Break: Covid-19 update, taxation and working overseas and steps to help retain talent and minimise loss of business

Published on 15th Jul 2021

Welcome to our latest Employment Law Coffee Break in which we look at the latest UK legal developments impacting employers.


Covid-19 update 

Following the announcement on 12 July, the prime minister, Boris Johnson, confirmed this week that Step 4 of the government's roadmap for England will go ahead on 19 July.  The government has produced a summary of the restrictions which remain in place in England here and guidance on how to stay safe and help prevent the spread of Covid-19 from 19 July. While this announcement reflects the government's latest position that now is the time for most legal restrictions to be lifted, there is a definite note of caution with Covid-19 cases on the rise. In particular: 

  • Individuals are encouraged to "limit the close contact you have with those you do not usually live with, and increase close contact gradually. This includes minimising the number, proximity and duration of social contacts". People should "meet outdoors where possible and let fresh air into homes or other enclosed spaces".
  • The government is no longer instructing people to work from home if they can, however the government "expects and recommends a gradual return over the summer".
  • While the requirement to wear face coverings in law will be lifted, the government "expects and recommends that people wear face coverings in crowded areas such as public transport". London's mayor, Sadiq Khan has stated that face coverings must be worn on London's transport network as a condition of carriage and we must now wait to see if other regions or transport operators follow suit. 

The government has confirmed in its latest announcement that from 16 August, people who have been fully vaccinated will be exempt from the requirement to self-isolate if they are a contact of a positive case. They will be instead be advised to take a PCR test as soon as possible. An individual who tests positive will still need to self-isolate regardless of vaccination status or age.

New guidance for employers 

We are expecting new guidance to be published for businesses imminently. In the meantime employers should undertake a health and safety risk assessment and continue to follow the principles set out in the working safely guidance to help mitigate risks identified including taking steps to improve air flow, cleaning surfaces regularly and ensuring staff and customers who are unwell do not attend the workplace/venue. This may also include continuing with other measures such as collecting customer details via NHS Test and Trace and requesting face masks are worn in particular areas (although subject to any concerns relating to a disability). At the time of writing, the working safely guidance has not been updated but it is expected that the links will be updated by 19 July.

NHS Covid Pass 

The government is encouraging "higher risk" settings to use the NHS Covid Pass as a condition of entry but they must do so "in compliance with all legal obligations, including on equalities". At present this is aimed at events and other settings where people are "likely to be in close proximity to others outside their household" and where other measures would not be sufficient to limit infection. 

For many employers, requiring employees or other visitors to demonstrate their Covid-19 status via the pass is unlikely to be required as continued social distancing and regular cleaning will be sufficient to control the risk. Indeed, the latest guidance makes clear that the NHS Covid Pass should not be used as a condition of entry to access essential services and essential retailers.


New guidance has been published for employers on Covid-19 vaccination to help them promote vaccination to their staff and provide support, including an employers' communication toolkit. The guidance suggests posting articles or blog posts highlighting the importance of vaccination on intranets/newsletters, using departmental champions to promote vaccination and encouraging senior staff to share their vaccination experiences and allowing workers time off to be vaccinated (ensuring that sick leave policies and procedures do not disincentivise workers from getting vaccinated). 

For many employers, requiring employees or other visitors to demonstrate their Covid-19 status via the pass is unlikely to be required as continued social distancing and regular cleaning will be sufficient to control the risk. Indeed, the latest guidance makes clear that the NHS Covid Pass should not be used as a condition of entry to access essential services and essential retailers.

Clinically extremely vulnerable 

As highlighted previously, with the move to Stage 4, employers will need to take care to listen to and consider carefully any concerns raised by staff.  In its latest announcement, the government has stated that the clinically extremely vulnerable are "advised to follow the same guidance as everyone else" but it may be appropriate for these individuals to continue to take precautions included in the government's updated guidance.

Returning to office based working and indirect discrimination 

As many employers' minds now focus on a return to some form of office based working, there are numerous considerations to be borne in mind in addition to the evident health and safety considerations of ensuring a Covid secure workplace. Many employees have been working more flexibly, and for some, childcare arrangements may have changed during the pandemic and new patterns of work/life balance been established. 

In our previous Coffee Break we looked at a recent Employment Appeal Tribunal decision which highlighted the continued relevance of a judicial notice (which enables a fact to be established without specific evidence) that women bear a greater burden of childcare than men, and that this can limit their ability to accommodate flexible working patterns, such as working certain hours (for example, nights) or changeable hours where the changes are dictated by the employer. The EAT has also recently considered whether it is indirectly discriminatory to require an employee to go to work regardless of childcare needs where the employee is not directly penalised, but rather misses out on the opportunity to work their guaranteed, minimum hours. Here, the employer's requirement for the claimant to work the hours prescribed by her employer or face losing working hours (or be placed on a zero hours contract) was found to be a "provision, criterion or practice" that resulted in unlawful indirect sex discrimination (whether or not it could be objectively justified has been remitted for another Employment Tribunal to decide).

Employers are not, of course, required to agree to any work arrangement requested and where a refusal can be objectively justified, indirect sex discrimination will not occur; however, each request must be carefully considered on its facts and where a statutory request for flexible working has been made – this may only be declined for specific, specified reasons that should be carefully documented and tested for their reasonableness.

Taxation and working overseas 

We are seeing employers increasingly dealing with requests from employees to allow working on a permanent or temporary basis from overseas locations. This week, Employment Partner Olivia Sinfield is joined in our latest podcast by Michael Carter, Partner and Head of the UK Incentives team  to address the critical questions this poses in relation to tax. What are the tax implications of your employees working overseas? How many days can employees work overseas before being hit by local tax regimes? What are the reporting requirements and risks of creating a permanent establishment? Please click here to listen.

Will there be a post-lockdown surge of employee departures? What ten steps could help retain talent and minimise loss of business? 

As employees prepare to return to the office following 16 months of isolation and uncertainty, many will seek a fresh start and new challenges by moving to join competitors or start their own businesses. The experience of previous job market recoveries all point in one direction: many businesses face a potentially large wave of new competition from recent ex-employees, but this time it is more difficult for employers to spot the red flags with many employees now working remotely. 

Claire Bowles, Associate Director, looks at ten steps for employers to help retain talent and minimise business loss and further detail on how we are helping employers is here.  

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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