UK Employment Law Coffee Break: Autumn Statement, stress and disability discrimination and age
Published on 23rd Nov 2023
Welcome to our latest Coffee Break in which we look at the latest legal and practical developments impacting UK employers.
Autumn Statement: What did it say for employers?
In his Autumn Statement yesterday, the chancellor acknowledged that "as well as backing business, you need to back the people without whose effort no businesses can succeed" and measures announced would "make work pay" and improve "the incentives to work in a modern, dynamic economy".
Statutory minimum wage rates
The government had previously announced that it would be increasing the statutory national minimum and living wages from April 2024 in line with recommendations from the Low Pay Commission. From that date, the statutory national living wage will also apply to workers aged 21 and over (at present it only applies to those aged 23 and over).
The Autumn Statement confirmed that from 1 April 2024 new statutory minimum wage rates will be as follows:
- 21 and over - £11.44 (increase of £1.02)
- 18 to 20 - £8.60 (increase of £1.11)
- 16 to 17 and apprentices - £6.40 (increase of £1.12).
The accommodation offset will increase to £9.99 per day.
Getting those who are economically inactive back to work has been a prevalent theme over the last year, with the chancellor again alluding to the fact that "post-pandemic we still have over seven million adults of working age, excluding students, who are not working despite nearly one million vacancies in the economy".
In the run up to the Autumn Statement, the government announced its "Back to Work Plan", which the chancellor confirmed in his speech focuses "on helping those with sickness or disability and the long term unemployed".
Measures announced in the statement include reforms to the Fit Note process "so that treatment rather than time off work because the default" and so that individuals whose health affects their ability to work are provided "with easy and rapid access to specialised work and health support". Further, with over 100,000 people signed onto benefits each year with no requirement to look for work because of sickness or disability, reforms will be made to the Work Capability Assessment "to reflect greater flexibility and availability of home working after the pandemic".
Over the next five years the government will spend £1.3 billion "to help nearly 700,000 people with health conditions find jobs"; over 180,000 more people will be helped through the Universal Support Programme and nearly 500,000 more people will be offered treatment for mental health conditions and employment support.
The government has also committed to providing clearer guidance and support for employers on utilising occupational health following the recent consultation; an expert group will be established to develop a new voluntary occupational framework in Great Britain. The government will also work with employers and business representatives to develop and promote best employment practices for employees with health and disability issues.
The government is also providing a further £1.3 billion of funding to offer extra help to 300,000 people who have been unemployed for over a year without having sickness or a disability; if after 18 months of intensive support these jobseekers have not found a job, they will be required to take part in mandatory work placements "to increase their skills and improve their employability". Individuals who do not engage in the process will ultimately see their benefits stopped.
National insurance contributions
The government announced that it would be reducing the main rate of Class 1 employee national insurance contributions from 12% to 10% with effect from 6 January 2024, increasing take home pay for employees.
However, this reduction must be viewed against the continue freeze on personal tax allowances and national insurance contribution thresholds. No similar reduction has been announced in respect of employers' national insurance contributions, despite the increase in the statutory minimum wage payments from next April which will affect businesses employing staff at these minimum rates.
The government has announced that it will consult on a legal right to require a new employer to pay pension contributions into an employee's existing pension, allowing individuals moving jobs to have a one "pot for life" pension.
For employers, the announcements in the Autumn Statement were largely anticipated around national minimum wage rates and the continued drive to get those who are economically inactive back to work.
The statement document states that employers can play a key role in preventing sickness leading to long-term economic inactivity and that the government "wants to collaborate with employers to help them play their part in preventing their employees from becoming inactive due to ill health".
As well as the reforms to fit notes and occupational health and other support outlined above, the government has stated that it will "work with employers and business representatives to develop and promote best employment practices for employees with health and disability issues".
Managing long-term sickness absence and re-integrating an individual back into the workforce when they are ready to do so can be expensive and time-consuming; the additional support for workers in enabling them to continue to work rather than being signed off for significant periods of time is welcome. However, employers will need to pay careful consideration to any specific practical requirements on any arrangements proposed in conjunction with a fit note and, in particular, their on-going legal obligation to make reasonable adjustments where an employee is disabled for the purposes of the Equality Act 2010.
Employers will also need to ensure that any recruitment processes are free from disability discrimination and that employees who do return to the workplace, but who may have on-going health issues, are provided with appropriate support to avert the potential for issues to arise around attendance and performance.
The chancellor also confirmed in his speech that the 30 hours of free childcare for working parents of one and two year olds, announced in the Spring Budget, will start to be rolled out in April 2024 helping "tens of thousands of parents return to work without having to worry about damaging their career prospects". However, concerns have been raised in the media about the availability of this support given the number of early years providers; employers should be alert to the difficulties some employees may face, which may see those unable to secure the hours of care they need making statutory flexible working requests.
You can read our fuller update on tax measures for businesses set out in the Autumn Statement here.
Stress and disability discrimination
An Employment Tribunal preliminary hearing has found that an employee's "work-related stress" was a disability for the purposes of the Equality Act 2010 and that there was "no requirement for there to be a formal diagnosis of a mental illness" for an Employment Tribunal to conclude that the definition of disability was met.
In this case, the employee was unable at times to leave the house, to socialise with others, and her sleep and ability to concentrate was impacted. On the facts the tribunal found that the claimant was suffering from a mental impairment "causing a substantial adverse effect on [her] ability to do day to day activities… for a prolonged period of time and for more than 12 months" and that in the tribunal's judgment "the issue of impairment must be seen in that context and even though there is no formal diagnosis here of any medical condition I am satisfied that, given the other findings I have made, I can also make a finding that that is as a result of a mental impairment". The tribunal was therefore persuaded that the claimant here had a disability for the purposes of the Equality Act 2010.
This decision is a welcome reminder for employers that they should focus on the impact of a condition on an employee when assessing whether or not there is a disability for discrimination purposes and whether there particular symptoms meet the requirements, rather than the term applied on a fit note or by the employee themselves.
We commented last week on how work-related anxiety linked to a particular aspect of an employee's role amounted to a disability – and with increasing numbers of employees absent from work with mental health conditions, it is essential that managers are trained to pick up any indications that an employee may be experiencing difficulties and are aware of what sources of support are available to employees and of the duty to consider reasonable adjustments where an employee's conditions amounts to a disability.
As recent case law is demonstrating, careful thought needs to be given to an employee's individual circumstances and the definition of disability can capture a broad range of mental health conditions. As reflected in yesterday's Autumn Statement, employers are being encouraged to actively take measures to enable employees with physical and mental health conditions to remain in work or return to work, for example, through accommodating reasonable adjustments.
Understanding an ageing workforce
Earlier this year we launched our report "Understanding an ageing workforce". With a third of all workers now aged over 50, employers must look to respond proactively to an ageing workforce and regularly review their multigenerational employment strategy. You can download our research report and industry sector highlights here.
We will be looking at this at our in-house lawyer webinar next week, along with other topical issues for employers; the webinar is on Thursday 30 November at 2pm – please click here to join us.