Labor law coffee break | Silent resignation, living wage and change in the right to work

Welcome to our final coffee break where we review the latest legal and practical developments for employers

Should you be worried about a “silent shutdown”?

Recently, there has been a lot of talk about “quiet resignation” – it has succeeded “the big resignation” as the buzzword for employers and employees; But what is it? and should you be concerned about it in your workplace?

In many ways, the Quiet Quit is part of the same movement as the Big Quit – both are consequences of employees reassessing their work-life balance and taking action to address it. The Covid-19 pandemic has changed the world of work both in terms of where people do their work, thanks to the increased prevalence of flexible and hybrid working, and in terms of the extent to which employees are willing to sacrifice their personal time and well-being to meet the demands of their role and any promotional or other career benchmarks and goals.

Quitting quietly can mean different things to different people and can mean “not taking work too seriously”, “prioritizing well-being”, “seeking a better work-life balance”, “working to reign” or “do no more than is necessary” to avoid performance management or misconduct proceedings.

In most cases, quitting quietly involves providing what a contract requires, but not undertaking additional work outside working hours, duties outside of normal duties, or generally going beyond what is required. There is a new wave of employees questioning whether going above and beyond their contractual obligations should be a prerequisite for promotion or engagement in their job; Should delivery of what they are contractually obligated suffice?

Why do employees quit quietly?

Quiet abandonment may be an indicator of something more than an employee simply wanting to find a better work-life balance. An employee whose work habits, productivity or attitude change significantly may react to a challenge in their private life or be demotivated or disenfranchised due to a factor in their professional life (such as a change in management, unrecognized work, feeling poorly paid or otherwise being overworked and/or feeling undervalued).

It may be more difficult to spot silent quits in an individual or among broader sections of a workforce when hybrid or flexible working models are common. Some indicators include: lack of enthusiasm, missing meetings, disengagement from team activities, decreased productivity, reduced flexibility, and reluctance to take on tasks outside of normal duties. Of course, some of these indicators may be actions that employees legitimately take to reduce stress and burnout and are not necessarily indicative of a problem; understanding the motivating factors is essential, whether it is an individual concern or a larger group of employees showing behavioral change. When a larger group quietly quits, this is a clear indicator of a problem within the company with employee engagement and motivation.

Is it a performance or drivability issue?

Quiet abandonment is not necessarily a performance or misconduct issue and can only be legitimately addressed as a performance issue below the expected standard, or when an employee’s attitude or conduct becomes unreasonable and must be corrected.

If duties are performed as required and the employee remains courteous and follows instructions, an employer who expects extra duties to be performed or overtime worked without specific compensation and agreement risks being responsible for all health and welfare consequences and the resulting legal risk of a claim for constructive dismissal or personal injury.

Employers who address a decline in productivity or a change in attitude without exploring the causes may also be at risk of a discrimination complaint, for example, when a health problem causes the change in productivity, or menopause or new childcare (or other care) commitments impact the employee’s time or energy.

What steps can employers take to combat silent quitting?

Understanding why an employee or a group of employees chose to quit quietly is the first step. When related to a particular challenge in the employee’s work or private life (for example, new childcare or care responsibilities or the management of an illness), this can be solved by practical measures to support the employee through the challenge: for example with flexibility in working models, coaching, training, mentoring, assigning tasks to others or a combination of these steps on a temporary or permanent basis, depending the case.

When disengagement is caused by a poor employee experience, for example, overwork, poor management, poor compensation, or feelings of undervaluation, these root causes will need to be explored and, if possible, addressed.

If the workloads are unmanageable, can some tasks be delegated or transferred? Managers should be trained to recognize the signs of burnout and stay in touch with their employees to ensure they can identify when support is needed. Employers should ensure that clear support is indicated for employees experiencing stress and poor mental health due to their workload or work environment. Happy, well-valued employees will have greater productivity and less time off sick than those whose needs are overlooked or who are expected to work in a work environment where doing extra work is considered the norm and where any attempt to maintain work-life balance is seen as a lack of commitment.

Increase in real living wage announced

It has been announced that the ‘Real Living Wage’ (RLW) rates, set by the Living Wage Foundation, are rising to £11.95 in London and £10.90 in the rest of the UK with immediate effect. The wage increase reflects what the LWF believes people need to earn to meet their daily needs. The LWF states that more than 11,000 employers voluntarily pay the RLW. The RLW is not the same as the National Living Wage which is set by the government following recommendations from the Low Pay Commission. The national living wage is currently £9.50 an hour for over-23s.

Although this announcement is, on the face of it, good news for many workers, with the cost of living crisis still in the headlines, concerns have been expressed that workers benefiting from the RLW will continue to way to struggle to meet the daily cost of living in the current climate.

The Covid-19 pandemic has shed light on health and well-being and its importance for individual employees and for companies to minimize sickness absence and recruitment costs. Some companies are considering a range of approaches to support employees during the current crisis, for example through a one-off payment to reflect the increased cost of living. Care should be taken to ensure that the terms on which such payments are made are clearly defined and understood. Companies can also support their workforce by considering flexible work demands, which can, for example, help reduce childcare costs; support employees with the skills and expertise to progress through the company into higher paying roles; and consider other financial benefits such as hardship loans or company sick pay.

Inevitably, some employers also seek to reduce their own costs, including labor costs. Changes in employment conditions and/or the need for possible redundancies raise a number of legal and practical challenges for companies.

Even when changes to non-contractual benefits are proposed, employers should not underestimate the impact on employee relations and the risk of arguments that these benefits are in fact contractual by custom and practice. The use of “termination and rehire” as a mechanism to change terms and conditions has made headlines and employers must ensure that in addition to complying with their legal obligations, new guidelines from the EU are taken into account. ‘Acas on this practice. We are currently awaiting publication of a statutory Code of Practice.

Tomorrow (September 23, 2022), the new Chancellor of the Exchequer, Kwasi Kwarteng, is expected to announce a “mini-budget”. He has already announced these measures include the removal of the health and social care tax, and it is expected that there will be an introduction of initiatives to get more people off benefits and into work. It has also been widely reported that the government may end the cap on bankers’ bonuses in a bid to stimulate the economy.

Right to work checks change on October 1

All employers in the UK have a legal obligation to ensure that they do not employ people who are not entitled to work (RTW) in the UK, regardless of their nationality. For British and Irish nationals, employers have been able to either carry out manual checks or use an adjusted process, put in place during the Covid-19 pandemic, which allows documents to be verified by video call.

From October 1, 2022, employers will no longer be able to carry out checks on the right to work using the adjusted method. Instead, employers can either continue to perform manual verifications by physically meeting the employee and verifying the appropriate documentation, or use the services of an Identification Service Provider (IDSP) who will use verification technology identification documents (IDVT) to verify the British or Irish National’s passport on behalf of the employer (although the employer should always ensure that they obtain and keep a copy of the document that the IDSP has verified , along with a copy of the IDVT report showing that the worker has the right to work in the UK).

Companies employing foreign nationals holding a biometric residence card, biometric residence permit or border work permit can continue to carry out an online verification of the right to work via the employer verification service of the government. (Read more about this in our Previous overview.)

Compliance with right to work controls is essential. Failure to comply can result in civil penalties of up to £20,000 per worker and possibly a custodial sentence where an illegal worker is employed without the proper right to check the work being carried out.

Michael A. Bynum