UK Employment Tribunal Fees Unlawful

The Supreme Court in the UK handed down its judgement on 26 July 2017, holding that the introduction of fees in the Employment tribunals prevents access to justice and is unlawful under both domestic and EU law. This is a very significant decision in the field of employment law and the enforcement of employment rights.

Under the Employment Tribunal and Employment Appeal Tribunal Fees Order 2013 (the Fees Order) introduced in 2013, claimants in Employment Tribunals or the EAT became liable to pay a fee in order to bring and pursue their claims, including both an “issue fee” when a claim form is presented to the tribunal and a “hearing fee”. The level of the fee depends on whether the claim is brought by a single claimant or by a group and also depends on the nature of the claim. Fees for a single claimant total £390 for a “type A” claim and £1,200 for a “type B” claim.  In the EAT, fees of £1,600 are payable.  Claimants and appellants can seek remission of fees based on their disposable capital and gross monthly income.

The trade union UNISON sought judicial review of the Fees Order, and the challenge was rejected by the High Court and the Court of Appeal. However, the Supreme Court has held that the Fees order must be quashed so that tribunal and EAT fees cease to be payable under the existing scheme and those fees already paid will be reimbursed by the Government.

The Court considered the UK common law right of access to justice. It held that unimpeded access to the employment tribunals is of value not only to the litigants, but also to the benefit to the public as a whole. Tribunal claims ensure that legislation made by Parliament and the common law created by the courts are applied and enforced. To deny access to tribunals would mean that laws were liable to become a dead letter and that the work done by Parliament may be rendered nugatory.

For fees to be lawful they had to be set at a level that everyone could afford, taking into account the availability of remission. The evidence was that this requirement had not been met. The dramatic fall in the volume of cases received since the introduction of fees (approximately 70 per cent reduction in the number of cases) showed that that a significant number of people who would otherwise have brought claims were unable to afford to do so. This was the case even taking into account the availability of fee remission, which was far lower than the Government had anticipated.  In addition, fees can prevent access to justice if it was considered futile or irrational to bring a claim.  This could apply where no sensible person would proceed in a low value claim unless he or she could be virtually certain that the claim would succeed, that the fees would be reimbursed and that the tribunal’s award would be paid in full by the employer.  In practice, many ET claims do not receive full payment from the respondent or seek only modest amounts. The Fees Order effectively prevented access to justice and was unlawful.

The Court did accept that a statutory power could authorise an intrusion upon the right of access to the courts, but such a degree of intrusion must not be greater than is justified by the objectives which the measure is intended to serve. Whilst it could be possible to justify  the Fees Order, for example by showing that higher fees would generate a higher income, transferring a higher proportion of costs to users of the system, it had not been shown that a less onerous fee would have been any less effective in meeting that objective.  In addition, there was no evidence that fees at the level in the Fees Order  had been justified by other objectives: deterring weak or vexatious claims, or achieving earlier settlements through Acas.

As well as being unlawful under UK common law, the Court also held that the Fees Order was contrary to the EU principles of effectiveness and effective judicial protection and the right to a fair hearing under Article 6 of the European Convention on Human Rights. Although the proper administration of justice may justify imposing a financial restriction under EU law, that restriction must maintain a level of proportionality between the means employed and the legitimate aim sought.  Since the Court had held that the fees imposed by the Fees Order are unaffordable by some people, and that they are so high as to deter those who can afford them from pursuing claims for small amounts and non-monetary claims, the Fees Order imposes limitations on the exercise of EU rights which are disproportionate, and is unlawful under EU law.

In a separate judgment, Lady Hale held that the Fees Order was indirectly discriminatory under S.19 of the Equality Act 2010. She held that because ‘Type B’ cases (including discrimination claims) attract a higher fee, and a higher proportion of women bring Type B claims than bring Type A claims, women are placed at a particular disadvantage compared with men. There was no evidence that the higher fees for Type B claims could be justified as a proportionate means of achieving the Government’s aims.

The Government must now seek to repay claimants who have paid fees. This will not be an easy task with some employers having already reimbursed fees where the claimant has been successful.

It is also not clear whether fees will disappear entirely. As set out in the judgment, if the level of fees could be shown to be proportionate to achieving the aim, the government could bring in a different fees regime, such as a lower level and contribution from both parties.  The government could also promote the use of ADR or expand the use of the concept of losing party pays (as is the case in other courts).

A question also arises as to whether there will now be a rush of claims by employees who were deterred from bringing claims between 2013 and 2017 due to the fee regime. It may be possible for them to bring them ‘out of time’, claiming it was not reasonably practicable for them to bring a claim.  No advice has yet been given to tribunals as to how they should deal with any such claims.


Foot and bicycle couriers may be entitled to a tax deduction that’s easy to swallow

The digital age has revolutionized the way we eat out.  At the tap of a finger we can now enjoy our favourite restaurant-cooked meals in the comfort of our own homes.  This “dining in” trend has speckled bike lanes with couriers sporting thermal backpacks.  As the trend is on an upswing, bicycle and foot couriers should turn their minds to a unique tax deduction they may be able to claim.

It all began nearly 20 years ago when Alan Wayne Scott, a Toronto-based “foot and transit courier”, pushed the limits of tax law in Scott v the Queen.  In the decision, the Federal Court of Appeal described a day in Scott’s life as a “foot and transit courier”:

  • 6:45 am: A dispatcher advises Scott of the packages to be delivered;
  • 7:45 – 9:30 am: Scott picks up and drops off packages in the downtown Toronto core;
  • 9:30 am – 6:00 pm: Scott travels by subway and foot to make deliveries.

Scott worked 5 days per week, 52 weeks per year.  Each day, he covered approximately 150 km by foot and public transit, for a total of 39,000 km per year.  According to Scott, the physically demanding nature of his job required him to consume what essentially amounted to an extra meal each work day.   He sought a tax deduction for the amount of the extra food and water he was required to consume as fuel for his job.

Subsection 9(1) of the Income Tax Act (the Act) applies to independent contractors and provides that a taxpayer is required to declare profit from a business as income.  In calculating profit, certain business deductions are allowed.  Subsection 18(1)(a) provides that that allowable deductions include an expense made or incurred “for the purpose of gaining or producing income from the business”.

Typically, the costs of food and water during the work day are not allowable deductions.  Rather, they are considered non-deductible personal and living expenses captured by subsection 18(1)(h) of the Act.  Nonetheless, the Court found in Scott’s favour, stating that “just as a courier’s automobile requires fuel in the form of gas to move”, Scott required “fuel in the form of food and water”.  The Court reasoned that, since couriers who drive automobiles are allowed to deduct the costs of their fuel,  so too should Scott, as a foot and transit courier, be allowed to deduct the cost of his fuel; i.e., the extra food and water he consumed to do his job.

Following the Scott decision, Canada has allowed self-employed foot and bicycle couriers, as well as rickshaw drivers, to deduct a daily flat rate of $17.50 (without receipts) for the cost of the extra food and beverages they must consume in a normal working day (8 hours).  The applicable Government of Canada notice requires individuals claiming the deduction to be prepared to provide logbooks demonstrating the days and hours worked on each of the days the deduction is claimed.  The Canada Revenue Agency may also ask for dispatch slips and other documentation.  Any deduction claimed beyond the $17.50 flat rate requires supporting receipts and evidence that the nature of the work demanded an amount of food and beverages in excess of what the average person would consume.

Written with the assistance of Elana Friedman, summer student. 

Data protection and employment law update (Italy)

The Italian Data Protection Authority (IDPA) is increasingly faced with issues relating to the ways employers may monitor the Internet usage of its employees. In 2016, the Authority handed down two important decisions on this topic.

In the first decision, the IDPA stated that an Italian University (the University of Chieti and Pescara) was acting unlawfully in the way that it used e-mails to trace the identity of Internet users. This University, without having given any prior warning to its employees, implemented a system that retained information regarding personal Internet access, for the purpose of service monitoring, internal security and for the prevention of possible investigative inquiries by the Authorities. In essence, the policy, which controls, filters and monitors information on Internet data, enabled the employer to indiscriminately monitor employees from a distance. The IDPA’s decision was based on the argument that this policy breached the relevant principles of “actual need and proportionality of the treatment”. The IDPA considered that the policy was not in accordance with the law because it did not refer to tools used by the employees in performing their duties and had not been previously communicated to the employees.

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Mitigation Income and Wrongful Dismissal Damages – The Court of Appeal Muddies the Waters

The Wrongful Dismissal – What Happened?

Esther Brake worked for McDonald’s for over twenty-five years, first in Cornerbrook, Newfoundland, and then as a restaurant manager in Ottawa. She had received nothing but excellent reviews for years, but in 2011 she was suddenly told her performance was inadequate and that she had two options: accept a demotion or be fired. Ms. Brake refused the demotion and filed a successful action for wrongful dismissal.

The most interesting issue in this case was not the question of whether the dismissal was justified or not, but whether the trial judge erred by not subtracting Ms. Brake’s post-dismissal income from her damages.

The Trial Judge Holds Inferior Income is Not Deductible as “Mitigation Income”

The trial judge awarded Ms. Brake damages based on 20 months of remuneration, and made no deductions for the new work she had acquired in the meantime. Ms. Brake had obtained significantly lower-paid work that the trial judge described as “so substantially inferior to the managerial position she held with the defendant that the former does not diminish the loss of the latter”. In other words, her new income was so insignificant that it should not be deducted from her damages.

This cast doubt on the application of the well-established principle that following related to an employer’s duty to provide notice of termination is the employee’s duty to mitigate the damages flowing from a wrongful termination. Mitigation income, being the income earned in the “reasonable notice” period following an employee’s dismissal will typically be deducted from any amount owing to the employee.

The Court of Appeal Weighs In

The trial judge’s findings with respect to Ms. Brake’s constructive dismissal were largely upheld.

However, with respect to mitigation income, the majority in the Court of Appeal held that her mitigation income did not need to be deducted, but for different reasons, which were:

  1. Some of it included employment insurance benefits, which are not to be deducted.
  2. Brake was entitled to termination and severance pay that could not be deducted because they are statutory minimums and the majority of her income in the intervening period since her termination was earned during Ms. Brake’s “statutory entitlement period”.
  3. Some of Ms. Brake’s income earned following her dismissal was from a job she had while she was still working at McDonald’s and so was not mitigation income.

The Court of Appeal’s comments regarding a “statutory entitlement period” appear inconsistent with how statutory amounts have typically been treated when an employee commences a wrongful dismissal action and receives damages inclusive of any statutory amounts. In such a case, the employee’s statutory entitlements are paid by way of lump sum, and so it is that lump sum amount that the employee, regardless of mitigation income, at minimum must receive. It is not the case, however, that mitigation income earned over the period that corresponds with the period over which statutory amounts would have been paid (if the severance payment was treated as a severance period, which it is not. Indeed, the Ontario Employment Standards Act, 2000 requires severance be paid by lump sum and an employer cannot simply provide an employee with working notice instead of severance pay) is not to be otherwise deducted from the common law wrongful dismissal damages award.

Interestingly, Justice Feldman wrote a concurring opinion agreeing with the trial judge’s reasoning that the inferiority of Ms. Brake’s new employment should be considered when awarding damages. The question for Justice Feldman is whether the or not the employee would be in breach of their duty to mitigate if they turned down the inferior job offer. If the answer is no, then the income is not mitigation income. This, however, seems contrary to the well-established principles of mitigation in the employment law context and the principle that the employee is not to be placed in a better position than they would have been had reasonable notice of termination at common been provided.

Employer Takeaways

The Court of Appeal majority has likely created some confusion over how mitigation income is to be deducted based on their discussion of a “statutory entitlement period”.  And Justice Feldman in her concurring opinion agreeing with the trial judge’s conclusion that “inferior” mitigation income may not need to be deducted from a wrongful dismissal damages award further muddies the water on this issue.

We may have to wait until the Court of Appeal weighs in again, or until such an issue is addressed by the Supreme Court of Canada, to gain some clarity on these issues.

For now, however, employers should be aware that it may not be the case that any income earned over the reasonable notice period will be deducted from wrongful dismissal damages. That said, it remains the case that if an employee finds a new job during this period, it is likely that this will serve to reduce any common law liability on the employer. Thus, employees should still be held to their duty to mitigate and employers should help if possible, and certainly not hinder them, in doing so.

Written with the assistance of Kevin Schoenfeldt, summer student.

Protected species? Considering rights associated with pregnancy and parental leave in the event of redundancy

When an organisation is considering making redundancies, it is important to consider whether employees who are pregnant or on parental leave are afforded any special protections under Australian law.

Both the Fair Work Act 2009 and anti-discrimination legislation include provisions particularly relating to pregnancy and parental leave, including the right to return to the same or a similar position.  The fact that declaring a position redundant may result in the termination of an individual’s employment means consideration must be had to whether the termination employee’s employment is in fact lawful, even if there are genuine grounds for making a position redundant.  This takes into account whether the termination violates any of the protections afforded to pregnant and parental leave employees.  In addition, the fact that the Fair Work Act 2009 provides a reverse onus of proof for adverse action matters means that there is an even higher obligation on employers to ensure that the redundancy was lawful in all of the circumstances.

The position in Australia can be contrasted against the position in France, for example, where employers are not allowed to dismiss an employee from the moment she is medically certified as being pregnant and must reinstate an  employee who was terminated when pregnant when informed of her pregnancy.   The position in France is discussed in an earlier post which can be assessed at the following link.

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Toronto firefighters in hot water over vulgar tweets

Two Toronto firefighters found themselves fighting to get their jobs back after some vulgar tweets on their personal Twitter accounts landed them in hot water. The cases of Matt Bowman and Lawaun Edwards demonstrate the importance of ensuring employees understand the reach of their social media accounts. After a National Post article exposed both firefighters for their tweets, Toronto Fire Services (“TFS”) terminated their employment.  Both filed grievances.

Arbitrator Newman upheld Bowman’s dismissal due to the vulgarity and quantity of Bowman’s tweets, which were found to be objectively sexist and racist, and their resulting implications.  The arbitrator honed in on the fact that Bowman’s Twitter profile clearly identified him as a Toronto firefighter, and included a picture of him in full uniform. This was crucial in establishing that the tweets at issue caused reputational damage to TFS, making his continued employment untenable.

Of note, TFS had a genuine policy in place aimed at recruiting more female firefighters. The harm caused by the National Post article was damaging to this goal, and to the public’s trust in TFS.  Moreover, it was clear that Bowman lacked any real remorse.

By contrast, Arbitrator Misra found that Edwards’ dismissal was too severe and imposed lesser discipline. Unlike Bowman, Edwards had posted only one tweet of major concern. Further, he had responded to Bowman’s tweets only in a misguided attempt to educate him. Asking what a reasonable and fair-minded member of the public would think of Edwards’ tweets, if apprised of all the facts, Arbitrator Misra found that, although the one-time event was not significant enough to warrant dismissal, serious consequences had to follow in the form of a three-day unpaid suspension.

Given the wide reach of social media – and especially Twitter – employers should consider educating their employees on its use and reach. Taking a proactive approach when implementing workplace social media policies could save an employer from the irreparable harm of an off-side tweet.

Written with the assistance of Travis Bertrand, summer student.


What impact will Brexit have on UK employment law?

As reported on the blog last year, the result of the EU referendum in the UK on 23 June 2016 was that the UK should leave the EU. Since then, formal notice of withdrawal was served on 29 March 2017 which means that the UK’s exit from the EU will take place once agreement is reached but, in any event, by 29 March 2019 (unless there is agreement for an extension of the negotiation period). This post looks at the latest on what Brexit will mean for UK employment law.


Key parts of UK employment law are derived from EU law, which provides minimum standards for domestic employment law.

Some EU law has been implemented in the UK by way of primary legislation, for example, the Equality Act 2010 which prohibits discrimination on a number of protected grounds such as race, sex, age, disability, religion and belief and sexual orientation. These rights can only be changed by primary legislation and would not fall away when the UK exits the EU.

Other EU law, such as the law on agency workers’ rights and working time, has been implemented in the UK by way of secondary legislation. Following withdrawal from the EU, these rights would fall away if no saving provisions are put in place.

The Government’s White Paper

After serving notice of withdrawal from the EU on 29 March, the UK Government published its White Paper on how it would legislate for that withdrawal by way of the Great Repeal Bill, which was introduced to Parliament for its first reading on 13 July 2017 under its new name, the European Union (Withdrawal) Bill.

In its White Paper the Government confirms that the Bill will do three main things:

  • First, it will repeal the European Communities Act 1972 and return power to UK institutions.
  • Second, it will convert EU law as it stands at the point of exit into UK law – (this will allow businesses to continue operating, knowing that the rules won’t change significantly overnight).
  • Finally, the Bill will create powers to make secondary legislation to enable any necessary corrections to be made to UK laws which would not otherwise make sense after Brexit, and to enable UK laws to reflect the terms of any withdrawal agreement.

Workers’ rights and equalities

So what will this mean for employment law?

Until the point of exit, (which is likely to be at the end of March 2019), the UK remains a full member of the EU, and therefore all rights and obligations of EU membership remain in full force. This means that EU law will continue to be implemented and applied until then.

As mentioned above, some EU employment law has been implemented in the UK by primary legislation which will not fall away on exit from the EU. However, other EU law, which has been implemented by way of secondary legislation, would fall away on repeal of the European Communities Act, unless saved by the provisions of the Bill. The provisions of the Bill as drafted do just this.

The Bill will convert all existing EU law into domestic law, so that workers’ rights which are enjoyed under EU law will continue to be available in the UK after Brexit.

Employment protection rights will be further strengthened by the Bill’s incorporation of the case law of the Court of Justice of the European Union (CJEU), which means that where workers’ rights have been extended by judgements of the CJEU, (such as those on the calculation of holiday pay), these rights will continue to be protected in the UK.

The Bill provides that historic European case law be given the same binding status in the UK courts as decisions of the UK Supreme Court. This means that existing EU case law will be departed from in only exceptional circumstances, although Parliament may of course change the law, and therefore overturn case law, where it decides it is right to do so.

The White Paper reminds us that in a number of areas (such as the right to statutory maternity leave) UK employment law already goes further than the minimum standards set out in EU legislation, and the Government intends to continue to protect and enhance the rights people have at work.

The Bill is unlikely to receive its second reading in Parliament before September and whether it remains as currently drafted by the time it is finalised will of course depend on its progress through Parliament. However, it is unlikely that its key provisions will change significantly.


In summary, so far as workers’ employment rights are concerned, no imminent changes are planned by the UK Government. All EU-derived laws which apply at the point of exit from the EU will be saved by whatever means necessary.

However, in the longer term, as is the case with all UK employment law, EU-derived employment law may be amended or repealed where Parliament considers it appropriate to do so.

ContractorCheck Canada App

Employee or contractor?

The ContractorCheck Canada application (App) is a practical tool developed by the Norton Rose Fulbright employment and labour team. It is designed to help employers accurately determine the status of their workforces and whether they should be considered contractors or employees.

Defining employees versus contractors can be sometimes challenging; improperly classifying them may have consequences on your business operations. Norton Rose Fulbright has lauched the ContractorCheck Canada App to help employers navigate through their working relationships more effectively as well as mitigate the legal risks that may prevail.

Check it out!

The app is hosted on our website and will guide you through a series of questions, which take approximately 10 minutes to complete. An instant report on workers status will then be emailed to you.

Visit the ContractorCheck Canada app on our website.

Whistleblowing – what amounts to the public interest?

A recent Court of Appeal decision has confirmed that a disclosure which is in the private interest of the worker can still be considered to be in the ‘public interest’ and therefore fall within the whistleblower protection included in the Public Interest Disclosure Act 1998. However, it did confirm that any decision will depend on its facts.

Under the Employment Rights Act 1996, the definition of a qualifying disclosure for whistleblowing purposes includes that “in the reasonable belief of the worker making the disclosure, [the disclosure] is made in the public interest…” What is meant by this phrase was examined in this case.

In the case, the employee complained about the manipulation of the company accounts, one of the consequences of which was that a reduced commission payment was paid to him and approximately 100 other senior managers. The issue that therefore arose was whether a disclosure which is in the private interest of the worker could be considered to be in the public interest simply because it also relates to a relatively small number of other workers as well.

The Court of Appeal held that it could fall within the public interest, stating the mere fact something is in the worker’s private interests does not prevent it also being in the public interest. Whether a disclosure falls within the public interest will depend on the character of the interest served rather than the number of people sharing that interest.  Each case will therefore be heavily dependent on its facts.

In deciding whether a disclosure was in the public interest, the courts should consider all the circumstances, and in particular adopt four criteria:

  • The numbers in the group – the larger the number affected, the more likely a disclosure will be in the public interest;
  • The nature of the interests affected – a disclosure of wrongdoing affecting a very important interest (for example, the welfare of patients in the healthcare sector) is more likely to be in the public interest than a disclosure of a trivial wrongdoing;
  • The nature of the wrongdoing disclosed – i.e. whether it is deliberate or unintentional; and
  • The identity of the alleged wrongdoer – the larger or more prominent the wrongdoer the more likely this is to engage the public interest.

But the Court did suggest that employment tribunals should be cautious about reaching a conclusion that matters affecting just people within a workforce is a ‘public interest’ disclosure: they should do so after balancing the relevant factors.

Whilst useful in providing some guidance and avoiding the position that it would be “extremely unsatisfactory if liability depended on the happenstance of the circumstances of other employees”, it will undoubtedly lead to further litigation and a lack of certainty as to whether a disclosure will fall within the public interest

Modern Workplaces – Wide ranging recommendations in the Taylor Report

The long awaited Taylor Review of Modern Working Practices was published on 11 July. The recommendations from the review throw some interesting questions into the mix. The general theme  is the need for an adaptable, consistent and protected community in which employment and security of workers can prosper.  It will be interesting to see how this will transpire in practice. Some of the main points from the review are mentioned below, but a further more detailed briefing will follow.

Employment status

The Review calls for the retention of the three-tier approach to employment status, with further clarification of the definition of worker, which would be renamed “dependent contractor” . This should be outlined in legislation.  The report recommends placing less emphasis on the requirement for personal service for the “worker” category and giving the “control” exercised by the company greater importance.  The confirmation of the employment status would be a term included in the statement which must be given to employees under section 1 Employment Rights Act 1996 (ERA). The report also recommends extending the right to this written statement to dependent contractors and introducing a standalone right to bring a claim for compensation if the employer fails to do so, and a right to determine employment status at a tribunal before paying substantial tribunal fees.  Another recommendation is that effort should be made to align employment status with tax status.

 The ‘gig’ economy

The proposed change to the test for worker status would potentially bring many more individuals in the “gig” economy within worker status. Workers are entitled to the National Minimum Wage (NMW) and the report includes various proposals as to how the NMW should apply in these circumstances.  For example, the Government could adapt the piece rate legislation to enable platforms to compensate workers based on output.  However, this would also include a requirement for the company to provide information to the worker about the level of work they could expect to receive at that time.

Zero hours Workers and Agency Workers

In trying to balance the desire of some to retain flexibility with those who need certainty and more formalised employment, the report recommends introducing new rights for agency workers and those on zero hours contracts to formalise the reality of working arrangements. People engaged on zero hours contracts should have the right to request fixed hours with the starting level based on the average hours worked over the previous 12 months. Agency workers should have the right to request a direct contract of employment with the hirer if they have been placed with the same hirer for 12 months, with the hirer required to consider requests reasonably. The report also recommends that the Government must take steps to ensure that flexibility does not benefit the employer, at the unreasonable expense of the worker, and that flexibility is genuinely a mutually beneficial arrangement. It therefore suggests that the Low Pay Commission should consider the introduction of a higher rate of NMW payable for hours which are not guaranteed as part of the contract where a worker is on a zero hours contract, set at a level to incentivise employers to guarantee hours as far as possible.  In addition, to make it easier for casual workers to qualify for statutory employment rights the report recommends increasing the maximum gap between work assignments which will not break continuity of employment from one week to one month.

Other benefits

The report recommends that individuals should have the choice to be paid rolled-up holiday pay (something currently not permitted), meaning that a dependent contractor could choose to receive a 12.07% premium on pay rather than being paid during holiday periods. However, a mechanism would have to be included to ensure that holiday was taken. The report also recommends increasing the reference period for the calculation of holiday pay to 52 weeks so that casual workers receive holiday pay based on their average earnings over the year rather than over a shorter period.

Employee representation

The report recommends that the Government should examine the effectiveness of the Information and Consultation Regulations, extend them to cover workers and reduce the threshold for employee requests from 10% to 2%.


In line with the increased requirement on employers to publish information, the report recommends that the Government should require companies of a certain size to publish information relating to their model of employment, including such matters as the number of requests received, and agreed to, from zero hours contract workers for fixed hours.


Whilst this report has been welcomed, significant work will be required to introduce the amendments to the current legislation. With the government’s plate full with the likes of Brexit negotiations, it will be interesting to see how this review is taken forward and recommendations are progressed.