Employment Law Update – December 2023

Holiday Pay Updates

The Government recently published its response to the consultation on holiday entitlement and proposed reforms. The Employment Rights (Amendment, Revocation and Transitional Provisions) Regulations 2023 will make changes which will come into effect next year.

The headline changes are as follows:

• Employers can use the accrual method of 12.07% to calculate holiday entitlement for irregular hours and part year workers. 
• Irregular hours and part year workers can be paid “rolled up” holiday pay, that is, pay on top of their usual pay to account for holiday accrual rather than being paid when that holiday is actually taken.
• Employers will now have clarity on how to calculate holiday pay for workers. The minimum 4 weeks statutory leave will be payable at the rate of a normal week’s pay, which will be defined to include overtime, commission and payments relating to length of service, seniority or professional qualifications, and the additional 1.6 weeks will be payable at basic rate. 
• Small businesses (with fewer than 50 employees) undertaking a TUPE transfer will be permitted to consult directly with their employees where there are no worker representatives.

Comment:

The above only represents a broad overview of the changes and we would recommend you seek advice as to how your business may be impacted. 

Sexual Harassment in the Workplace

The Government has passed legislation which will place a new duty on employers to take reasonable steps to prevent sexual harassment of their employees. Should they fail to do so, the award for a successful claim of sexual harassment at Tribunal can be increased by up to 25%. 

Even where a claim is not brought, the duty will be enforceable by the Equality and Human Rights Commission (EHRC). The EHRC are expected to bring out a code of practice which will outline steps employers should take to prevent harassment, which Employment Tribunals should take into account when considering whether an employer took all reasonable steps to prevent sexual harassment. 

The new legislation is expected to come into force in October 2024.

Comment:

Employees already have the right not to be subject to sexual harassment at work. The new legislation will impose a new and additional duty on employers to take reasonable steps to prevent sexual harassment of their employees.

In light of the potential financial implications, it would be advisable for policies and procedures to be reviewed to ensure this is adequately covered. A token policy is not sufficient to discharge the duty.  

Flexible Working to Become a Day One Right 

The Flexible Working (Amendment) Regulations 2023 have been laid before Parliament. 

The Regulations remove the requirement for an employee to have 26 weeks service to request flexible working, making this a day one right. 

This will apply to requests made from the date the new legislation comes into force, on 6^th April 2024. 

Comment: 

The Employment Relations (Flexible Working) Act 2023 was published earlier this year with proposed amendments to the framework, but did not include the much anticipated removal of the 26 week service requirement. The Flexible Working (Amendment) Regulations 2023 has now dealt with this.

The other anticipated changes, including increasing the number of requests that can be made in a 12 month period, will require additional legislation before they are brought into force but will likely coincide with the 6^th April 2024 changes.

Carer’s Leave Regulations 

The Carer’s Leave Regulations 2024, which provide for qualifying employees to have up to a week of unpaid carer’s leave in a 12-month period, are expected to come into effect from 6^th April 2024.

The right to make this request will be a day one right and will apply to all employees who have a dependant with a long-term care need where they wish to take leave to provide or arrange care for that dependant. 

A “dependant” is defined broadly, and will include a spouse, civil partner, child, parent, person who lives in the same household as the employee, or a person who reasonably relies on the employee for care. 

A “long-term care need” is defined as a mental or physical illness or injury requiring or likely to require care for more than three months; a disability under the Equality Act 2010, or issues related to old age. 

Employees cannot be penalised for relying on their right to take this statutory leave, and a dismissal for any reason connected with an employee taking carer’s leave will be automatically unfair. Employers do not have the right to require employees to provide evidence of the their entitlement to the leave. 

Comment:

This right is an addition to the existing employment rights to take time off for dependants, and the right to paid annual leave. This legislation is intended to fill the gap for longer-term care needs that may not be covered by these rights.  

Employers should consider updating policies and procedures to ensure that all forms of statutory leave are covered. Employers will also be advised to utilise systems that enable them to track various leave and the reason for that absence, to enable them to monitor the days taken out of the various allowances for each type of leave.

Protection from Redundancy: Pregnancy and Family Leave

The Maternity Leave, Adoption Leave and Shared Parental Leave (Amendment) Regulations 2024 have been laid before Parliament.

Regulation 10 of the Maternity and Parental Leave Regulations 1999 presently provides that parents on maternity, adoption or shared parental leave should be offered first refusal of any suitable alternative employment available in a redundancy situation.

The proposed legislation will extend the protected period to which this right applies, as follows:

• For those on maternity leave, the protected period wil cover pregnancy and 18 months from the first day of the estimated week of childbirth. 
• For those on adoption leave, the protected period will cover 18 months from placement to adoption. 
• For shared parental leave, the protected period will cover 18 months from birth, provided the parent has taken a period of at least 6 consecutive weeks of shared parental leave and is not already covered by maternity or adoption leave. 

This extended right will apply to any period of maternity or adoption leave ending on or after 6^th April 2024, and any applicable shared parental leave starting on or after 6^th April 2024. 

A failure to offer a priority employee a suitable alternative vacancy could result in an automatic unfair dismissal claim, and potentially a discrimination claim, both of which have the potential for uncapped damages.

Comment:

Employers should take these changes into consideration if there are any restructures or redundancies planned for 2024 as there is a wider group of individuals in a business who will potentially benefit from the right of first refusal when the legislation comes into force. 

There is presently no legal authority as to how to prioritise where there are two or more individuals who have the right of first refusal. It is likely that a further selection process would need to be applied to those employees. Given the risk of uncapped damages, advice should be taken to ensure best practice is followed in these situations.

Case Law Updates

Miss AB v Royal Borough of Kingston upon Thames

Facts:

Miss AB was a trans woman who transitioned whilst at work, giving her employer eight months’ notice of her transition before she transitioned. The Respondent failed to update its records to reflect her gender and name which resulted in Miss AB being deadnamed (using a trans person’s pre-transition name) for at least two years.

Miss AB further claimed that her employer had failed to support her and had not implemented appropriate policies. 

Miss AB claimed direct discrimination on the grounds of gender reassignment under the Equality Act 2010. 

Outcome:

Miss AB was awarded approximately £25,000 for discrimination.

Comment:

This case is a reminder for employers to have adequate training and policies in place for trans and non-binary staff. Staff should receive support and there should be systems in place to accommodate updated names and pronouns in such situations.

CIPD has recently published guidance on transgender and non-binary inclusion at work. Whilst not law, it provides a useful overview for employers to understand workplace issues that transgender and non-binary employees may face, and how employers can support them.

Fischer v London United Busways Limited

Facts:

Ms Fischer is a trans woman supplied by an employment agency to drive buses for Busways. Part of her claim was an allegation that another bus driver had called her a “w*nker”, which she argued was a gendered word usually directed at men and which was intended to insult her. 

The Claimant alleged that she has been subject to discrimination due to her gender reassignment. 

Outcome:

The Tribunal agreed that the insult was not a gender-neutral word and that had the incident happened, the Claimant would have been found to have been discriminated against on the grounds of her gender reassignment. However, the Tribunal did not believe the term had been used and dismissed her claim.

Comment:

The use of swearwords in the workplace can cause difficulties. Depending on the word and context in which they are used, this can, as above, lead to a claim for discrimination. 

Whilst what is appropriate in one workplace will not be appropriate in the next (e.g. a construction site versus and office), employers should ensure equality and diversity training and policies are kept up to date and properly implemented, to avoid situations of less favourable treatment or offensive conduct on the grounds of a protected characteristic, which could constitute discrimination. 

Smith v Greatwell Homes

Facts:

Ms Smith’s employer encouraged her to apply for a more senior role with management responsibilities should one become available. Ms Smith fell pregnant and commenced maternity leave in September 2020. In April 2021, Ms Smith was informed of changes in the workplace during her absence, including the appointment of colleagues into management roles of the kind Ms Smith had previously been encouraged to apply for. 

Ms Smith claimed discrimination on the grounds of maternity leave due to the failures to communicate job opportunities and changes in the workplace during her absence. 

Outcome:

Ms Smith’s claim was upheld, concluding that the reason Ms Smith was not informed of the changes within the company and the subsequent available roles was because she was on maternity leave. As a result, she was denied the chance to apply for the roles and progress her career. 

The Tribunal also criticised other aspects of the Respondent’s treatment of the Claimant, such as their negative attitude when she became pregnant, as well as their poor handling of her grievance. 

Comment:

Employers should be mindful to agree on the level of communication their employees should expect whilst on maternity leave, to strike the right balance between excluding them entirely and engaging with them. 

It highlights the importance of having to have policies, training and procedures in place and implemented, to prevent businesses appearing to hold a general attitude or mindset that is unfavourable to a particular group of people.  

Follows v Nationwide Building Society

Facts:

Mrs Follows was employed as a Senior Lending Manager at Nationwide on a homeworking contract. She worked in the office two to three days per week, but spent the rest of the week working at home which enabled her to care for her disabled mother.

Nationwide decided that all Senior Lending Managers should be office-based, which Mrs Follows did not agree to. Her role was made redundant.  Mrs Follows claimed that the blanket policy for office-working was indirect discrimination on the basis of associative disability. 

Outcome: 

Mrs Follows was successful in her claim of indirect associative discrimination relating to disability. Nationwide had implemented a policy, criterion or practice of requiring employees to work in the office full time, which placed Mrs Follows at a disadvantage by association with her disabled mother and her caring responsibilities. 

Comment:

This decision is not binding, but shows the wide application of the law by the Tribunals in that indirect discrimination can apply where the protected characteristic (in this case, disability) is associative and not possessed by the Claimant themselves.

An employer implementing a blanket policy should always be mindful of implications of doing so. A policy, criterion or practice applied by an employer that is said to be indirectly discriminative can be defended if the business can show that it used proportionate means to achieve a legitimate aim. It can support a business’ case if they can demonstrate consideration being given to alternative options before implementing a particular policy. It is recommended that advice is taken on policies and procedures at drafting stage, to avoid such issues where possible. 

Mr Sazbolcs Fekete v Citibank N.A.

Facts:

Mr Sazbolcs Fekete was a Senior Analyst working in financial crime. He worked for Citibank for 7 years. Citibank had policies in place regarding honesty. It also set out clear expenses rules which stated that travel and meals were not reimbursable for spouses, and that when meals were submitted for reimbursement a list must be provided of those who attended the meal.

Mr Sazbolcs Fekete submitted an expense claim from a business trip for lunch and dinner, which consisted of two meals apiece. Mr Sazbolcs Fekete insisted when questioned that he was on the trip alone and had eaten all of the meals himself. Citibank raised a formal investigation, and still Mr Sazbolcs Fekete maintained he had eaten the meals himself.

Some time after the investigation, Mr Sazbolcs Fekete admitted he had shared the meals with his partner who had accompanied him on the business trip. Mr Sazbolcs Fekete was dismissed for gross misconduct. 

Outcome:

The Tribunal found that the dismissal was fair. Mr Sazbolcs Fekete was employed in a position of trust in a financial organisation. He had breached the expenses policy and then repeatedly lied about the circumstances when asked.

Comment:

This case highlights that misconduct can be the wider issue or implications of the misconduct, rather than the seriousness of the specific act. Whilst the monetary amount involved was small in this case, the misconduct was the dishonesty of the employee. This was particularly serious in the circumstances due to the nature of the Respondent’s business, the clear policies in place, and Mr Sazbolcs Fekete’s many opportunities to come clean.

Independent Workers Union of Great Britain v Central Abritration Committeee 

Facts:

The Independent Workers Union of Great Britain (the Union) is an independent trade union whose members include Deliveroo Riders. The Union submitted an application to Central Arbitration Committee (CAC) for a group of Deliveroo riders to be recognised for collective bargaining.  CAC refused on the basis Deliveroo riders were not “workers” ( a pre-requisite of such a request under the lesiglation).

The High Court and Court of Appeal dismissed the Union’s claim for judicial review of the CAC’s decision. The Union appealed to the Supreme Court.

Outcome:

The Supreme Court confirmed that personal service is an essential feature of the concept of an employment relationship. Because of the right to substitute (i.e. a rider did not have to perform their work personally), there was no obligation to provide personal service and therefore no employment relationship. Therefore, they did not meet the criteria to apply for recognition for collective bargaining.

Comment:

Whilst this judgment has specific application to the legislation relating to collective bargaining, it serves as a useful reminder that the presence of personal service is essential to the concept of an employment relationship. In such circumstances,  the right to substitute is not only necessary to avoid an employment relationship, but must also be a true right in practice.

Employers must be cautious when drafting contracts that they are a reflection of the true reality of the situation. If an individual is an employee or worker rather than genuinely self-employed, the individual automatically benefits from additional rights which can be costly to backdate.