Welcome to our Autumn edition of CL Q.E.B

The new government has promised the biggest shake up in employment law reform in a generation. Well before the election was called, Labour had already signalled their intention to strengthen employment rights with a promise to legislate within the first 100 days of being elected. As such, two key pieces of legislation are on track to be laid before Parliament at the beginning of October, namely the Employment Rights Bill and the Equality (Race and Disability) Bill.  As part of our new free webinar series CLEAR thinking with Constantine Law, we will be hosting a webinar on 26 September 2024.  We will look at the proposed changes and the crucial steps you should take now to prepare.  To register, click: here.

In addition, laws covering the employer’s duty to prevent sexual harassment, and the fair distribution of tips will be coming into force in October. One piece of enacted legislation, Workers (Predictable Terms and Conditions) Act 2023, is being shelved as it appears that some of its principles will be incorporated into a law covering the ending of exploitative zero-hours contracts which is yet to be finalised.  

Coming into force

Fair Distribution of Tips: Coming into force on 1 October 2024, the Employment (Allocation of Tips) Act 2023 is designed to ensure that all tips are fairly distributed to staff whose good service customers have recognised through the practice of tipping. Amending the Employment Rights Act 1996, it will require employers to have a policy on tipping and to keep a record of tips. The government has issued a Code of Practice to help employers comply, which you can access here.

Sexual harassment: The Worker Protection (Amendment of Equality Act 2010) Act 2023 will come into force on 26 October 2024.  Incidents of reported sexual harassment by employees of prominent organisations including the BBC, the CBI, the Metropolitan Police, and McDonalds, have made front page news so this is something employers must take seriously. A breach of duty to ‘take reasonable steps’ to prevent sexual harassment could result in a tribunal uplifting any compensation due by 25%. For more background you can read Constantine Law Partner, Alan Lewis’s comments in People Management on how this legislation is likely to affect employers.

There are many areas for employers to act upon, from updating policies and procedures, to carrying out regular and effective training, identifying risk areas and ensuring they have clear channels for raising complaints. For further details and advice for employers, take a look at our briefing note or sign up for our free webinar on Tuesday 15 October 2024 with CL’s Eliza Nash and Ellie Rogers, in which Eliza will draw on her wealth of experience in this area: she acted in Tesfagiorgis v Aspinalls Club Ltd, the most recently reported case in this area, which emphasised that specific, targeted and regular training is essential to defend claims.  Eliza carried out bespoke training to the employer pursuant to this case, which was subsequently approved by the EHRC.

To register for the webinar, click here. 

The King’s Speech: proposed draft legislation

Employment Rights Bill

We have yet to see a draft bill (which is, if the government sticks to its proposed timing, due at the beginning of October) but the briefing notes accompanying the King’s Speech referred specifically to the following:

Zero-hours’ contracts: Labour intends to end ‘exploitative practices’ including giving everyone the right to have a contract reflecting the hours they work based on a 12-week reference period. Workers will also have the right to receive reasonable notice of any changes in their shift pattern, plus compensation for shifts cancelled or shortened.

Fire and rehire: Labour plans to introduce ‘effective remedies against abuse’ and has already introduced a new statutory Code of Practice in July. They understand the need for businesses to be able to restructure to remain viable but only if they follow due process. There would be no outright ban on fire and rehire as initially thought.

Basic day one rights: Day one rights will be introduced for all workers – and not just employees - including protection against unfair dismissal, and the right to parental leave and sick pay. Whilst there is no definite directive on how day one rights would work in practice, the recent labour party conference suggested statutory probationary periods may be the way forward.  Employers should stay tuned to our briefings for further updates.

Single Employment Status:  Labour has proposed to create a single status of worker, for employees, workers and self-employed (save for those genuinely self-employed). The new single status could give more people employment rights and hence increase the cost burden on employers.  If this change goes ahead, it could also mean those taxed as self employed could be subject to PAYE. Employers are advised to carry out audits of their workforce in advance.

Statutory Sick Pay: The lower earnings limit will be removed so that all workers benefit, and there will be no waiting period, so SSP will apply from day one of sickness.

Flexible working: This will be the default option for all workers from day one of their employment. Employers will be required to accommodate all requests as far as is reasonable, bearing in the mind the constraints and needs of their particular organisation. For more talking points on this topic, listen to Constantine Law's John Hayes and Alan Lewis's recent podcast.

Maternity discrimination: Women returning from maternity leave cannot be dismissed for six months after their return to work (unless there are specific circumstances).

Single Enforcement Body: Also known as a Fair Work Agency, this is designed to strengthen enforcement of workplace rights including the right to inspect workplaces. The body will include trade union and TUC representation.

Fair Pay Agreement: The first stage in Labour’s plans to introduce a ‘New Deal for Social Care Workers’ in line with the Resolution Foundation’s recommendations, will be to establish a Fair Pay Agreement in the sector, following a wide consultation.

Reinstating the School Support Staff Negotiating Body: This body will establish a national terms and conditions handbook, training, career progression, and fair pay for support staff.

Update trade union legislation: Designed to foster a more cooperative approach between trade unions and employers, Labour plans to address trade union representation in the gig economy, modernise the rules around the recognition of a trade union by workers, require employers to inform employees of their right to join a union, update regulations governing access to workplaces by trade unions, and update rules on blacklisting. They also intend to reverse the previous Government’s approach to minimum service levels.

The Draft Equality (Race and Disability) Bill

The Bill proposes to introduce:

• the full right to equal pay for ethnic minorities and disabled people, making it much easier for them to bring unequal pay claims.

• mandatory ethnicity and disability pay reporting for larger employers (those with 250+ employees) to help close the ethnicity and disability pay gaps.

It would appear that the proposal to introduce a single status of worker is no longer going ahead at this time. This was a proposal designed to crackdown on employers evading obligations by classing workers as temporary or agency.

In brief

Low Pay Commission

The government gave the Low Pay Commission (LPC) a new remit that requires it to take the cost of living and anticipated inflation into account when considering the National Living Wage (NLW) rate for 2025, ensuring that it does not fall below two-thirds of median hourly earnings. The remit also requires the LPC to consider how low earnings can be boosted, enabling it to recommend increases ‘above the floor’ if economic conditions allow.  In due course, the government wants to abolish the 18 – 20 year old rate so that the NLW applies to all adults over the age of 18. You can find more detail about LPC’s remit here.

Right to Switch Off

The right to switch off was included in Labour’s policy paper, Making Work Pay. Although no timeframe has been suggested for introducing it, there are suggestions that this is likely to be advisory rather that the subject of strict enforcement. It also anticipated that ACAS will be responsible for preparing guidelines for employers, along with potential penalties for non-compliance in line with other disciplinary-related breaches.

Case update

Anti-Islamic views precludes English Nationalism from being a protected characteristic

Thomas v Surrey & Borders Partnership NHS Foundation Trust

Summary: Mr Thomas, hired in a consultancy role by the Trust, brought a claim under the Equality Act for discrimination on the grounds of religion or belief following his dismissal for failing to declare an unspent conviction. Mr Thomas believed that his role was terminated because of his philosophical beliefs in English Nationalism; indeed, he was an active member of the English Democrats, a political party that believes, among other things, that there is no place in British society for Muslims or Islam itself. The tribunal held that his beliefs, which were essentially anti-Islamic, were not capable of protection under the ECHR as they were held in direct contravention of Article 17, designed to protect the rights and freedoms of others, and dismissed his claim. He appealed but the EAT upheld the original ruling. 

Breach of trust and confidence is correct test in constructive unfair dismissal

Nelson v Renfrewshire Council

Summary: Ms Nelson, a teacher, lodged a grievance about her headmaster’s ‘aggressive and intimidatory’ behaviour. The first two stages of the grievance process found that there was not enough evidence to back her claims. As a result she chose not to engage with the third stage appeal and she resigned, claiming constructive unfair dismissal. The tribunal found that, although the head’s behaviour was aggressive, it was an isolated incident and out of character. It also found that although the grievance process had not been correctly carried out, Ms Nelson was wrong not to engage in Stage 3 of the process. Accordingly, it dismissed her claim. At appeal, the tribunal ruled that the correct test should have been whether there was a breach of trust and confidence by the head and remitted the matter back to the ET.

Was dismissal a proportionate means to achieve legitimate aim?

Cairns v Royal Mail

Summary: Mr Cairns, a long-standing postman with unblemished record, suffered from a knee injury and osteoarthritis which made it increasingly difficult to carry out his postal delivery duties. He was moved to a supernumerary position indoors but there were no permanent vacancies, despite a projected merger between two delivery offices, so he was eventually dismissed on the grounds of ill-health early retirement. He brought a claim for unfair dismissal, failure to make reasonable adjustments, and disability discrimination. The tribunal dismissed his claim on the basis that the Royal Mail couldn’t continue his role indefinitely. At appeal, Mr Cairns argued that the proposed merger was only weeks away from happening and that, although the number of indoor roles would be reduced, he would be eligible to be considered by dint of his long service. The EAT agreed and remitted the matter back to the ET to consider whether the dismissal was a proportionate means of achieving a legitimate aim.

Compromise agreement waiver precluded future claims

Clifford v IBM UK Ltd

Summary: Following a four-year period of ill-health which precluded him from working, Mr Clifford lodged a grievance regarding, among other things, IBM’s failure to transition him to their Disability Plan. In 2013 he entered into a compromise agreement in which he was transferred to the Disability Plan and would receive disability salary payments. However, any increase in these payments were deemed to be discretionary.  Under the terms of the agreement, Mr Clifford waived his right to bring various specified claims including disability discrimination, but an exception was made in respect of matters unconnected to the grievance, its appeal, or arising from his transfer to the Disability Plan. Mr Clifford brought a claim for disability discrimination because, since moving onto the Plan, he had not received annual salary reviews or any increases in his payments. The ET dismissed his claims for disability discrimination as the compromise agreement he had signed explicitly excluded them. At appeal the EAT agreed with the ET, confirming that future claims had been precluded by the compromise agreement.

This is another case (see Bathgate v Technip UK) that demonstrates why clarity in settlement agreements is crucial and why it is worth employers investing in having each individual agreement drafted by professional advisers. Contact us should you require a settlement drafted or for any advice on termination.