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Welcome to our Spring / Summer edition of CL Q.E.B

STOP Press

‘Sunset’ date for EU law abandoned

The government has just announced that it is abandoning the cut-off date (the so-called ‘sunset date’) by which any EU law, not expressly retained by statute, will automatically be lost. This means that EU law will remain in place unless it is listed in the Bill to be repealed. Although this is welcome news (given the amount of employment legislation derived from EU law) changes are already being proposed to the Working Time Regulations and TUPE (see below).

Proposed changes to WTR and TUPE

Working Time Regulations: the government proposes to create just one holiday entitlement rather than having ‘normal’ and ‘additional’ leave (which may, of course, impact how holiday pay is calculated). There is also a proposal to allow ‘rolled-up’ holiday, and to no longer require employers to keep a record of working hours under the WTR.

TUPE: businesses with fewer than 50 employees and fewer than 10 transferees will not be required to consult. At present, only businesses with 10 employees or fewer are exempt from the need to consult. In reality, this exemption extension will not apply if the whole business is being sold and all the employees transferred.

Non-compete clauses

In another recent announcement, the government is proposing reducing the length of time non-compete clauses remain valid in post-termination restrictive covenants to three months. This time limit will not apply to non-solicitation or confidentiality clauses.

No legislative timetable has been set but employers are advised to have their contracts reviewed early where the non-compete clauses are important to them.

Talking point: Behaviour in the workplace

The dismissal of Tony Danker, former head of the CBI, and the report by Adam Tolley KC into complaints of bullying by Dominic Raab, have dominated the headlines for weeks. Both men have strongly defended their positions, with Tony Danker expressing particular dismay that he was not asked for his side of the story as he was simply dismissed without any disciplinary hearing. However, as he was initially permitted to continue working after the complaint was made, there is a valid question as to why he was not suspended rather than dismissed. Dominic Raab was equally bullish given that Adam Tolley only upheld two of the complaints against him. Both men recognised they may have made others feel “unintentionally uncomfortable”.

There are several issues here for HR teams to unpick.

In the case of Mr Danker, why was there no disciplinary hearing? Would suspension prior to a full investigation not have been fairer, not least to help create more robust policies against which such conduct can be judged in future?

Dominic Raab resigned because he said he would do so if the Tolley Report upheld any of the claims against him. But again, the nuanced tone of the report reflected the problem with identifying bullying – there is no statutory definition so, to an extent, there is always an element of subjectivity in deciding whether certain behaviours amount to bullying or, as Mr Raab would maintain, robust criticism. Nonetheless, what these unfortunate episodes reveal is the criticality of having clear policies in place that leave no room for doubt about what constitutes appropriate behaviour in the workplace – and that applies throughout the organisation, regardless of seniority. Likewise, organisations must be seen to be even-handed and impartial throughout. Additionally, by following due process, valuable lessons can be learnt to help refine both policies and procedures. We return to the subject of keeping policies under regular review further below.

Focus on: Disability in the workplace and the return to work

Helping those who have been on long term sickness absence and the less able-bodied to enter, or return, to the workplace featured in the Chancellor’s spring budget. This objective has been further bolstered by the recent publication of the government’s Health and Disability White Paper which outlines three ways it seeks to achieve this:

1. Improving employment support for disabled people and those with health conditions.

2. Ensuring people can access the right support at the right time.

3. Reforming the benefits system with the focus on what people can, rather than cannot, do.

Acknowledging that many employers would need help in adapting the workplace to make it more inclusive for those with disabilities, the Chancellor announced a pilot study, offering financial subsidies to small and medium-sized employers to encourage them to invest in occupational health services. If successful, it will be rolled out more widely. An enhanced ‘Access to Work’ package was also announced.

The proposals have had mixed reception: many HR departments are already under strain, trying to keep pace with new legislation and new ways of working, and may not feel this is a priority for them. Others view it as an essential way to keep otherwise productive and loyal employees. Ultimately, the level of government support and ongoing commitment will prove decisive. In the meantime, employers should review their sickness absence, and equality, diversity and inclusion policies to ensure that they remain legally compliant.

Top Picks

Homework for HR: Are your policies keeping up with legislation?

A raft of new legislation (see CL QEB Q1) – with more in the pipeline – plus wholesale changes to the way we work, has meant that HR teams are being kept busier than usual keeping their policies current. Ensuring that you have covered all bases is imperative if you are to avoid claims and, potentially, a trip to the tribunal. You also need to check that where your policies overlap, they are consistent rather than contradictory. We summarise below the various developments that need to be incorporated into a policy:

1. Flexible working

At the moment, an employee with at least 26 weeks continuous service has the right to ask to work flexibly (but must outline what impact their request might have on their employer) and employers are obliged to respond within three months. If the request is refused, employees have to wait another 12 months before asking again. The Employee Relations (Flexible Working) Bill (which is in the final stages of the Parliamentary process) will, if passed, no longer require employees to explain the impact of their request; it will allow up to two flexible working requests per year; require employers to consult with the employee before refusing a request; and reduce the response time from three to two months.

2. Hybrid working

There is no statutory right to hybrid working and it must not be confused, or conflated, with flexible working. Employers are strongly advised to have a clear hybrid working policy, setting out the parameters for granting a request (for instance which roles are not suitable and why, and if different arrangements apply to different seniority levels). Any policy must also set out the right to withdraw the option in the light of productivity/performance issues or health and well-being issues. Unless employers intend to change their employment contracts, policies should make it clear that hybrid working is not a contractual right.

3. Sexual harassment

The Worker Protection (Amendment of Equality Act 2010) is also in the final stages of its progress. This will place the onus on employers to take positive steps to ensure their employees are protected from sexual harassment in the workplace, including from third parties (such as customers and suppliers), and an impose a compensation uplift where employers are found to have breached their duty. It is imperative that employers review and update their policies on sexual discrimination, bullying and harassment in the light of this new legislation.

4. Menopause

Although the government does not propose including the menopause as a protected characteristic under the Equality Act, it does recommend a number of actions employers should take to support women going through the menopause such as offering flexible working and making workplace adjustments. We are recommending that employers consider drafting a menopause policy, not least as tribunals are seeing more claims from menopausal women citing discrimination and disability.

5. Predictable working hours

The Workers (Predictable Terms and Conditions) Bill, if passed, will give agency workers and workers on zero hours contracts the right to request a predictable work pattern after 26 weeks of service (this would make this option less appealing to employers who rely on this model for its flexibility). On the current timetable it does not look as if the Bill will become law this year but employers would do well to draft a policy outlining the process for making requests and for appealing a decision. Employers also need to consider if any contractual changes need to be made.

6. Use of AI / ChatGPT

Most of us are still getting to grips with what ChatGPT is and what it can do. However, as most educational establishments have discovered, drafting guidance on what is and isn’t acceptable use of this technology is important. Any policy of this nature will have to be kept under regular review as the technology will continue to evolve, but as a minimum, it could include when ChatGPT (and its equivalents) can, and cannot, be used; intellectual property considerations; and privacy and confidentiality as a minimum.

AI and the implications for the workplace

The government has published its white paper on its ‘proposals for implementing a proportionate, future-proof and pro-innovation framework for regulating AI’, which is open for consultation until 21 June 2023. It is proposing that relevant, existing regulators such as the ICO, HSE, EHRC and CMA should ‘come up with tailored, context-specific approaches that suit the way AI is being used in their sectors.’ This is being described as a ‘pro-innovation’ approach that will be more adaptable and flexible than ‘heavy-handed legislation.’ AI is already being deployed in the workplace in recruitment, remote monitoring and performance analysis, among others, and the challenge for HR teams is to harness this technology effectively without losing the human touch. This is particularly demonstrated by using ChatGPT to draft policies (including one for its own use – see above) as explored in a recent article in People Management. It may save time but it still needs human oversight.

Own goal for HMRC as Gary Lineker wins IR35 appeal

HMRC contacted Gary Lineker six years ago, requesting a breakdown of the income generated by the partnership that he had formed with his then wife. HMRC claimed that Mr Lineker should have been classed as an employee and therefore within IR35 legislation resulting in a £4.9m tax bill. Mr Lineker appealed and the First Tier-Tribunal (“FTT”) finally handed down its ruling in March this year. The FTT agreed with Mr Lineker that, as he signed his contracts with both organisations himself, rather than via an intermediary, IR35 did not apply. This is the first time the FTT has been asked to rule on whether there was a direct contract between an organisation and an individual. Partnerships are considered to be an intermediary body under IR35 legislation, but the drafting did not take into account a situation where a partner who was delivering the service, was directly responsible for signing the contract.

Case update

McQueen v General Optical Council- Disability and Occupational health

A recent disability discrimination case neatly demonstrates the importance of occupational health in helping an employer determine whether or not an employee’s behaviour is directly related to their disability or health condition. Mr McQueen, a registration officer with the General Optical Council (GOC), suffered from partial hearing loss, Asperger’s Syndrome, and dyslexia. During the course of his employment, his behaviour with colleagues was consistently disruptive and aggressive and he was particularly difficult when being asked to undertake tasks or when the quality of his work was criticised.

This resulted in two disciplinary charges, following which he brought a claim for disability discrimination. The original tribunal heard that the GOC had made various adjustments to accommodate his disabilities and had provided occupational health support, including psychological and psychiatric assessments. It concluded that Mr McQueen’s disruptive behaviour had not been caused by his disabilities but could be attributed to habit and a short temper. Mr McQueen appealed but the EAT upheld the original decision. This is a useful decision for employers as it underlines the importance of undertaking workplace adjustments to accommodate those with disabilities as well as deploying occupational health. If employers have taken all the necessary steps to support disabled employees in their roles, they will be much better prepared to defend a potential disability claim.

Bradley v Cultureshift Communications- Long covid and reasonable adjustments

Most people are now aware that long covid is a recognised medical condition. A recent tribunal decision has also confirmed that it is a disability under the Equality Act 2010. After contracting Covid-19 Mr Bradley experienced significant symptoms of long covid including lethargy, brain fog and depression. Although he returned to work, the fatigue and lethargy meant that he was unable to complete a full day’s work and he was eventually signed off sick. Following his eventual dismissal, he claimed unfair dismissal and disability discrimination and the tribunal’s first task was to assess if long covid was a disability.

The respondent claimed that Mr Bradley’s exercise regime and his starting of a new business indicated that he did not suffer from a disability. By contrast, the tribunal found that his exercise regime, which was encouraged by his doctor to counteract the effects of long covid, was considerably reduced from that which he pursued when fully fit. Likewise, his ability to concentrate for extended periods remained considerably impaired compared to his former position. The tribunal found that his inability to carry out normal activities amounted to a disability. As Constantine Law partner, Alan Lewis, noted in a recent article in People Management, “what you have to do is look at what the individual can do when suffering with the impairment as compared to what he could do without the impairment.” This is unlikely to be the last case involving impairment caused by long covid and employers are advised to consider making adjustments to accommodate employees who are still struggling with the after effects of the virus.

Boydell v NZP Ltd and others - Restrictive covenants

As any HR manager knows, drafting an enforceable restrictive covenant requires care. This was amply demonstrated in the recent case of Boydell v NZP Ltd and others. Dr Boydell’s contract of employment contained a 12-month post-termination restriction, which prevented him from working for a competitor company within his specialised field. When he resigned to take up a position at a competitor pharmaceutical business, his previous employer, NZP (and its holding company) sought an injunction to enforce the non-complete clauses in his contract, which included a restriction on working for any competitors of NZP and its group companies.

In the High Court, the judge ruled that the restrictions should only apply to the NZP specialist activities and not to the more general activities carried out by other group companies. Dr Boydell, believing that the restriction was still too wide, appealed. The Court of Appeal agreed with the High Court’s decision to grant an interim injunction on the basis of the revised clause.

Including restrictive covenants in employment contracts must be appropriately tailored. In this case, Dr Boydell’s specialist discipline meant that a post-termination restriction was justifiable and enforceable. If his skillset had been of a more general nature, or his employer involved in more general activities, it would have been hard to argue that imposing such restrictions was in the company’s genuine legitimate interest.

In brief

Pay gap transparency

Five years after its introduction, it appears that there has been little improvement in the gender pay gap figures, indeed the median pay gap appears to have worsened by 0.3%. Currently, there is no requirement for employers to take active steps to improve their pay gap other than reporting it. In contrast, the EU is introducing legislation that will compel employers to take active steps to reduce the pay gap, something that will impact employers with European operations.

Given that gender pay gap reporting appears to have done little to narrow the gap, it is perhaps not surprising that there is little appetite in government for introducing mandatory ethnic pay gap reporting despite external pressure from bodies including the Commission on Race and Ethnic Disparities and the Women and Equalities Committee. Nonetheless, government is keen to encourage voluntary reporting while acknowledging the inherent difficulties of gathering accurate data, not least as employees may not wish to engage unless such requests are carefully managed. Given that EDI is becoming increasingly important, we would recommend that employers consider how best to collect, and act on, ethnic pay data.

Relevant increases from 6th April 2023:

Vento Bands increase

The levels of financial compensation for ‘injury to feelings’ awards in cases of discrimination increased as follows:

Lower band: £1,100 to £11,200 (less serious cases)

Middle band: £11,200 to £33,700 (those that do not merit a higher award)

Upper band: £33,700 to £56,200 (the most serious cases)

For exceptionally serious cases where there is no limit on injury to feelings awards, the upper band could exceed £56,200. These types of awards are very rare.

Maximum statutory pay for a week is £643.

Maximum compensatory award for unfair dismissal is £105,707*

The maximum compensatory award applies to most unfair dismissal claims, but there is no maximum if the dismissal qualifies as automatically unfair (such as for health and safety reasons or whistleblowing)

* The maximum compensatory award has increased, but as stated above is also limited to a payment of 52 weeks’ pay, if that is lower than the maximum.


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