CL Quarterly Employment Bulletin - Issue 1

Welcome to Constantine Law’s first Quarterly Employment Bulletin (CL QEB). We hope you find our first bulletin a wealth of useful information and reassurance that we are here to support you during 2023 and beyond.

We start with a brief look at what we may expect in legislation as the year progresses and what this means for businesses.

In our Top Picks section, we have selected topics that we consider will be of relevance to our readers as 2023 gets underway.

We finish with our case update to summarise and illustrate people issues of importance to every business.

What will 2023 hold for employers?

Legislative programme

Despite there being little sign of the Employment Bill being resurrected, several of the proposed legislative changes it contained are already progressing through Parliament in the form of Private Member’s Bills (PMBs). It is unusual to see so many PMBs receiving government backing but there are currently six relevant to employers that have reached the report stage and are currently on track to hit the statute books in 2023:

1. Employment Relations (Flexible Working) Bill

Since flexible working became the default position during the pandemic, many employees are no longer prepared to return to the workplace full time. This demand for continued flexibility has also had an effect on organisations’ ability to recruit and has led many employers to rethink the workplace with the introduction of hybrid working as standard.

As an added layer of flexibility in the workplace if this Bill becomes law, employees will have the right to request flexible working from day one with two requests permitted in a 12-month period. The grounds for refusing a request are likely to remain unchanged however, given the new working patterns established as a result of the effects of the pandemic, it is likely to be more difficult to justify a refusal. We advise that employers should invest in training their managers in handling these requests so that if a request is refused it can be justifiably rejected.

2. Worker Protection (Amendment of Equality Act 2010) Bill

Employers will have a legal duty to take active (and reasonable) steps to ensure that their employees are protected from sexual harassment within the workplace. This duty will also extend to the protecting employees from harassment by third parties such as suppliers or customers.

3. Protection from Redundancy (Pregnancy & Family Leave) Bill

A woman will be entitled to enhanced protection from redundancy from the point at which she informs her employer that she is pregnant until 18 months after the birth. This gives mothers on a year’s maternity leave another six months’ protection. Adoptive parents and those returning from shared parental leave will also get a further six months on their return to work (but not in advance of taking leave).

4. Neonatal Care (Leave & Pay) Bill

This will allow both parents up to 12 weeks’ paid leave in the event of premature birth or if they have a sick baby. This is in addition to parents’ statutory maternity and paternity rights.

5. Carer’s Leave Bill

Employees who look after those with long term care needs will be entitled to one week’s unpaid leave per year in addition to their usual holiday allocation. This right will be available from day one of their employment and they will not be obliged to evidence how that leave is used.

6. Employment (Allocation of Tips) Bill

This is designed to ensure that staff receive the tips they are given rather than a proportion being withheld for whatever reason.

Employers are therefore reminded to table a review of their polices in view of the forthcoming sea of changes to flexible working, redundancy protections, neonatal care and carer’s leave.

Top Picks

Holiday Pay

With the recent Supreme Court ruling that all employees, including those only working part of the year (as opposed to part-time), are entitled to 5.6 weeks’ paid holiday (Harpur Trust v Brazel), another case that is likely to be of particular interest is that of Gary Smith, who has been given leave by the Court of Appeal to pursue his claim for unpaid holiday pay against Pimlico Plumbers, potentially for the six years he worked for the company. The Supreme Court is also expected to rule in early 2023 on a Northern Ireland case involving unlawful deductions from pay and underpayment of holiday pay claims where the claim was not necessarily broken by a gap of more than three months – a significant departure from the EAT ruling in Bear v Scotland. If the Supreme Court rules in favour of the respondents, all UK employers (and not just those in Northern Ireland) may face historic holiday pay claims dating back years and not just weeks. The judgment is expected in the spring. Although a ruling in favour of the claimants will not impact the law in England and Wales it is, nevertheless, likely to be persuasive, adding additional weight to other potential claims for unpaid holiday pay.

Following the Harpur Trust v Brazel ruling, the Government has issued a consultation to garner interested parties’ views on calculating holiday entitlement for part-year and irregular hours. The consultation runs until 9 March 2023 and can be accessed here: Calculating holiday entitlement for part-year and irregular hours workers. The paper notes that the consultation is technical in nature so it is important that employers affected by the ruling take advantage of the opportunity to express their views.

Retained EU Law (Revocation and Reform Bill)

This Bill introduces a cut-off date (the so-called ‘sunset date’) for the retention of all EU-derived law currently retained within the European Union (Withdrawal) Act 2018). Government departments have until 31 December 2023 to decide which elements of retained EU law they want to incorporate into UK law. There will be a three-year transition period during which those chosen laws and regulations can be absorbed into domestic legislation. Given the extent of EU-derived employment-related law and regulations, the BEIS will have its work cut out to identify what they want to keep – anything that does not make the cut will be consigned to the archives. This will have a major effect on businesses so we will be keeping a close watch on how this develops.

Financial Services: Senior Manager & Certification Regime

The government has issued a Call for Evidence on the legislative framework that supports the SMCR on the basis that it is due for reform. This is likely to be launched in early 2023 and, according to the Chancellor’s statement “will be an information gathering exercise to garner views on the regime’s effectiveness, scope and proportionality, and to seek views on potential improvements and reforms.” The FCA and PRA will also review the regulatory framework within which it sits.

Is a four-day week the future?

Not to be confused with flexible working, the prospect of a four-day week becoming the norm is alive and well following a (largely) positive response from businesses taking part in a pilot project during 2022. The pilot schemes saw employees working 32 hours over 4 days with no loss of pay. Generally, it was considered that there were higher performance outputs, a better work life balance and, overall, a positive effect on health and wellbeing.

Practical Tip: Employers looking to trial or implement such new working practices should ensure that their contractual documentation and handbooks are updated to reflect any such changes and to state as such if they are only temporary measures.

Coronation bank holiday announced

An additional day’s holiday has been announced on Monday 8th May 2023 to celebrate the coronation of His Majesty King Charles III. Taking a bank holiday as paid leave is not an automatic entitlement so it is worth employers double checking if their employees’ employment contracts entitles them to additional paid leave. As with the additional day’s holiday for last year’s Platinum Jubilee, it is worth bearing in mind that employers not inclined to grant an extra day of paid leave do run the risk of reputational damage.

Fire and re-hire: the latest

After last year’s furore caused by PO Ferries’ decision to dismiss 800 employees, the Government announced its intention to introduce a Code of Practice governing how employers could alter employees’ terms and conditions. The Code has now been drafted and is the subject of a recently launched consultation that will run until 18 April. Employers, along with other interested parties, are invited to submit their views. You can access the consultation document here.

Case update

Employment Status

The importance for employers to be very clear about the employment status of those working for them was illustrated in 2018 when the Supreme Court ruled that Gary Smith (see above) was a worker and not self-employed as maintained by Pimlico Plumbers, a ruling that paved the way for him to pursue additional claims, including unpaid holiday pay. We outline other, recent cases that underline this point:

In Richards v Waterfields Homes, the claimant won his case to be recognised as an employee rather than self-employed after the EAT ruled that, despite the intentions of the parties, there was only one indicator that the claimant was self-employed, namely the use of the CIS scheme to pay him. Every other aspect of the relationship between claimant and respondent pointed to the former being an employee.

HMRC v Professional Game Match Officials is another case to keep under review. Although this is strictly speaking a tax rather than employment tribunal case, it does add to the debate about the correct determination of employment status. In essence HMRC claimed that match referees were employees of their trade body, the PGMOL, rather than self-employed, a claim that was upheld by both the First Tier and the Upper Tier Tribunals as well as the Court of Appeal. The end of this long running dispute is now in sight as PGMOL has been given leave to appeal to the Supreme Court. The decision, when it arrives, will provide further clarification on mutuality of obligation, a key tenet in determining employment status.

Grievance and constructive unfair dismissal

Garrod v Riverstone Management is a good example of how a grievance can quickly turn litigious. In this case an employee raised a grievance in which she accused her employer of sex discrimination and victimisation following her return from maternity leave. She was invited to a ‘without prejudice’ meeting in order to discuss her case during which an offer was made to terminate her employment which she refused. Her grievance was subsequently rejected, following which she resigned, claiming constructive unfair dismissal. At the ET, she raised the without prejudice discussion as part of her claim, denying that the parties were in dispute at this juncture, while claiming that the settlement offered during that discussion amounted to discrimination. The tribunal agreed with the respondent: the without prejudice meeting was brought about due to an existing dispute between the parties and, as such, should not form part of Ms Garrod’s claim. The Tribunal also examined – and dismissed - Ms Garrod’s claim that the without prejudice rule should be suspended as the settlement offer was evidence of ‘unambiguous impropriety’.

Practical Tip: When conducting without prejudice discussions employers must act fairly and properly otherwise the without prejudice status risks being challenged. It is advisable to take legal advice on conducting the discussions rather than simply having the conversation; any such advice received from a lawyer would automatically be covered by legal professional privilege but an offer made to the Claimant would still need to qualify as being without prejudice and care should be taken to ensure this.

Redundancy

With widespread talk of recession, employers may be considering embarking on a restructuring programme involving redundancies. A recent case outlined the importance of following the process correctly to avoid facing a claim of unfair dismissal. In Mogane v Bradford Teaching Hospitals NHS Foundation Trust, the claimant, Ms Mogane was found to have been unfairly selected for redundancy on the premise that her fixed-term contract ended before that of a colleague. No selection criteria was therefore applied as she was considered, wrongly, to be in a unique pool of one. Ms Mogane was made redundant after attempts to find her alternative employment failed. She claimed unfair dismissal which was rejected by the ET. Following her appeal, the EAT ruled that the process followed by the Trust was not fair, given that there was one other employee who also fitted the selection criteria but was not chosen simply because her contract ended at a later date. The Trust had chosen Ms Mogane for redundancy without any prior consultation and on the sole ground that her contract was about to end, therefore she was found to have been unfairly dismissed.

Practical tip: there is a specific legal process to be followed when embarking on a redundancy programme. Even if only a few people are to be made redundant, a consultation must be held with each individual. A pool of one can be fair but should not be considered without consultation where another employee could be appropriately placed in the pool. Failure to follow a fair process is likely to end in a claim.

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