Happy new year and welcome to our first newsletter of 2025. The end of last year was dominated by the Employment Rights Bill and the 50 plus pages of amendments that were brought forward in November. The Bill continues to dominate employment headlines and appears to have got wrapped up in conversations about the wider economy and the government’s ‘go for growth’ agenda.
Employment Rights Bill
The Bill (with its attendant amendments) is still working its way through Parliament having reached the Report stage after its second reading. The Business & Trade Select Committee’s evidence-gathering into the Bill and whether it will help to achieve the government’s growth objectives (among other things) is also drawing to a close. Constantine Law partner, Alan Lewis, commented on what the Bill is likely to mean for employers in People Management, and you can read his comments here. It is anticipated that the Bill will receive Royal Assent towards the end of the year.
Basic day one rights: One of the more controversial rights to be introduced for all workers, namely protection against unfair dismissal from day one, continues (understandably) to concern employers although the government has said it won’t be introduced until Autumn 2026 at the earliest. Nonetheless, until the ‘initial period of employment’, currently set out as between three and nine months, is clarified, uncertainty will continue.
Tribunal limits: one of the tabled amendments proposes extending the time limit for employees to bring a tribunal claim from three months to six. Although the longer limit will give employers more time to settle grievances internally, it may also lead to more claims being made.
Fire and Hire
Since 20 January 2025, tribunals have been able to apply an uplift of 25% to any compensation award if an employer has been found not to have substantially departed from good practice as laid out in the government’s statutory Code of Practice on dismissal and re-engagement (colloquially known as Fire and Hire). Although following the Code is not a statutory obligation, employers are expected to follow due process when negotiating a change of contracts with employees.
Increase in the NLW and NICs
Increases to the national living wage will take effect from 1 April 2025 and are as follows:
1. Age 21 and over - £12.21 (up from £11.44)
2. 18 – 20 - £10.00 (up from £8.60)
3. 16 – 17 and apprentices - £7.55 (up from £6.40)
As all employers will be very aware, from April, NICs will also be increasing to 15%, with a starting threshold of £5,000, reduced from £9,100. Some of the financial pain for eligible small businesses will be reduced as the Employment Allowance increases to £10,500 from £5,000.
Duty to Prevent Sexual Harassment
The new duty to prevent sexual harassment came into effect on 26 October 2024. This legislation signifies a cultural shift, compelling employers to adopt a proactive stance rather than a reactive one when it comes to harassment – and it applies universally to all types and sizes of organisation. Employers must take reasonable steps to prevent harassment in the workplace, which includes conducting thorough risk assessments to identify specific vulnerabilities unique to their environment. Employers who fail to meet the requirements set out by this new legislation may face increased compensation claims from affected employees. To help employers navigate this new area of law, Eliza Nash and Ellie Rogers of Constantine Law have explored this in detail in their Employment Law podcast and you can link to the episode here.
In other, related news, a Private Member’s Bill has been put before Parliament intended to bring prevention of sexual harassment (as set out in the Worker Protection (Amendment of Equality Act 2010) Act) within the scope of employers’ Health & Safety obligations. If such a bill was to succeed, any employer found in breach would be subject to an HSE investigation and potentially face criminal charges and unlimited fines. Private Members Bill rarely reach the statute books, but we will keep a close eye on the progress of this one.
Case law
Employer’s limited financial resources not relevant to determining size of award
Summary: Ms Shakil was an accountant / bookkeeper for Samsons Limited, a property developer. Six months after starting work, she informed her employer that she was pregnant after calling to say she was suffering with morning sickness and needed to take sick leave. The day after, her employer reduced her hours to two days a week. Six months later, the day before she started maternity leave, she was selected for redundancy and dismissed shortly afterwards. Ms Shakil claimed pregnancy discrimination, but her employer denied knowing she was pregnant and maintained that she was chosen for redundancy due to performance and conduct issues. The ET upheld her claim and awarded her £5000 for injury to feeling which was on the lower Vento bend. She challenged the injury to feelings award in general terms on the basis it was outside the reasonable range of awards a tribunal might make. At appeal, the EAT described the analysis of the ET as ‘wholly inadequate’, not least as it appeared to take into account the limited financial resources of the employer when deciding the award, which the EAT confirmed was not relevant. The EAT remitted the matter to a different tribunal to reassess the award – and to consider an application to claim aggravated damages – as the decision by the original one was ‘totally flawed.’
Objection to transfer under TUPE? Is an employee’s claim the responsibility of transferor or transferee?
Summary: This case considered whether it was the transferor’s or the transferee’s responsibility for dismissing an employee who objected to a transfer of employment under TUPE, reg 4 (7). London bus driver, Mr De Marchi, objected to his employment being transferred under TUPE from London Busways to Abellio London after the latter won the contract for the bus route on which he was employed, because his commute would increase from 15 minutes to 1 hour. LUB refused to make him redundant and instead offered him three options: transfer to Abellio under TUPE; stay with London Busways on an amended contract; or resign. Mr De Marchi resigned and brought a TUPE-related claim and a claim for unfair dismissal. The tribunal ruled that London Busways had dismissed Mr De Marchi because he objected to the transfer thus preventing his employment being transferred to Abellio. London Busways appealed.
At appeal, the EAT considered whether an employee who objects to their transfer to the transferee and wishes to remain employed by the transferor, remains an employee of the latter after the transfer takes place until they are either dismissed or ‘elects to treat the contract as having been terminated.’ In this case, London Busways was considered to have dismissed Mr De Marchi. Any business transferring contracts of employment under TUPE, should not assume that it will be the transferee which will have to deal with any employees who object to be transferred or who exercise their right to resign.
Fair dismissal follows irretrievable breakdown between employer and employee
Summary: This case highlights the importance of trust and confidence in the employment relationship. Ms Alexis, an administrator / receptionist at the Westminster Drug Project (WDP) and two colleagues were invited to apply for two posts following a restructure. Ms Alexis, who has dyslexia, asked for the interview questions to be supplied 24 hours in advance of her interview. WDP declined but, instead, the chair of the interview panel sent them to her fifteen minutes beforehand but failed to tell her that she was doing so. As a result Ms Alexis only picked up one set of questions relating to one interview rather than both. After failing the interview, Ms Alexis raised a grievance on the basis she had not been sent the questions 24 hours in advance as she had originally requested.
After she rejected the outcome of the grievance and the following appeal, both of which were broadly favourable to her, a meeting was held with an HR consultant who concluded that the relationship between her and her employer had broken down irretrievably. As such she was given 11 weeks’ notice. She claimed unfair dismissal which was rejected by the tribunal. She appealed on the basis of her length of service and that the alternative of a warning was not considered. At appeal, the EAT upheld the original finding that there was no alternative to dismissal given that trust and confidence between her and her employer had broken down.
Harassment claim based on criticism of strong accent upheld
Summary: This case concerned whether criticism of a claimant’s accent amounted to harassment and victimisation, if it was part of their ethnic identity. Ms Carozzi, a Brazilian national, was employed by the University of Hertfordshire in their marketing department. Her original six-month probationary period was extended twice; before completing the second extension, she resigned. She brought claims for constructive dismissal, direct race discrimination, direct religious discrimination, harassment, and victimisation. The original tribunal had to consider 36 separate complaints of detrimental treatment, making it difficult to focus on the core issues which were ‘obscured because so many subsidiary allegations are made.’ At tribunal, Ms Carozzi’s claims were not upheld but she was given leave to appeal.
Her appeal was allowed on three grounds: the treatment of the complaint of harassment concerning her accent; a challenge to the dismissal of a complaint of victimisation; and an allegation of procedural bias by the tribunal. The EAT upheld the first two grounds of appeal, namely harassment and victimisation and remitted both back to a differently constituted ET. This was largely based on the fact that the Employment Judge’s initial view of the matter was so firmly held that it was considered he would be unable to be objective if the case was to come before him again.
We have prepared a a summary of ‘What’s on the horizon in 2025’ in all matters employment law related. You can access it here.