Welcome to the Summer Employment Law Update. In our employment and HR updates, Tom Evans and Melissa Scott outline recent cases, updates to the law and other Employment and HR news. If you want to ensure you don’t miss the latest in Employment and HR you can subscribe to our Employment Law Update Newsletter.
LEGISLATIVE DEVELOPMENTS
APRIL 2024: EMPLOYMENT LAW CHANGES
The first 6-months of 2024 have seen a significant number of employment law changes. On 6 April 2024, several of these came into force. These changes expanded rights for employees around paternity leave, flexible working, carer’s leave and protection from redundancy during parental leave. These changes are summarised below:
Paternity leave
- Employees are now able to take their two-week paternity leave entitlement as two separate blocks of one week (rather than having to take just one week in total or two consecutive weeks).
- Employees only need to give 28 days’ notice of their intention to take paternity leave (reduced from the previous position that required notice to be given 15 weeks before the expected week of childbirth.
- Employees are now able to take paternity leave at any time in the 52 weeks after birth (rather than having to take leave in the 56 days following birth).
Flexible working
- Employees can now make two (rather than one) flexible working requests in any 12-month period.
- Flexible working requests now have to be dealt with by employers within two (rather than three) months of receipt of a request if no extension is agreed.
- Employers are now not able to refuse a request until they have consulted with the employee first.
- Employers must now explain the reasons for denying a flexible working request. However, the list of reasons an employers can use to deny requests remains the same:
- the burden of additional costs
- an inability to reorganise work amongst existing staff
- an inability to recruit additional staff
- a detrimental impact on quality
- a detrimental impact on performance
- a detrimental effect on ability to meet customer demand
- insufficient work available for the periods the employee proposes to work
- planned structural changes to the employer’s business
- Employees will no longer, in their application, have to explain what the impact of their request will have.
A revised statutory Acas Code of Practice on requests for flexible working is also now in force and should be followed by employers when dealing with flexible working requests.
Carer’s Leave Policy
- The Carer’s Leave Regulations 2024 came into force on 6 April 2024.
- The new statutory right allows eligible employees to apply for up to one week of unpaid carer’s leave in any 12-month period.
Extension of redundancy protection for family-related leave (Pregnancy and Maternity leave, Adoption leave, Shared parental leave)
- Prior to 6 April 2024, employees who were on Maternity leave, Adoption leave, or Shared parental leave were entitled to be offered any suitable alternative vacancies before being made redundant and in priority to other employees not on such leave (i.e. they had a first right of refusal in such circumstances).
- From 6 April 2024, this protection has been extended, to also cover a protected period of pregnancy and a period after the parent returns to work. The period of protection will last for 18 months after the date of childbirth/adoption.
Employers need to ensure that their current policies reflect the new legislative changes. To ensure your policies are up to date and compliant with the latest legal requirements, we encourage you to consult with our experienced Employment and HR team at DTM Legal. We can provide guidance in navigating these changes effectively, ensuring a timely and cost-effective update to your existing policies.
To discuss updating your policies or for more information on our Employment Law and HR services, please contact Tom Evans at 0151 230 1217 / 07595 280726 or email tom.evans@dtmlegal.com .
NEW “FIRE AND REHIRE” CODE OF PRACTICE
The first statutory code of practice on dismissal and re-engagement, frequently referred to as fire and rehire, will come into force on 18 July 2024, unless repealed by a new government after the general election.
During the wash-up period (the last days of a parliament before dissolution, ahead of a general election), a number of bills were progressed. The Code of Practice (Dismissal and Re-engagement) Order 2024 was one of the bills to be passed for England, Wales and Scotland.
The bill has the effect of making the code of practice in this area statutory. The code’s aim is to ensure that employees are treated fairly and properly consulted, when an employer wishes to change their terms and conditions. The code sets out how employers should act when seeking to alter employees’ terms and conditions.
Under the code, employers will need to ensure that they explore alternatives to dismissal and re-engagement and have consultations with employees and/or trade unions. The code goes on to recommend that if attempts at reaching an agreement between employees and/or their representatives fail, employers should contact Acas to assist in negotiations.
The code stipulates that employers should not threaten dismissal in order to pressure employees into accepting new terms. Employer should also not raise the prospect of dismissal unreasonably early or threaten dismissal where it is not envisaged.
Under the new statutory code, employment tribunals will have the power to apply an uplift of up to 25% of an employee’s compensation if an employer is found to have failed to comply with the code.
There have been several criticisms of the code, which state that the code does not go far enough to protect employees. Labour have described the code as “inadequate” and, in the event of their success in the election, they will replace the current code with a “strengthened code of practice”.
NEWS
THE GENERAL ELECTION 2024: Proposed Employment Law Reforms
The next UK general election is due to take place on 4 July 2024. Each political party have presented differing employment law reforms within their manifestos. Please find a summary below of what each party’s proposals are.
Labour’s key proposed changes include:
Reforming employment status
- Currently individuals are classified as either employees, workers or self-employed. Each of these groups has differing levels of protection and rights under employment law.
- Labour have indicated that they would look to introduce a simpler two category framework for employment status whereby individuals are classified as either workers or genuinely self-employed for the purpose of workplace rights and protections.
- Under the new two category framework for employment status, all workers would be afforded the same basic employment rights and protections (e.g. sick pay, holiday pay, parental leave and protection against unfair dismissal).
- Currently, employees have more rights and protections than workers, Labour’s proposal would lead workers to gain significant additional employment rights. Which would in turn likely lead to an increase in Employment Tribunal claims.
Increasing ‘Day 1’ Employment Law Rights
- Labour’s intention is to make the right not to be unfairly dismissed a day one right (save for within a “probationary period with fair and transparent rules and processes”). Currently, an employee needs to have been continuously employed for a period of 2 years prior to bringing a claim of unfair dismissal. This would be a major change leading to a far greater number of people having the right to bring an unfair dismissal claim, particularly with the right to bring an unfair dismissal claim also being extended to people currently classified as workers.
- Labour intend to remove the three-day waiting period before statutory sick pay (SSP) is payable. This would mean that workers would qualify for SSP from their first day of absence rather than their fourth.
- Labour also plan to make parental leave a day one right. There is currently a one-year qualifying period for parental leave. Parental leave gives parents the right to take up to 18 weeks’ of unpaid leave – at the rate of up to four weeks’ a year – for each child over the course of their childhood.
Banning “fire and rehire” practices
- This is the practice of dismissing employees who refuse to agree to contractual changes and then engaging them on the new terms. Labour plans to ban this.
Banning “exploitative” zero-hours contracts
- In order to combat job insecurity, Labour has pledged to ban “exploitative” zero-hours contracts and contracts without a minimum number of hours.
Tribunal claim time limits
- Labour also proposes to extend the time period for bringing claims to Employment Tribunals. Currently most claims must be brought within 3 months minus 1 day.
Conservative’s key proposed changes include:
“Overhaul” of Fit Notes
- The Conservatives plan to “overhaul” the fit note system shifting responsibility towards specialist work and health professionals rather than GPs.
Fund 100,000 high-quality apprenticeships
- The Conservatives plan to introduce 100,000 high quality apprenticeships “paid for by curbing the number of poor-quality university degrees that leave young people worse off.”
Cutting National Insurance
- The Conservatives plan to cut national insurance to 6% from 2027 – with a long-term ambition of abolishing it altogether and abolishing it for self-employed people by the end of the next parliament.
Clarify the Protected Characteristic of Sex
- The Conservatives plan to clarify that the protected characteristic of sex in the Equality Act 2010 means biological sex. The Conservatives plan to introduce legislation so that “in individual can only have one sex in the eyes of the law in the United Kingdom”.
Liberal Democrats’ key proposed changes include:
Increasing National Minimum Wage for zero-hour contract workers
- The Liberal Democrats plan to increase minimum wage by 20% for people on zero-hour contracts “at times of normal demand” in order to compensate them for the uncertainty of fluctuating hours.
Introduce a new category of employment status
- The Liberal Democrats plan to establish a new “dependent contract” employment status.
- This new status will fall between employees and self-employed individuals.
- Individuals who fall into this new category will be entitled to basic employment law rights such as holiday pay, sick pay and minimum earnings levels.
Increasing ‘Day 1’ Employment Law Rights & Doubling Maternity and Paternity Pay
- Similarly to Labour, the Liberal Democrats intend to remove the three-day waiting period before SSP is payable. This would mean that workers would qualify for SSP from their first day of absence rather than their fourth. The Liberal Democrats also intend to remove the lower earnings limit.
- Likewise, the Liberal Democrats also plan to make parental leave and pay a day one right. In addition, the Liberal Democrats intent to double statutory maternity pay and statutory paternity pay to £350.00 per week.
Introduce New Protected Characteristics: of “caring” and “care experience”.
The Green Party’s key proposed changes include:
Living Wage Increase
- The Green Party intent to increase minimum wage to £15 per hour for all ages, with the costs to small businesses offset by reducing their National Insurance payments.
Strengthening Workers’ Rights
- The Green Party plan to provide equal employment protections for all workers from the first day of their employment, particularly for gig economy workers, ensuring they receive fair pay and benefits, with gig employers whom repeatedly breach these rules being denied licences to operate.
Strengthen Trade Union positions
- The Green Party are proposing to repeal current “anti-union legislation” and introducing a new law with the “right to strike at its heart”.
Four-Day Working Week
- The Green Party plan to a move to a four-day working week.
Reform UK’s key proposed changes include:
Scrap 6,700 Laws
- Reform UK argue that these laws “hold back British business and damage productivity, including employment laws which make it riskier to hire people.” It is not clear which laws the party are intending to scrap.
Replace the Equality Act 2010 and scrap Diversity, Equality & Inclusion rules
- Reform UK argue that the Equalities Act requires discrimination in the name of “positive action”.
- Reform UK’s position is that this piece of legislation costs the economy billions of pounds in reduced economic productivity, creates division and leads to inequality and exclusion in majority groups.
Abolishing IR35
- Reform plan to do this to support sole traders.
Current polls suggest a Labour victory, which given the above proposed changes is likely to bring about significant employment law changes. Whilst Labour is promising to deliver a fairer deal for working people, the impact on employers and the tribunal system could be significant.
CASE LAW UPDATE
THE EMPLOYMENT APPEALS TRIBUNAL REINFORCES THE IMPORTANCE OF CONSULTING ON PROPOSED POOL FOR REDUNDANCY, ESPECIALLY WHERE A POOL OF ONE IS CONCERNED.
In case of Valimulla v Al-Khair Foundation, the Claimant was dismissed by reason of redundancy and subsequently made a claim of unfair dismissal.
Facts
Prior to his dismissal, the Claimant has worked as a liaison officer across the North-West of England. The Claimant had several colleagues who performed the same or similar roles in different locations.
The Covid pandemic lead to a decrease in work, therefore, the Respondent placed the Claimant at risk of redundancy in a pool of one. The other liaison officers who were based in other locations were not placed at risk. Three consultation meetings were held. However, the Respondent never consulted with the Claimant as to the appropriateness of the pool. The Claimant was dismissed by reason of redundancy. The Claimant brought a claim of unfair dismissal.
The employment tribunal accepted the Respondent’s submission that the Claimant was in a self-selecting pool of one. On this basis, the tribunal held that the Claimant had been fairly dismissed for redundancy. The Claimant appealed.
EAT’s decision
The EAT allowed the Claimant’s appeal and substituted a finding of unfair dismissal (on procedural grounds) because of the failure to consult with the Claimant about pooling.
Lessons for employers
This case highlights the importance of employers consulting with employees about every aspect of a proposed redundancy process, in order for a redundancy process to be considered fair.
The EAT in this case, made clear that meaningful consultation includes setting out a provisional proposal and along with the rationale for the proposal followed by providing an opportunity for employees to provide feedback. Responses made through consultations should be considered with an open mind.
Employers also need to ensure that they provide reasons as to why a certain pool has been selected for redundancy and be prepared to discuss that choice in consultation with employees. Moreover, an employer must ensure that the selection of a pool has come within the range of reasonable approaches open to a reasonable employer.
For further advice on recent Employment Law Changes please contact the employment team at employment@dtmlegal.com or call 01244 354 800 / 0151 321 0000
