Employment legal update #70

1. Carer’s Leave Regulations 2024

The Carer’s Leave Regulations 2024 came into force on 6 April 2024. The Regulations provide for the following:

• Employees have right to take up to one week of statutory unpaid carer’s leave in a 12-month period to care, or arrange care, for dependants with long-term care needs.
• Eligibility for the leave depends upon the employee having a dependant with a long-term care need, who needs to be absent from work to provide, or arrange care, for that dependant, and who has not already exceeded his or her statutory entitlement to carer’s leave.
• Eligible employees must comply with specific notice requirements set out in the Regulations.
• The amount of leave is determined by the employee’s normal working pattern. For those with a consistent work schedule, a week’s leave matches the period they are usually required to work. For those with a variable work pattern, the calculation is based on an average of the work periods over the preceding 12-month period, or the entire period of their employment if less than this.
• Eligible employees will be able to take the leave as half-day increments, full days, or as a continuous week.
• Employers can postpone an employee’s leave if they consider that the business would be unduly disrupted by the employee’s absence, and certain criteria apply to how this is operated.
• During carer’s leave, the employee will retain the benefit of his or her terms and conditions of employment, except for remuneration, and be bound by any obligations under those terms and conditions, with certain exceptions.
• Upon return, the employee will be entitled to return to the job in which he or she was employed before the absence, with the same seniority, pension rights, and not less favourable terms and conditions.
• There is a protection from detriment or dismissal on the grounds of taking, seeking to take, or because the employer believed that the employee was likely to take, carer’s leave.
• An employee with a contractual right to carer’s leave in addition to the statutory right, will not be permitted to exercise both separately. Instead, the employee may take advantage of whichever right is more favourable in any particular respect

2. Maternity Leave, Adoption Leave and Shared Parental Leave (Amendment) Regulations 2024

The Maternity Leave, Adoption Leave and Shared Parental Leave (Amendment) Regulations 2024 came into force on 6 April 2024. They extend the statutory protection from redundancy that currently applies to employees on maternity leave, adoption leave or shared parental leave for up to 6 months following their return to work. The extension means that the protection will also apply to pregnant women and to new parents who have recently returned from any period of maternity or adoption leave, or from a period of six or more weeks of shared parental leave.

3. The re-introduction of fees for employment tribunal claims and appeals to the EAT

Earlier this year the Ministry of Justice launched a consultation on the re-introduction of fees for employment tribunal claims and appeals to the EAT, except claims for payment from the National Insurance Fund (usually where the employer is insolvent) which would be exempt. The fee proposed is £55 regardless of the number of complaints raised in the claim or the number of claimants on the claim form. Unlike the 2013 fees scheme, no separate hearing fee is proposed. For appeals to the EAT, it is proposed that the appellant should pay a fee of £55 for each judgment, decision, direction or order being appealed.

The MoJ believes that this level of fee is proportionate and “generally affordable”. For claimants whose employment income and savings fall below certain thresholds, the existing civil court fee remission scheme, Help with Fees, would be extended to the employment tribunal and EAT. The consultation ended on 25 March 2024.

4. The Public and Commercial Services union

The Public and Commercial Services (PCS) union is to seek a judicial review against the government over the Strikes (Minimum Service Levels) Act 2023 and supporting minimum service level (MSL) regulations. The regulations setting out MSLs during strike action for passenger rail, ambulance services and border security services came into force in December 2023. PCS has stated that it will challenge the regulations on the basis that they contravene the right to strike under Article 11 of the ECHR. The TUC has also indicated that further legal challenges may be brought.

5. The Electronic Travel Authorisation scheme

The Electronic Travel Authorisation scheme has been open for applications from Bahrain, Jordan, Kuwait, Oman, the United Arab Emirates and Saudi Arabia from 1 February 2024 (applications from Qatari nationals opened on 25 October 2023) for travel to the UK on or after 22 February 2024. ETA applications are submitted online or via a new “UK ETA” app, with decisions expected within three working days unless further checks are required. Each applicant (including children) will need their own ETA. The fee is £10 each.

6. Pension gender gap

Research carried out into the pension gender gap by workplace pensions provider NOW: Pensions and the Pensions Policy Institute has revealed that UK women would, on average, need to work an extra 19 years in full-time employment to retire with the same pension pot as men. The research found that women retiring today at 67 have average pension savings of £69,000, in comparison to men with £205,000. Contributory factors include caring responsibility, childcare costs, career gaps and lower earnings. As a result, NOW: Pensions has called on the government to remove the £10,000-a-year earnings threshold for pensions auto-enrolment as it excludes many women who work part-time, hold multiple jobs or are freelancers. It is also campaigning for auto-enrolment to begin at age 18.

7. The “fire and rehire” Code of Practice

The government has now published its response to the consultation on the “fire and rehire” Code of Practice. It has also published an amended draft Code and explanatory Memorandum. The Code sets out how employers should act when seeking to change employment terms and conditions if the employer envisages dismissal and re-engagement. It sets out a number of requirements:

• Employers must consult employees and explore alternative options, without raising the prospect of dismissal inordinately soon or using the threat of dismissal as a negotiating tactic to pressurise employees in circumstances where the employer is not envisaging dismissal;
• Seeks to ensure dismissal and re-engagement is used only as a last resort;
• States that it will apply regardless of the number of employees potentially affected by the employer’s proposals, and regardless of the employer’s reasons for seeking changes to its employees’ terms and conditions;
• Where an employer is envisaging both redundancy and dismissal and re-engagement in respect of the same employees, the Code will apply for as long as dismissal and re-engagement remains an option;
• Employers should contact ACAS before raising the prospect of dismissal and re-engagement, but this does not change the general position that ACAS can be contacted wherever the Code applies.

8. Labour’s New Deal for Working People

The Labour Party has published a green paper, A New Deal for Working People, originally published in October 2022 and recently publicised on Labour’s website. It sets out a number of comprehensive reforms proposed should they come into power at the next election. These include:

• Raising the national minimum wage to cover the cost of living,
• Paying travel time in sectors with multiple working sites,
• Banning unpaid internships,
• Raising the rate of statutory sick pay and making it available to all,
• Strengthening collective bargaining, including establishing “fair pay agreements”,
• Creating a single worker status, with the same basic rights to sick pay, holiday pay, parental leave and unfair dismissal protection, and removing qualifying periods for these rights,
• Extending statutory maternity and paternity leave, reviewing shared parental leave, introducing bereavement leave and making it unlawful, except in specific circumstances, to dismiss a woman for six months after returning to work following pregnancy,
• Banning zero hours contracts and “fire and rehire” practices,
• Introducing a new right to “switch off” and to protect workers from remote surveillance,
• Repealing the Trade Union Act 2016, simplifying the recognition process, allow electronic balloting and establish a single enforcement body,
• Extending the time limit for bringing employment tribunal claims, remove statutory compensation caps and introduce personal liability for company directors,
• Requiring employers to maintain workplaces that are free from harassment, including by third parties, making ethnicity pay gap reporting mandatory for employers with more than 250 staff and enacting the socio-economic duty in the Equality Act.

Concerns have been raised by the Institute of Directors about the significant costs burden that Labour’s reforms could place on employers. However, the TUC are supportive of Labour’s proposals, describing the policies as “transformative”.

9. 524 employers have failed to pay the national minimum wage

In February the Department for Business and Trade (DBT) published the names of 524 employers that have failed to pay the national minimum wage following investigations by HMRC that concluded between 2015 and 2023. Nearly £16 million had to be repaid to over 172,000 workers together with financial penalties of up to 200% of the underpayment

10. Guidance for employers on menopause in the workplace

The Equality and Human Rights Commission has published guidance for employers on menopause in the workplace, which aims to help employers understand their legal obligations when supporting workers experiencing menopausal symptoms:-

• It explains what menopause and perimenopause is, with examples of the way in which the associated symptoms can negatively impact a worker.
• It summarises an employer’s legal obligations under the Equality Act particularly in relation to the protected characteristics of disability, age and sex.
• It emphasises the risk of claims for failure to make reasonable adjustments, direct and indirect discrimination, harassment, and victimisation.
• It also highlights an employer’s obligation to conduct a workplace risk assessment under health and safety legislation.
• The first of three videos explains how a worker experiencing menopause symptoms may be protected under the Equality Act.
• The second provides examples of adjustments to support workers including:
  • Changes to the physical work environment, room temperature and ventilation, rest areas and cooling systems, and relaxing uniform policies.
  • Promoting flexibility, i.e allowing working from home, changing shift patterns, and varying start and finish times.
  • Recording menopause-related absence separately from other absence due to the potential discrimination risks of taking disciplinary action for such absence, and not using language that ridicules a worker’s menopause symptoms due to the risk of harassment.
  • It highlights the costs of legal claims and losing staff and explains that making workplace adjustments can help attract and retain workers.
• The third video provides guidance on having conversations about menopause and advocates for open conversations about the menopause, involving all workers and not just management. It suggests training, lunch and learn sessions, and other opportunities to discuss experiences and get support, such as staff networks, and reminders of the support available to workers and confidential meetings with managers to discuss any issues. The video recommends introducing a menopause policy to outline the support available and provide guidance.

11. Statement of changes to the immigration rules

From February 2024, HMRC has announced that it will no longer provide clearance in relation to termination payments outside the non-statutory clearance procedure, which should be used in cases of genuine uncertainty about the correct treatment. HMRC notes that, where the guidance sought involves a proposed termination, any non-statutory clearance is not binding, and should be used as guidance only. However, they say that they will not retrospectively impose a different outcome, provided that the taxpayer has acted in good faith and supplied all the relevant information. HMRC may however change its approach in subsequent transactions if its guidance proves technically wrong. This means that HMRC is no longer committed to providing binding guidance in relation to the disability and injury compensation exception, the foreign service exception, the availability of the £30,000 threshold and non-cash provisions, nor in relation to the application of specific statements of practice or extra statutory concessions.

12. National minimum wage

Increases to the national minimum wage rates from 1 April have been announced as follows:

• The NLW is extended to apply to workers aged 21 and over (down from 23 and over) and increases from £10.42 to £11.44 per hour
• The NMW for 18 to 20-year-olds increases from £7.49 to £8.60 per hour
• The NMW for 16 to 17-year-olds increases from £5.28 to £6.40 per hour
• The apprentice rate increases from £5.28 to £6.40 per hour
• The accommodation offset rate increases from £9.10 to £9.99.

13. Employment tribunal awards

From 6 April, for cases brought on or after this date, the employment tribunal awards have increased as follows:

• The limit on a week’s pay (i.e. for SRP purposes among others) increases from £643 to £700
• The maximum compensatory award for unfair dismissal increases from £105,707 to £115,115
• The minimum basic award for certain unfair dismissals (including health and safety dismissals) increases from £7,836 to £8,533.

14. 4 Day Week Campaign

In addition, the 4 Day Week Campaign and think tank Autonomy have launched a new initiative, “4ugust”, suggesting that organisations undertake a mini-trial of the four-day week in August. Given the bank holiday in the final week, this would effectively provide workers with four extra days “off”. It is intended that 4ugust will run every year. Several companies already offer reduced summer working hours (for example, PwC allows employees to finish at lunchtime on a Friday).

And in the opposite camp is the government – Simon Hoare MP, Parliamentary Under-Secretary of State for Local Government, has suggested that if South Cambridgeshire District Council persists with its four-day working week the government will legislate to prevent it. The government has opposed a four-day working week in local authorities and provided guidance against its adoption, stating that the government would intervene if there was evidence of service decline under reduced working hours.

15. Disabled council employee awarded £4.6 million

An employment tribunal has awarded a disabled council employee £4.6 million following her dismissal while on sick leave. The employee suffers from ADHD and post-traumatic stress disorder (PTSD), which the tribunal held were disabilities at the relevant time and of which the employer had knowledge. The employee held the position of Director of Public Service Reform at Hammersmith and Fulham Borough Council for less than nine months. She suffers from PTSD as a consequence of her previous role spearheading the response to the Grenfell Tower tragedy. This is believed to be one of the highest awards made for a disability discrimination claim. The council is considering an appeal.

16. Personal data sharing during workplace mental health emergencies

The ICO has published new guidance for employers clarifying how personal data sharing may be permitted during workplace mental health emergencies:

• Data protection does not act as a barrier to necessary and appropriate information sharing where a mental health emergency occurs
• The primary focus should be on protecting the mental and physical health of the person involved and of any others who may be impacted
• The guidance acknowledges that employers may need to share necessary and proportionate information with the relevant emergency services and health professionals, to mitigate against the risk of serious harm to the worker concerned or to others
• It confirms that employers will not be punished for sharing a worker’s personal information with their next of kin or emergency contact, but reinforces that employers must use care and judgement in deciding the level of information to share on a case by case basis
• It encourages employers to forward plan how they will deal with personal data sharing, in the case of a suspected mental health emergency of a worker.

17. Paternity Leave

The Paternity Leave (Amendment) Regulations 2024 came into force on 8 March 2024. They apply in relation to any children born, or placements of adopted children taking place, on or after 6 April 2024. The regulations introduce the following key changes to the paternity leave regime:

• Fathers and partners can take paternity leave as two non-consecutive blocks of one week, rather than only in one block of either one or two weeks
• Fathers and partners can take their leave at any point in the first year after the birth or adoption of their child, rather than only within the first eight weeks after adoption or birth
• Shortens the notice period required for each period of leave
• A father or partner can give an initial notice to vary any dates given if they give 28 days’ notice of the variation

18. Injury to feelings award

The guidelines for the injury to feelings award under the Vento case have been announced for cases commencing on or after 6 April 2024 as follows:

• A lower band of £1,200 to £11,700 for less serious cases
• A middle band of £11,700 to £35,200 for cases that do not merit an award in the upper band
• An upper band of £35,200 to £58,700 for the most serious cases, with the most exceptional cases capable of exceeding £58,700.

Employers liability under TUPE

In Sean Pong Tyres Ltd v Moore the EAT has considered the effect of the TUPE on an employer’s liability for discrimination or harassment where the perpetrator’s employment has transferred under TUPE, but the individual who complained about the treatment has not.

An employee resigned and brought a claim against the former employer for discrimination and harassment suffered at the hands of a colleague. The perpetrator subsequently transferred to a new employer under TUPE, but the complainant did not, by virtue of having resigned because of the treatment suffered at the hands of the perpetrator. The transferor argued that its liability had also transferred. The EAT held that the transferor employer had “primary liability” under the Equality Act but this did not, in these circumstances, transfer to the alleged perpetrator’s new employer. Regulation 4(2)(a) of TUPE governs the rights and obligations under the Equality Act; however these are “in connection with” the employment contract of the claimant (who had not transferred), and not the contract of the alleged perpetrator.

As such, the EAT found that the employment tribunal was right to refuse the employer’s application to amend its response and to add the transferee as a party to the claim. Furthermore, even if liability could have transferred under TUPE, the tribunal had been entitled to refuse the employer’s very late application to amend at the final hearing.

Taxation of settlement agreement payment for pre-termination discrimination

In Mathur v HMRC the Upper Tribunal has upheld the decision of the First-tier Tribunal that a single sum paid to settle the appellant’s employment tribunal claims, including claims for pre-termination discrimination, was a termination payment within section 401(1)(a) of IT(EP)A 2003.

The appellant issued tribunal proceedings following the termination of her employment, seeking compensation both for pre-termination discrimination and for the discriminatory termination. Her employer settled the claim, without admitting liability, and paid a single settlement sum. The settlement agreement recorded that £30,000, an injury to feelings payment and her legal costs connected with the termination and ET proceedings, would be paid tax free. The employee was also given rights to access documents so she could dispute any tax liability.

The Upper Tier determined that the First Tier Tribunal had been right to find that the settlement sum was made “indirectly in consequence of” the termination because termination was the “trigger and catalyst” for bringing the claims which had been compromised under the settlement agreement. The alternative was that the settlement sum was paid “otherwise in connection with” the termination because termination was central to the employee’s tribunal claims. The First Tier Tribunal had taken account of the pre-termination discrimination; it had noted that the claim was partly based on pre-termination discrimination but had concluded that termination was central to the Tribunal proceedings. In addition, the First Tier Tribunal had considerable evidential difficulties if they were to apportion any part of the settlement sum to the pre-termination discrimination.

This decision highlights the difficulties employees encounter when seeking compensation for pre-termination discrimination. Employees are often reluctant to commence proceedings while employment continues, but risk compensation being taxed if proceedings are commenced after termination. Apportionment of the settlement sum (including of exempt amounts) is the often cited as the solution, but employers invariably resist apportionment. Tax should be considered at an early stage (when drafting ET claims and supporting evidence, and when negotiating the settlement agreement) to ensure that the employee’s position is consistently represented.

A trial period can be a reasonable adjustment

In Rentokil Initial UK Ltd v Miller the EAT has held that there is nothing to say that it cannot be a reasonable adjustment to give a disabled employee a trial period in a new role where they are no longer able to carry out their usual role.

The claimant was a pest control technician for Rentokil. He was diagnosed with multiple sclerosis and ultimately became unable to carry out a physically demanding role. His application for an alternative role as a service administrator was rejected due to his low scores in written tests and unsatisfactory interview. He brought a claim that the company had failed to make a reasonable adjustment in not offering him a trial period in that role, and his claim was upheld. Also upheld were his claims of discrimination arising from disability and unfair dismissal.

When the company appealed, the EAT upheld this decision. It concluded that a trial period would have been reasonable and there was a reasonable chance he would have been more successful in it than indicated by the recruitment process. The claimant was entitled to be treated more favourably than external candidates and the company should have considered whether he was able to carry out that role as a reasonable adjustment, rather than just whether he should be appointed.

Whistleblowing – detriment and dismissal claims

In Wicked Vision Ltd v Rice the EAT has upheld an appeal against an employment tribunal’s decision to allow the claimant to amend his whistleblowing claim to include a claim for dismissal under sections 47B(1A) and (1B) of the Employment Rights Act. The claimant had argued that he was subjected to a detriment when a co-worker, who also happened to be the owner of the business, dismissed him, and that the company was vicariously liable. The employment tribunal allowed the amendment which meant that he was able to bring a claim for dismissal under section 47B, in addition to his existing claim for automatic unfair dismissal under section 103A of the ERA.

In coming to this conclusion, the EAT considered the case of Timis and another v Osipov where the Court of Appeal had found that a dismissal by co-workers could constitute an unlawful detriment under section 47B(1A) and such a claim was not blocked by section 47B(2). The EAT interpreted Osipov narrowly, holding that it was only possible to bring a dismissal claim as a detriment claim under section 47B if liability under section 103A (automatic unfair dismissal) could not be claimed. In this case, as the company and the co-worker were essentially the same, the claim was able to be run under section 103A so section 47B(2) not did apply and the claimant’s claim could not be amended to include a claim for vicarious liability based on sections 47B(1A) and (1B).

This decision provides a narrow interpretation of Osipov and clarifies that an employee can only claim dismissal as a detriment if they would not be able to bring a dismissal claim under section 103A.

Employee unfairly dismissed for posting racist joke overturned by EAT

In Vaultex UK Ltd v Bialas the EAT has allowed an appeal against an employment tribunal’s finding that an employee had been unfairly dismissed for posting a racist “joke” on the employer’s intranet. The tribunal found that the employer’s decision was outside the band of reasonable responses, and that the employer’s zero-tolerance approach to discriminatory language did not mean that dismissal was the only option. It noted that the employee had expressed remorse and had indicated that he was willing to undergo diversity training. He also had a long record of unblemished service.

However, the EAT held that, notwithstanding that the tribunal had directed itself correctly with regard to the law, it had not properly applied the band of reasonable responses approach to the sanction, but had substituted its own view of the appropriate sanction for that of the employer, or alternatively had reached a decision that was perverse.

The EAT found that the tribunal had allowed its decision to be influenced by the judge’s own view of the gravity of the conduct, having regard to the various mitigating factors relied on by the claimant. On the facts found, as well as the employer’s policy on discrimination, the tribunal should have concluded that the employer was entitled to dismiss even if it was a harsh decision.

Tribunal had jurisdiction to hear claim of Seafarer working on superyacht

In Yacht Management Company Ltd v Gordon, the EAT has upheld an employment tribunal’s decision that it had territorial jurisdiction to hear claims under the Employment Rights Act and Equality Act brought by a seafarer who worked on a superyacht that did not enter a UK port or UK waters at any time during her employment. There were plenty of pointers to endorse the Tribunal’s conclusion that her base was in Great Britain, and these included the fact that her bank account was located in the UK; she accounted to HMRC for tax; and the governing law of her contract was the UK. Additionally, she started and ended her journey to where her duties took place (the yacht) in Great Britain.