Employment Law Update | September 2024

Welcome to our latest employment law update.

As always please don’t hesitate to contact James Austin or Brendan Bah if you have any questions arising from the news items below.

• In the News 

• In the Law

• In the Courts

• In the Employment Tribunal

In the News

National Living Wage & National Minimum Wage – Low Pay Commission: What does it mean for employers?

One of the Labour Party’s key objectives before the general election was to make the UK the best place possible to live and work, and making work pay for the lowest earners in society was a core part of that commitment.

As part of its manifesto, Labour pledged to ensure the minimum wage is a real living wage that people can live on.

To this end, the government has now written to the Chair of the Low Pay Commission (LPC) asking it to update its remit.

The LPC has been asked to consider the following:

• To recommend a revised National Living Wage (NLW) rate from April 2025 that takes into account the current cost of living, including the expected annual trends in inflation from now to March 2026.
• To ensure the NLW does not fall below two-thirds of UK median earnings for workers aged 21 and over (£17.40 as at April 2023).
• To recommend a new National Minimum Wage (NMW) rate for 18 to 20 year olds from April 2025 that narrows the gap between the NMW and the NLW – this will be a step towards the government’s ultimate aim of a single adult rate.
• To continue to monitor, evaluate and recommend the under 18 and apprentice rates, which the government has requested should be set as high as possible without damaging the employment prospects of each group.

The NLW was introduced in April 2016, and in 2019 the then-government set a target for it to reach two-thirds of median earnings by 2024 for workers aged 21 and over.

The current NLW, set in April 2024 is £11.44 an hour. This was an increase of 9.8% from the previous year.

The NMW, also set in April 2024 is £8.60 for 18-20 year olds and £6.40 for under 18s and apprentices.

The LPC has responded to its new remit stating that it will use a broad range of metrics and evidence (including headline measures of inflation, the ONS Household Cost Index (HCI) and other qualitative measures of living standards) when assessing the cost of living.

Its policy paper also suggests that employers can expect a larger increase to the rate for 18-20 year olds than others. The LPC’s current estimate of the NLW for next year is £12.10 but this is expected to rise.

Pathways to Work

Work and Pensions secretary Liz Kendall has set out the government’s intention to introduce “fundamental reform” to combat economic inactivity at the launch of its Pathways to Work report. The report will act as a blueprint for a government whitepaper exploring ways to “get Britain working”, recommending local health services be better integrated with job centres, as well as highlighting the responsibility of employers.

Economic inactivity, a measure of the number of people out of work and not seeking employment, made headlines earlier this year. Since 2020 it has risen by more than 800,000 to reach its highest numbers since 2012, with many highlighting the huge burden this represents to the economy and employers who are already suffering skills shortages.

The commission behind the report, set up by Barnsley Council pointed some of the responsibility at employers, saying: “They have focused too little on what should be their top priority – stemming the flow of existing workers out of workplaces into inactivity because of ill-health.”

Data from the Office for National Statistics (ONS) shows economic inactivity as a result of long-term sickness reached a record high of 2.8 million working-age people in early 2024 – 700,000-plus more than before the pandemic.

The report said the role of businesses had been “largely ignored” in tackling economic inactivity. “Employers have not sufficiently focused on what they could be doing to prevent rising rates of inactivity,” it said. “Not enough is being done to make jobs attractive and wages sufficient to help close the gap with benefit payments so that people who are economically inactive feel that work is worth it.”

It is important that employers continue to focus on supporting and retaining employees. Implementing comprehensive policies and procedures, increasing job security and providing access to effective support networks are vital in promoting a positive work-life balance, enabling employees to continue working following periods of long-term sickness.

In a separate analysis, the TUC found that economic inactivity due to long-term sickness amongst women rose by 48% in the past five years, compared with 37% for men. Long-term sickness is now the most common reason for women to be out of work, with the actual figure reaching 1.54 million, the highest since records began.

Having female-centred policies or sections within policies, specifically to address issues such as menstrual disorders and the menopause, are key in reducing the increasing trend for women to be economically inactive due to long-term ill health.

Workplace sickness

A report by the Institute for Public Policy Research has found that the “hidden cost” of employee sickness reached £103bn in 2023, an increase of £30bn since 2018. The report also revealed that £25bn of the increase was caused by lower productivity and only £5bn attributed to an increase in the number of sick days.

The research concluded that health and work are interacting in a “vicious circle” in Britain today, with UK employees more likely to work through sickness compared with their peers in other OECD and European countries.

This has a considerable impact on productivity – on average, employees lost the equivalent of 44 days of productivity due to working through sickness, up from 35 days in 2018. They also lost 6.7 days through taking sick leave, an increase from 3.7 days for the same period.

In addition, the report stated that working through poor health was more common among those from marginalised ethnic groups, people in lower-quality jobs and workers lacking formal qualifications. Black or Asian workers are twice as likely to work through sickness compared with those who are white British, all else being equal.

Presenteeism is a major issue. Too often, employees feel pressured to work through sickness, harming their wellbeing and reducing productivity. This could be due to a toxic workplace culture, poor management or financial insecurity. Stigma can also play a “huge role” in presenteeism, particularly for those who are experiencing poor mental health.

Presenteeism can have a “devastating impact” on employees’ work and private lives. If employees continue to work when they are unwell, they run the risk of further deterioration in their health, often prolonging their recovery, which in turn could lead to longer-term absences and further loss of productivity.

As previously stated, workplace culture can play a significant role. Not taking time off is often seen as a badge of honour; equally, a culture of long hours frequently persists, despite significant evidence showing that working longer hours doesn’t mean we are more productive - quite the opposite is true, in fact.

Companies need to recognise when they have a problem and how it should be dealt with. Many companies believe that the wellbeing of their employees is fine, but this data shows otherwise. Organisational culture, how engaged your staff are and the reasons they are unwell or leaving are the key metrics that should be measured regularly as a tool to gauge employees' wellbeing.

What can employers do?

Train managers fully to hold constructive, meaningful and productive return-to-work meetings with their staff, and act on the outcome of these meetings.

Create a safe and inclusive culture, where not taking time off and working long hours are no longer “the norm” and where staff feel safe to disclose issues and concerns and seek support from their manager and others around them.

Relationships with colleagues

Following a recent issue where a former chief executive was judged to have committed serious misconduct by failing to report his professional ties, BP has recently implemented a new policy on conflicts of interest.

Whilst these types of polices aren’t new, what BP has specifically stated is that senior leaders have three months to reveal the details of any personal relationships they have had with colleagues or agency workers in the last three years. As part of BP’s code of conduct, non-compliance could lead to disciplinary action.

Employees were previously required to disclose relationships if they felt there could be a conflict of interest. However, they are now required to disclose all intimate relationships, whether there is a possible conflict of interest or not. There is some concern that this could mean BP becomes the “judge” when deciding what relationships mean for its business and what could be classed as a conflict of interest.

Ensuring that relationships at work don’t become an issue can be a serious cause for concern, especially in certain sectors where you have large numbers of family and friends working together.

Whilst asking staff to disclose relationships over the past three years could be seen as overkill, there has to be a balance between business risk and employee rights. It could be worth having a specific policy covering workplace relationships, especially in relation to bias, conflict of interest and abuse of power, as well as allegations of sexual discrimination harassment, and unfair dismissal.

 

In the Law

Impending/recent changes

We await news on the Government’s proposed amendments in respect of:

• Unfair dismissal becoming a day one right
• Zero hours/casual contracts
• A right to ‘switch off’

We will provide you with the full details once the Government announces them, but we have set out below details on areas where a reasonable amount of detail is available.

Worker Protection Bill

After receiving royal assent in October 2023, the amendment to the Equality Act (2010) (Worker Protection Bill) will come into force from 26^th October 2024.

The Bill now places a legal obligation on employers to take “reasonable steps” to prevent sexual harassment in the workplace. Employers have always been required to take reasonable steps; however, this amendment now makes it a legal obligation (not just a duty).

Tribunals will also have the power to uplift any compensation due by up to 25% if they find an employer has breached this.

It looked as though the duty to protect workers from harassment by a third party would be re-introduced following its removal in 2023, but it is not technically included in the Bill. However, it should be noted that the new preventative obligation still requires employers to take reasonable steps to prevent sexual harassment by anybody, including customers, clients and members of the public (third parties).

Although the Bill is vague on what ‘reasonable steps’ are, it is advised that employers as a minimum:

• Ensure all policies are up to date;
• Ensure all staff have access to them;
• Ensure all staff receive regular training which could include:
  • What harassment is
  • What is required of them (including at social events and online)
  • Who they can report allegations to (whether they experience or witness harassment)
  • What to do if harassment is reported to them
  • What the business will do if they are found to have committed harassment.

We recommend that companies review their policies and procedures to ensure they’re fit for purpose and provide training of the type set out above. Contact us if you want us to support you with either.

Statutory carers leave

On 6^th April 2024, the new Statutory Carers Leave Regulations (2024) were introduced. These give employees in England, Scotland and Wales a statutory right to unpaid carer’s leave.

In short, the regulations entitle employees to be absent from work for the purpose of providing or arranging care for dependants with long-term care needs. Any employee who meets the eligibility criteria will be able to take leave, regardless of their length of service.

Leave is available to take in increments of half days or individual days, up to a maximum of one week in total, over a 12-month period.

During any period of carer's leave, employees are entitled to their usual terms and conditions (apart from payment) and will remain subject to all their usual obligations.

Employees taking carer's leave will have the same employment protections that are available when taking other forms of family-related leave, including protection from detriment and dismissal attributable to the fact that they took or sought to take leave.

Contact us if you don’t already have an appropriate policy covering this right.

Neonatal care leave

At present there is no specific statutory right to leave or pay for employees if their baby requires specialist neonatal care after birth.

Fathers and partners who are only eligible for paternity leave may exhaust their two-week entitlement if their baby is in neonatal care for a prolonged period. A 2019 survey by Bliss, a charity for premature and sick babies, showed that 36% of fathers and partners were signed off sick and 11% of parents left their jobs where their baby was in neonatal care.

The Neonatal Care (Leave and Pay) Act 2023 intends to address these issues. Under the Act, employees will have a statutory right to take leave where a child has received, or is receiving, neonatal care. This is in addition to any other statutory family leave which they may be entitled to. The right applies in respect of all babies who have received neonatal care, regardless of whether they were born premature, or full-term but sick.

Much of the detail of the statutory entitlement has yet to be defined, so it is unclear how the new rights will work in practice, but the key features of the Act include:

• There will be no qualifying period for statutory neonatal care leave (SNCL) and eligible employees will be entitled from day one of their employment.
• The length of leave will be based on the length of neonatal care, up to 12 weeks.
• Neonatal care must commence within the first 28 days after birth and last at least seven days.
• Employees will have 68 weeks from the first date of neonatal admission to take their leave, meaning it can be added to the end of other statutory leave.
• There will be a two-tiered approach to notice of taking leave:
  • Short, informal notice for SNCL taken soon after the date of a baby’s admission to hospital.
  • Longer notice (at least twice as long as the intended leave, capped at four weeks) where SNCL begins at a later stage.
• Employees will be entitled to receive statutory neonatal care pay (SNCP) for the duration of their SNCL, if they meet minimum length of service and earning requirements (as with other types of parental leave).
• SNCP will be paid at a rate set by the Government each year, and is likely to be the same as the rate for statutory maternity and paternity pay.
• Employers can put in place their own workplace neonatal care leave policy that is more generous than the statutory scheme, or they can enhance the amount of SNCP to make it more attractive. Employees would not forfeit their statutory rights, but would be able to take advantage of whichever is more favourable.
• Employees must give notice in writing.

Further information will be available once the regulations have been published, but it’s one to plan for and keep an eye on for future updates.

Allocation of Tips Act (2023)

After receiving royal assent in May 2023, the Employment (Allocation of Tips) Act 2023 comes into force on 1^st October 2024. The Act applies in England, Scotland and Wales.

It regulates how employers allocate tips among workers by introducing obligations to ensure that workers receive "tips, gratuities and service charges" in full, and that those tips are allocated in a fair and transparent way.

Key features of the Act

• It applies to all employees, including eligible agency workers (although any tips may be paid via the employing agency).
• It covers the full amount of all “tips, gratuities and service charges” received and/or controlled by an employer. Tips received directly by an employee and kept are not covered under the Act.
• It applies to tips paid by customers on or after 1^st October 2024.
• Tips must be allocated in a fair and transparent way and be paid to the employee no later than the end of the month following the month in which the tip was received (e.g. a tip received on 15^th July must be paid by31^st August).
• Employers that receive tips on “more than an occasional and exceptional basis” will be required to have a written policy setting out how those tips are distributed; this must be available to all employees (including agency workers).
• Employers will also need to keep records of tip allocation for three years and make those records available to workers on request.
• Employers may arrange for all or part of the qualifying tips, gratuities and service charges to be allocated to workers by an independent tronc operator (if it’s fair to do so).
• Any deductions from eligible tips other than those required by law (such as tax and national insurance contributions) are prohibited.
• Workers cannot opt out or be required to opt out of their rights under the Act.
• Workers have 12 months (from the date of the failure to comply) to raise claims with an employment tribunal where there has been a failure to comply with the obligations within the Act.
• Workers can also raise a claim regarding an employer’s failure to comply with their duties regarding policies and records within three months from the date of failure.

The Secretary of State has issued a statutory Code of Practice on the Fair and Transparent Distribution of Tips. Failure to comply with the Code will be admissible as evidence in employment tribunal proceedings and tribunals will be required to take it into account. Contact us if you require any support.

Fire and Re-Hire – Part One

The statutory Code of Practice on Dismissal and Re-engagement, more commonly known as the Code of Practice on Fire and Rehire, came into force on 18^th July 2024.

“Dismissal and re-engagement” applies when an employer considers changing (for whatever reason) its employees’ contracts of employment. If the changes are not agreed, the employer may, as a last resort, dismiss employees before either offering to re-engage them or offering to engage other employees, in substantively the same roles, to effect the changes.

Contracts of employment, whether in writing or agreed verbally, are legally binding and their terms cannot usually be changed by just one party. Instead, changes will usually need to be agreed by both the employer and the employee, or by their properly authorised trade union or other employee representatives.

Dismissal and re-engagement can have several negative consequences:

• It can create legal and reputational risks for the employer.
• It can be harmful to employees’ interests.
• It can damage the employer’s relationships with its employees, potentially leading to disengagement and industrial conflict.

The code sets out the reasonable steps an employer must explore before contemplating “fire and rehire”. It also seeks to ensure that employers do not raise the prospect of dismissals unreasonably early in the process or put undue pressure on employees to accept the new terms.

Key provisions within the code include:

• Fire and rehire should only be used as a last resort.
• Employers must consult ‘for as long as reasonably possible’. There is no minimum time period.
• Employers should contact ACAS at an early stage before they raise fire and rehire with their employees.
• Viable alternatives to fire and rehire need to be explored, including taking advice from employees and their representatives.
• Employers should not threaten dismissal if it is not actually envisaged.
• Employers must not use the threat of dismissal to put pressure on employees into signing new terms and conditions.
• If more than one change is being implemented, the employer might consider introducing them on a phased basis.

The code also gives tribunals the ability to uplift compensation by up to 25% if an employer unreasonably fails to follow it.

The reason this article is entitled “Part one” is that the new government has said it will end fire and rehire and replace and strengthen the code of practice as part of their election manifesto.

If you have any questions on the new Act or how any future changes will affect your business, please contact us.

 

In the Courts

Supermarket manager left out of social media posts was harassed

In Cooper (C) v Sainsbury’s, C was the store manager at the Pontypridd store and had worked for the company for over 30 years, at the time of leaving.

Following a restructure in July 2022 he went off sick due to anxiety.

In November 2022, a senior manager (H) posted a message on the company’s internal social networking platform and on LinkedIn, titled ‘Celebrating International Men’s Day’ – having celebrated International Women’s Day in a similar fashion.

The post read: “I'd like to take a moment to celebrate the male leaders in my team and say thank you for all that you do to help make our stores across South Wales, Gloucestershire and Worcester places where colleagues love to work and customers love to shop. All of you do this [while] leading busy lives outside of work too, dealing with health, family and personal issues in the same way that everyone else does, yet you all show up for work each day, put on a name badge and provide support, guidance and leadership to the thousands of colleagues that work [in] our region. Thank you [and] Happy International Men's Day everyone!”

In both posts, there were photos of each of the male store managers in his region, and in the LinkedIn post he named and ‘tagged’ each of them such that this would then link to the pages of those store managers. He did not name or tag C. C was notified of these posts by his wife and stated this had a massive negative impact on his health, leaving him feeling excluded, humiliated and violated by the post, and believing the reason for his exclusion was due to his sickness absence. He also said he had had numerous conversations with associates who contacted him asking if he had left the company.

H stated that C had deleted WhatsApp (the usual form of communication) and asked not to be contacted and left alone to recover. He felt if he had tagged C on LinkedIn, it would have disturbed him with “hundreds of alerts”. He said he considered this “the last thing C would have wanted”. Moreover, he did not have a photograph of C and did not consider it appropriate to ask him for one.

The tribunal accepted that H had considered what to do and had proactively reached the conclusion that, on balance, given that the claimant had been off work for 16 weeks, he should not include the claimant.

However, the tribunal ruled in C’s favour that the failure to include him in the International Men’s Day posts was harassment and unfavourable treatment related to disability.

The tribunal said: “While the tribunal again has sympathy with the respondents’ position, we nonetheless accepted the claimant’s evidence that having people contact him caused him to feel excluded and that it was reasonable for this claimant, as a senior store manager, in those circumstances to feel humiliated as a result, particularly when there had been nothing to have prevented H from telling the claimant of the post when speaking to him the day prior.”

This case should serve as a reminder for employers that all people managers should be trained in relation to diversity and inclusion and have individual characteristics in mind when making any decision to take action (or not take action in this case) in relation to any employee. This case also highlights a lack of awareness of what can constitute harassment in the workplace, and that all staff need to understand what constitutes harassment, bullying or discrimination, and how to deal with it if it’s reported to them.

Employment tribunal finds Christian social worker who had “dream job” rescinded was discriminated against

A Christian social worker (N) who had a job offer rescinded after a Google search by his prospective employer threw up articles pertaining to comments he had previously made on Facebook about homosexuality, was directly discriminated against, a Leeds tribunal has ruled.

N qualified as a social worker in 2021. Following this, in May 2022 he was offered his “dream job” as a discharge mental health support worker at Touchstone Leeds, a charity which provides mental health and wellbeing services to people across Yorkshire.

In his application, N was open about his religion and referred to himself as Rev. N. The offer was subject to satisfactory written references being provided and a DBS check. The two references were found to be unsatisfactory and lacking in detail, and a third was provided by a family friend (which was against Touchstone’s policy).

Following receipt of these references, B (Touchstone’s Business Development Director) carried out a Google search of N and was directed towards two articles, published by the BBC and the Guardian. The Guardian article from 2017 read “Christian thrown out of university over anti-gay remarks loses appeal”. This followed a Facebook post where N had stated that homosexuality was a sin.

The BBC article from 2019 read “Sheffield University student wins Facebook post appeal.” N appealed the university’s decision claiming that it breached his rights to freedom of speech and thought. He further stated that he had been expressing a traditional Christian view that “the Bible and God identify homosexuality as a sin”.

Following this discovery, N’s conditional job offer was withdrawn without any discussion. The follow-up email read in part: “We have uncovered some information about you which does not align with the Touchstone Leeds ethos and values; we are an organisation proud to work in alliance with the LGBTQI+ community and we pride ourselves with being an inclusive employer. It is with regret therefore that we must withdraw the provisional offer of employment made to you. We thank you for your interest in Touchstone and wish you all the best with your future endeavours.”

The parties had a second meeting and following this Touchstone maintained the withdrawal. In its response to N the organisation said, “You did not offer us any real assurance that you would be able to actively promote LGBTQI+ services within the community to service users who are at incredibly high risk of self-harm and suicide and that your beliefs would not be asserted in a way that goes against the purpose of what we are trying to achieve.

“This causes us a great deal of concern that you might not be able or willing to promptly signpost service users to LGBTQI+ specific services, which for a service user in crisis, could literally mean the difference between life and death.”

At the Employment Tribunal, Judge Brain concluded that N had been directly discriminated against when the job offer was rescinded. He also stated that the organisation could have raised their concerns with N and given him an opportunity to provide the assurances the organisation required.

It can be difficult to find a balance between an employee’s religious or philosophical beliefs and ensuring an inclusive workplace. This case demonstrates that whilst employers have a duty of care to protect vulnerable service users (and employees), individuals also have the right to express their views – whether you agree with them or not.

It's also worth noting that the job offer in this case was conditional on the receipt of satisfactory references. The case report suggests these were not received, so the offer could possibly have been rescinded on that basis instead.

 

In the Employment Tribunal

Employee’s belief in ‘English Nationalism’ not protected

In Thomas (T) v Surrey and Borders Partnership NHS Foundation Trust, T claimed that his assignment had been terminated because of his belief in English nationalism. As a preliminary issue, the employment tribunal had to consider whether his belief was a ‘protected belief’ under the Equality Act 2010.

The tribunal held that whilst many aspects of T’s belief in English nationalism would have been found to be protected by Equality Act 2010, his belief that there was no place in British society for Muslims or Islam itself, and that Muslims should be forcibly deported from the UK, meant that it failed part of the test set out in the case of Grainger v Nicholson, namely that the belief must be worthy of respect in a democratic society and must not be incompatible with human dignity or conflict with the fundamental rights of others.

The Employment Appeal Tribunal agreed with the tribunal.

 

The Employment Team at LCF Law advises on all aspects of the full range of employment law issues for businesses. Whether that is dealing with everyday disciplinary and grievance procedures or defending employment tribunal claims, we will be more than happy to discuss your needs with you.

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