Forthcoming legislative changes
We appreciate that a number of these changes were covered in our January update, however it is vital that employers keep them in mind, as relevant policies will require updating to reflect the upcoming changes, as well as these being reflected in practice. As a reminder, here is a link to the forthcoming changes from April 2024.
Employment (Allocation of Tips) Act 2023
This legislation is designed to ensure that all those in (primarily) the hospitality sector are treated fairly when it comes to the distribution of tips. The Act creates a legal obligation on employers to fairly distribute any tips, gratuities and service charges they are paid or which they exercise control of significant influence over to their workers, without any deductions (“qualifying tips”). To assist with this, where qualifying tips are paid more than on an occasional/exceptional basis, employers are required to have proper record keeping and a written tipping policy as to how tips are dealt with in their place of business. Within this legislation, withholding tips from staff will become unlawful and remedies will be made available to employees at the Employment Tribunal if they feel their employer has failed to comply with their obligation.
The Government have estimated that £200 million a year will go back into the pockets of hard-working staff with this legislation change. The Department for Business and Trade has issued a draft statutory Code of Practice (on which they are currently consulting) to give employers guidance on how they should meet their obligations under the Act. Both the Act and the Code are due to come into force on 1 July 2024. Therefore, those employers affected by the changes should make sure to review their current arrangements for distribution of tips, gratuities and service charges to understand if they have qualifying tips under the Act and, if so, draft a tipping policy and organise appropriate record keeping.
Employer’s guide to right to work checks updated
The updated guide applies to right to work checks undertaken on or after 13 February 2024. The most significant updates included within the guidance relate to:
- Increased civil penalties for breaches: the maximum will be raised to £45,000 per illegal worker for a first breach, and £60,000 per illegal worker for repeat breaches;
- Removal of 28-day concession allowing late applications to the EU Settlement Scheme for relevant employees whose immigration status does not permit them to work in the UK.
- Requirement for employers to obtain additional evidence that anyone they are employing for "supplementary employment" is not working more than the permitted 20 hours a week.
Flexible working: Acas Code of Practice
Acas have recently issued a draft form of their revised code of practice on the statutory right to request flexible working, as set out in the Flexible Working (Amendment) Regulations 2023. Although this remains in draft form at this time, the Code is expected to come into effect in April 2024, provided this is first approved.
The Code provides guidance for employers and employees on their legal rights, responsibilities and good practice in making and handling statutory requests for flexible working (as set out in the Employment Rights Act 1996 (as amended) and regulations made under it). As highlighted within the Code itself, the Code provides guidance and therefore, failure to follow the Code does not, in itself, result in liability to proceedings in the Employment Tribunal. That being said, Acas considers the guidance within the Code to be good employment practice, and is strongly recommended that employers follow this, given the Tribunal will take the Code into account. The Code helpfully uses the terms “should and “must” throughout to distinguish between good employment practice and legal obligations.
The Foreword to the Code notes that flexible working is a broad term, covering ‘any working arrangement that meets the needs of both the employee and the employer regarding when, where and how an employee works’. Examples of different working patterns include part-time, home-based, hybrid, flexitime, job sharing, compressed hours, annualised hours, term-term working, and team-based rostering. With both the updated Code of Practise, and the legislation changes in mind, if you haven’t already reviewed your flexible working policy, now is the time to do it.
First indication of Labour plans
The Labour Party’s Green Paper ‘A new deal for working people’ states that it intends to strengthen workers’ rights from day one if they win the next general election – which is likely to be held this year. The document is short on detail, but the following gives a flavour of the direction of travel:
- Raise the minimum wage to at least £10 per hour for all workers;
- Raise the National Living Wage in order to address the rise in the cost of living and inflation since 2019;
- Ban unpaid internships except when they are part of an education or training course;
- Raise statutory sick pay and make it available to all workers, including those who are self-employed and employees currently not eligible as a result of the lower earnings limit;
- Create a single status of ‘worker’ for all but those who are genuinely self-employed;
- Give all workers day one rights on the job by ending qualifying periods for basic rights;
- Ban zero hours contracts and any contracts without a minimum number of guaranteed hours to give workers predictability;
- End the practice of “fire and rehire”;
- Bring about the right to “switch off” and disconnect so workers cannot be contacted by their employer outside of working hours;
- Make flexible working a day one right, with employers having an obligation to accommodate such requests as far as reasonable; and
- Bring about stronger family-friendly rights.
Labour’s reasoning behind their proposals is that more secure employment leads to a more productive economy. No doubt extra detail will be forthcoming once campaigning starts but, in the meantime, we advise all employers to keep their policies up to date so that they are ready to meet any major changes as and when they may arise.
Employment Tribunal fees may return
The government has launched an eight-week consultation into the payment of Tribunal fees in spite of a Supreme Court ruling in 2017 that the charging regime was unlawful and prevented workers from claiming their rights. The government proposes introducing a ‘modest’ fee of £55 from November 2024. They have cited affordability, proportionality and simplicity as the principles underpinning their proposal. If you wish to comment on the consultation, it is running until 25 March 2024.
Case update
Context matters in use of discriminatory language.
The Employment Tribunal upheld a claimant’s claim for unfair dismissal and disability discrimination after it ruled that his use of the full, rather than abbreviated, N-word in a remote race awareness training session was attributable to communication difficulties caused by his dyslexia and not a desire to offend.
Mr Borg-Neal was a longstanding employee of Lloyds Banking Group plc. (“the Bank”) with a clean employment record. As part of the bank’s ‘Race Action Plan’, all employees were obliged to enrol in race education training titled “Race Education for Line Managers”. During the session Mr Borg-Neal attended he asked how a Line Manager should handle a situation where they heard someone from an ethnic minority use a word that might be considered offensive if used by someone not within that minority. He noted he was thinking in the context of rap music. To illustrate his point, he added “the most common example being the use of the N-word in the black community”, but used the full N-word rather than the abbreviation. He then apologised immediately, realising his error. Despite the Bank’s acknowledgement that he had not intended to cause offence (either directly or obliquely) but had genuinely sought to increase his understanding of a sensitive subject, he was dismissed for gross misconduct because ‘he should have known better than to use such a word in a professional environment’ and, as a result of his action, the trainer was so upset, they were off work for a few days.
The Tribunal ruled that the Bank was right to consider the full use of the N-word to be totally unacceptable and never to be used in a professional environment. Even if no malice was intended, the effect of its use was likely to be ‘intensely painful and shocking for black people’. However, the Tribunal went on to rule that, in this particular case, dismissal was a disproportionate response. It was, however, acknowledged that had the Bank not done so, it may have been accused of condoning Mr Borg-Neal’s use of the word. Despite this being acknowledged, it was found that on the particular facts of the case, the Bank’s response was not reasonable. Mr Borg-Neal had immediately and repeatedly apologised. He also offered to apologise to the trainer directly. He was never resistant to furthering the objective of race equality and even suggested that he should undergo further training. He consistently demonstrated that he had learnt from his actions. Even when fighting for his job, he never argued that there had been any justification for his use of the word, and accepted immediately and consistently that he should not have done so. It found that Mr Borg-Neal’s dyslexia was ‘a strong factor causing how he expressed himself at the session’ and thus upheld the disability discrimination claim.
This is another case that turned purely on its facts. The Tribunal found that it was relevant that Mr Borg-Neal had said the word only once and then had immediately apologised. His question was relevant and well-intentioned. He had not used the word as a term of abuse or as a descriptor, but simply to ask how to deal with a situation in which unacceptable language was being used. It was also noted that the training session began with a script which warned against the use of language, but several participants (including Mr Borg-Neal) were delayed in joining and had not heard it. There were also concerns about the evidence the Bank had relied on to demonstrate the distressing effect of Mr Borg-Neal's actions on the people in the room. An example of this being that the Bank had no direct evidence from the trainer of the session herself.
In these circumstances, it was found that the Bank did not have reasonable grounds to consider Mr Borg-Neal's actions were gross misconduct. It had also failed to conduct a reasonable investigation.
This case and judgment are a timely reminder that employers must conduct a thorough, and open-minded, investigation no matter how egregious the accusations.
The information provided in this article is provided for general information purposes only, and does not provide definitive advice. It does not amount to legal or other professional advice and so you should not rely on any information contained here as if it were such advice.
Wright Hassall does not accept any responsibility for any loss which may arise from reliance on any information published here. Definitive advice can only be given with full knowledge of all relevant facts. If you need such advice please contact a member of our professional staff.
The information published across our Knowledge Base is correct at the time of going to press.
