Welcome to our July 2024 Employment Law Update! In this edition we cover the latest employment-related legislation changes proposed by Labour, information on our employment law and HR training sessions and a case update surrounding Ballerino v Racecourse Association where a ‘sham redundancy’ led to a successful discrimination appeal.
The King’s Speech
As promised in their election manifesto, Labour has acted on its promise to improve workers’ rights within their first 100 days in government by introducing two main pieces of employment-related legislation in the King’s Speech.
It is said that, if all the proposed changes are enshrined in law, these will represent the biggest change to workers’ rights in a generation. We have summarised the main proposals below:
Employment Rights Bill
- Making the right not to be unfairly dismissed a right from day one
- Eligibility for parental leave and sick pay without a minimum length of service
- Banning the use of exploitative zero-hours contracts and giving workers the right to a contract which reflects the number of hours they regularly work
- Ending the practice of ‘Fire and Re-hire’
- Reforming the law on employment status – the plan is to “simplify” the current law on employment status by creating a single status of worker and employee
- Strengthening Statutory Sick Pay
- Increasing the National Minimum wage
- Making flexible working the default for all workers from day one
- Strengthening protections for new mothers by making it unlawful to dismiss new mothers for a period of 6 months after their return to work
- Establishing a new Single Enforcement Body (to be known as the Fair Work Agency)
- Establishing a Fair Pay Agreement in the adult social care sector
- Reinstating the School Support Staff Negotiating Body
- Updating trade union legislation to grant trade unions new rights including to access workplaces, recruit new members and to simplify the recognition procedure
- Simplifying the process of statutory recognition of unions in the workplace
- Introducing the right to “switch off” when not at work
- Extending Employment Tribunal claim time limits from three to six months
Draft Equality (Race and Disability) Bill
The government proposes to introduce the full right to equal pay for ethnic minorities and disabled workers. The effect of this is that workers will be entitled to bring equal pay claims on the grounds of race and/or disability, in addition to the current right to bring such claims in relation to sex. Further, the government has proposed to introduce mandatory ethnicity and disability pay reporting for employers with 250 or more employees. The intention behind this is to close the ethnicity and disability pay gap.
We will be scrutinising the progress of the government’s legislative programme every month to bring you up to date with developments. In the meantime, you can review their proposals in Make Work Pay: Delivering a New Deal.
Legacy legislation
Several pieces of legislation expected to come into force over the next few months include:
- The Workers (Predictable Terms and Conditions) Act 2023 – September 2024. This gives eligible employees and workers the statutory right to request a more predictable working pattern and is likely to appeal to people with variable hours, those on fixed-term contracts of less than 12 months, agency workers and zero-hour workers. Eligible workers will be entitled to make a maximum of two applications in any 12-month period. To be eligible, the worker will need a minimum length of service – the length of which remains to be confirmed.
- Worker Protection (Amendment of Equality Act 2010) Act 2023 – October 2024. This imposes a positive duty on employers to take reasonable steps to prevent their staff from being sexually harassed during the course of their employment. If an Employment Tribunal holds that an employer has failed to fulfil this duty, a Claimant’s compensatory award could be increased by up to 25%. As well as imposing a positive duty on employers, this amendment also enables a Tribunal to hold an employer liable for sexual harassment committed by its employees. By imposing this duty on employers, the intention is to encourage employers to take preventative action to combat sexual harassment in the workplace, rather than reactive action after such conduct has taken place. We strongly recommend employers undertake a review of their current harassment policy and seek our advice on reviewing current practices. The employment team can provide training to all staff and particular line managers. In addition, the team can review and update a company’s current harassment policy and advise on reasonable steps that it could implement to prevent staff from being sexually harassed.
- Employment (Allocation of Tips) Act 2023 - October This is designed to ensure a fair allocation of tips among those working in hospitality.
To date, the government has not indicated what it intends to do with the above so, for now, we advise employers to continue on the basis that this legislation will continue to be implemented as planned. Employers should ensure that their internal policies and procedures are up to date to prepare for these changes. Further, and arguably more importantly, employers must ensure that HR and Line Managers are aware of these changes and have been trained on how to implement these in practice.
Code of Practice on Dismissal and Re-engagement (or ‘Fire and re-hire’)
Introduced on 18 July, the Code is designed to stop misuse of ‘fire and re-hire’ and gives tribunals the power to impose a 25% uplift in compensation awards in the event of a breach. Labour has stated it intends to strengthen the Code – and possibly imposing an outright ban on the practice of fire and re-hire unless there is ‘no alternative’.
Employment Law and HR Training sessions
If you haven’t yet signed up for our Employment Law and HR Training sessions, there’s even more reason to do so now with a new government at the helm, particularly given the raft of legal changes that have been proposed, some of which may be enforced imminently.
Maintaining up to date policies and procedures is of course crucial in ensuring compliance with the law. However, we also strongly encourage employers to take a pro-active approach in ensuring that employees and employers are aware of their legal rights and obligations, and that appropriate training is provided to ensure that policies are correctly implemented in practice. With this in mind, we have created bespoke training sessions covering a large range of different HR and Employment Law topics. These sessions can run across a half day or a full day and fees will be fixed based on the length of the training to be delivered and the number of attendees. Sessions can be entirely tailored to meet your specific requirements and business needs. Our “banter v discrimination” training session has, however, proven to be one of our most popular sessions. Our team are now taking bookings for September 2024 onwards, please do get in touch if you would like to book a session. Find out more here.
Case update
‘Sham redundancy’ leads to successful discrimination appeal
Ballerino v Racecourse Association
In summary, this case concerned a Claimant, Ms Ballerino, a financial accountant who was employed by the Racecourse Association (RA) to work 40 days a year. Ms Ballerino was dismissed from her employment during her maternity leave by reason of redundancy. It was Ms Ballerino’s case that there was no genuine redundancy situation and that she was treated less favourably on the grounds of her sex and/or on pregnancy and maternity.
Ms Ballerino successfully appealed the Employment Tribunal’s decision to dismiss her claim for direct sex discrimination and discrimination because of pregnancy or maternity after she was made redundant. She brought her claim after accusing the RA of using redundancy as a cover to dismiss her while she was on maternity leave, following a restructuring of her job by the incoming CEO. The Court of Appeal rejected the Tribunal’s reasoning and remitted the case back to the Tribunal to reconsider the question of redundancy. Read more…
The redundancy situation arose after the new CEO decided to restructure her job, incorporating the role of business analyst and making it a full-time post which was advertised externally. Ms Ballerino, who was on maternity leave at the time, was told that her job was at risk of redundancy because it was being amalgamated with another role. She was invited to apply for the new post and, at the same time, given a draft settlement agreement which, if she chose to accept it, needed to be signed within five days.
Ms Ballerino maintained that ‘the redundancy process was a sham and that she was the subject of maternity discrimination.’ After an extended period of negotiation which failed to resolve the situation, she was dismissed. The ET rejected her claim for unfair dismissal on the basis that the reconfigured post was, in most respects, very different from her previous role and so the RA was not obliged to offer it as a ‘suitable available vacancy.’ The ET also accepted the RA’s case that the role had originally been conceived as a separate analyst’s role but, after the first round of interviews, it was decided to incorporate the financial accountant role as well and that it was not ‘a device concocted to terminate her employment because she was on maternity leave.’ Ms Ballerino appealed.
The Court of Appeal rejected the first Tribunal’s reasoning on the grounds that it had failed to apply the correct test to establish if there was a genuine redundancy situation and had not answered the question whether the ‘respondent’s need for accounting skills…had ceased or diminished’. Instead, it went straight to the question of whether or not there was a ‘suitable alternative vacancy.’ A reorganisation and a requirement for additional skills did not, of itself, mean a redundancy situation would arise. The Court of Appeal remitted the case to the ET to reconsider the question of redundancy.
This case is a valuable reminder to employers to follow the correct procedures and processes when undertaking a redundancy procedure. It is imperative to ensure that there is a genuine redundancy situation as defined in the Employment Rights Act 1996 before seeking to make an employee redundant. This is especially critical if those identified as potentially at risk are pregnant, on maternity leave, or recently returned from maternity leave as they are legally entitled to greater protection and first refusal for suitable alternative roles. It is worth reiterating that an employee is not required to have any minimum length of service to bring a claim for discrimination or automatic unfair dismissal.
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.
