Welcome to our October 2024 Employment Law Update!
It's been a busy month for employment law updates, in this edition we cover the latest news and legislative changes and proposals laid before government.
Our case update this month focuses on the six-year campaign by over 3,500 (mainly female) Next retail store employees to achieve pay parity with their (mainly male) warehouse colleagues which has now concluded after an Employment Tribunal ruled in their favour.
This edition also provides detail on Wright Hassall’s End Workplace Bullying Day and our training sessions that can assist with the array of legislative changes that have recently come into effect, helping you to keep up-to-date and compliant.
Key October dates
Fair allocation of tips
The Employment (Allocation of Tips) Act 2023 came into force on 1 October 2024. The Act applies to all tips, gratuities and service charges paid by customers on or after 1 October 2024. Employers now have a duty to ensure that such payments are allocated to workers fairly and transparently as well as to make payment in full no later than the end of the month following the month in which the customer paid the tip. The Government’s Code of Practice is a useful guide and outlines the scope of the provisions and how to address problems when they arise. In the meantime, we advise employers to check that their tipping practices and policies are now compliant. For employees who feel that their employers are not complying with the Act or the Code of Practice, they will have longer than usual (12 months) to bring their claim to the Employment Tribunal who may make awards up to £5,000 for an employee’s financial losses. If you would like a review of your tips policy, please get in touch and we will be delighted to help.
Protecting workers from sexual harassment
The Worker Protection (Amendment of Equality Act 2010) Act 2023 (“the Act”) came into force on 26 October 2024. Employers must take reasonable steps to prevent their staff from being sexually harassed during the course of their employment or risk a 25% uplift to a Claimant’s compensation at the Employment Tribunal. More guidance can be found in the EHRC technical guidance and their employer 8-step guide to prevention. Employers should consider this guidance carefully as Employment Tribunals have the power to consider compliance with the EHRC technical guidance when considering whether to award an uplift on compensation to Claimants.
Note
The Employment Rights Bill, introduced on 10 October 2024, seeks a further amendment to the Equality Act 2010 to impel employers to take all reasonable steps as well as a proposal to make employers liable for third party harassment. Some will recall that both were originally included within the original Worker Protection Bill during the last Government and were removed by the House of Lords as being too onerous. Employers will need to watch and see how the changes proposed by the Employment Rights Bill fare on this occasion. The proposed Bill also introduces making an allegation of sexual harassment as a protected disclosure under whistleblowing legislation.
We have already covered this law in some detail in September’s update and in our September seminar but please get in touch if you need help drafting or amending your policies. We can also deliver appropriate training for all your staff, particularly line managers, your internal HR team and other senior members of the business who may have incidents of sexual harassment reported to them.
Employment Rights Bill laid before Parliament…
The new government met its deadline of delivering its Employment Rights Bill to Parliament on 10 October, 100 days after it was elected. The content of the Bill was broadly laid out in the King’s Speech, so there are no particular surprises.
The key proposals are:
- Day one rights: Employees are protected from unfair dismissal (including redundancy without a fair procedure) from day one of their employment, subject to a statutory probationary period where dismissals on the grounds of capability, conduct and statutory restriction will be permitted. We do not know at this stage how long the statutory probationary period will be. Employees will also be eligible for paternity and parental leave from day one.
- A new bereavement leave and pay: The statutory right to parental bereavement leave will be broadened to include a wider range of personal relationships which has yet to be confirmed. However, it would be expected that this will be limited to family members. It will remain a day one right for employees.
- Zero hours contracts: Qualifying workers will be entitled to the right to a new contract reflecting the hours worked over a 12-week reference period putting an end to exploitative zero hours contracts; and employers will be required to give reasonable notice of changes to shifts or working hours and compensation for cancellation or an early finish.
- Fire and rehire: Employers cannot dismiss employees who refuse to agree to a variation of their contractual terms – to do so will be deemed automatically unfair. The only exception is if the business is in trouble and has no alternative.
- Statutory sick pay: This will be payable to all workers from day one of their employment and day one of their sickness absence i.e. there is no waiting period. There will also be lower levels of SSP for low wage workers who do not meet the existing £123 per week earnings eligibility criteria.
- Flexible working: Remains largely the same however, a new reasonableness criterion will be introduced for an employer who wishes to reject a request. The default position remains that employers only able to refuse the request based on statutory grounds laid out in the Bill (which remain the same as those listed in the Employment Rights Act 1996).
- Fair Work Agency: This is a new enforcement body designed to enforce employment rights such as the National Minimum Wage, holiday and sick pay. An Office for Equality and Opportunity will oversee equality policy and legislation.
- Trade Unions: Trade union legislation and the rights for employees to join a union will be strengthened. Minimum service level legislation for certain sectors will be repealed.
- Pregnancy rights: Pregnant women will be further protected against dismissal – in addition to protection against redundancy – from the moment they inform their employer to up to six months after their return from maternity leave.
The government has also published, Next Steps to Make Work Pay. This outlines its plans for future consultations and reforms including the right to switch off, the introduction of the Equality (Race and Disparity) Bill, introducing a single status for workers and a review of the parental leave and carers' leave systems.
…and in other news
Workers (Predictable Terms and Conditions) Act 2023
Although this became law in September 2023, the Government decided against enforcing it, as originally planned by the previous Government, in September this year. As outlined in the Employment Rights Bill (see above), the Government intends to go further than just giving workers the right to request a more predictable work pattern.
End Workplace Bullying Day – 25 October 2024
On Friday 25 October 2024 we launched our second annual End Workplace Bullying Day. You will have seen over recent months that Tina Chander has released troubling statistics relating to the true reality of bullying in the workplace and widespread misunderstanding as to what constitutes bullying. If you would like to discuss policies and practices that you can put in place to prevent workplace bullying, please contact Tina Chander.
Modern Slavery and McDonalds
A BBC report has revealed that 16 people, employed by McDonalds and a bread factory, were victims of modern slavery, trafficked by a gang from the Czech Republic (three of whom have subsequently been jailed). Although the situation lasted several years, neither business picked up on signs of slavery despite the victims’ wages being paid into the same account, living at the same address and, in the case of McDonalds, working excessive hours. The CIPD has produced a factsheet on the legal definition of modern slavery, how it is manifested, identifying and mitigating risk, and HR professionals’ role in preventing it.
Employment law & HR training sessions
Our employment team’s half or full day interactive training sessions, alongside our more informal Lunch and Learn sessions, are designed to update employers on both recent and upcoming changes in legislation, raise awareness of employees’ legal rights and obligations and provide guidance on conducting a variety of internal HR procedures in line with legal obligations and best practice. Covering a range of different HR and employment law topics, one of our most popular sessions has been ‘Banter vs Discrimination in the Workplace’. The team uses Menti as a method to encourage views and opinions from participants whilst ensuring an interesting and engaging session is delivered. With the new duty in respect of sexual harassment in force, this training session, alongside our more bespoke training session focused on sexual harassment, is something employers should consider exploring further. Sessions can be tailored to meet your specific business needs, with costs based on the length of the training to be delivered and the number of attendees.
Please get in touch with the team if you would like to book a session.
Case Update
Next employees win equal pay claim
Ms M Thandi & Ors v Next Retail Ltd
A six-year campaign by over 3,500 (mainly female) Next retail store employees to achieve pay parity with their (mainly male) warehouse colleagues, has concluded after an Employment Tribunal ruled in their favour. In earlier proceedings, Next conceded that it was reasonable to compare the work of a retail sales consultant with that of a warehouse operator but did not agree that the work undertaken was of equal value. They lost their argument in 2023 when the ET ruled that, following an expert assessment comparing both roles, the roles were of equal value.
In this latest ruling, the ET was concerned with Next’s defence that the pay disparity was due to material factors, namely that the market dictated a different going rate for each role and the business used this to keep costs under control to maintain business viability. Next argued that it was noticeably more difficult to recruit and retain warehouse operators than retail consultants and the fact that the former tended to be male, and the latter female was not relevant. The ET had to consider if this pay disparity was a proportionate means of meeting a legitimate aim and therefore justified differences in pay between retail and warehouse workers.
The ET accepted Next’s argument that the difference in pay was not because of sex and accepted the three factors on which the company relied for its defence, namely market forces, recruitment and retention, and business viability, did not involve less favourable treatment because of sex. However, when the tribunal considered whether these were proportionate, it concluded that they were not holding that they could not be objectively justified. There was no reason why the retail consultants should receive lower basic pay as the business needs were not so great that it justified such an approach, which amounted to indirect sex discrimination as the majority of retail consultants were female. The Tribunal held that Next had financial headroom through sustained profits in order to overcome the discriminatory effect and non-financial benefits (such as a working wardrobe allowance) afforded to retail workers did not make up for that.
The ET’s ruling means that Next is likely to have to pay approximately £30m in back pay divided amongst 3,540 claimants. This ruling will be pored over closely by several other major retailers (mainly supermarkets) that are currently defending similar claims. Although this ruling is case specific, the interesting point is that controlling costs will not necessarily justify unequal pay for workers who carry out different roles but of equal value. Next is expected to appeal so we will keep a close eye on developments.
