Employment Law Update

We have set out below a roundup of recent employment developments:

Autumn Statement – rise in National Living Wage (NLW) and National Minimum Wage (NMW)

The Government has announced that from 1 April 2023 there will be:

  1. a 92p, or 9.7 percent, increase to the NLW for those aged 23 and over (from £9.50 to £10.42 per hour);
  2. a £1, or 10.9 per cent, increase for those aged 21–22 (from £9.18 to £10.18 per hour). (This increase is intended to narrow the gap with the NLW and put this age group on course to receive the full NLW by 2024);
  3. a 66p, or 9.7 per cent, increase for those aged 18–20 (from £6.83 to £7.49 per hour);
  4. a 47p, or 9.7 per cent, increase for those aged 16–17 (from £4.81 to £5.28 per hour); and
  5. a 47p increase in the apprentice rate (from £4.81 to £5.28 per hour).

The Exclusivity Terms for Zero Hours Workers (Unenforceability and Redress) Regulations 2022

The Exclusivity Terms for Zero Hours Workers (Unenforceability and Redress) Regulations 2022 come into force on 5 December 2022.

Exclusivity terms have been unenforceable in zero hours’ contracts since 2015. These are terms that prevent an individual from working for another employer, or working for another employer without consent.

These new regulations extend the protection to employees and workers working under contracts which entitle them to net average weekly wages that do not exceed the lower earnings limit (£123 per week for 2022/2023) with the aim of ensuring that low-income workers are also not restricted by exclusivity terms.

As well as making such exclusivity terms unenforceable, under the regulations, it is automatically unfair to dismiss an employee if the reason or principal reason for the dismissal is that the employee breached an exclusivity term, and there is no qualifying period of employment to bring this claim. In addition, workers are protected from detriment if they breach an exclusivity term in their contract. Where an employment tribunal finds that a worker has suffered a detriment, it may make a declaration and award such compensation as it considers just and equitable up to an amount equal to the unfair dismissal basic and compensatory award.

If you require any assistance with reviewing contracts to take account of the new regulations, we are able to assist.

Government backs new family friendly legislation

The Government has announced that it will support:

  1. The Protection from Redundancy (Pregnancy and Family Leave) Bill. The Bill will amend the Employment Rights Act 1996 to enable the Secretary of State to make regulations providing protection against redundancy “during or after” an individual taking the relevant period of family leave.  Under current rules, before making an employee on maternity leave, shared parental leave or adoption leave redundant, employers are obliged to offer them a suitable alternative vacancy where one exists in priority to anyone else who is provisionally selected for redundancy. The new bill will extend protection to apply to pregnant women before they start maternity leave and after they return to work. It will also protect new parents returning to work from adoption or shared parental leave. The government believes this will “shield new parents and expectant mothers from workplace discrimination, offering them greater job security at an important time in their lives”.  It is not currently clear when the Bill will become law, but this is expected sometime next year.
  2. The Carer’s Leave Bill. The Bill will introduce a new and flexible entitlement of one week’s unpaid leave per year for employees who are providing or arranging care. It will be available to eligible employees from the first day of their employment. They will be able to take the leave flexibly to suit their caring responsibilities and will not need to provide evidence of how the leave is used or who it will be used for which, it is hoped, should ensure a smooth process. Employees taking their carer’s leave entitlement will be subject to the same employment protections that are associated with other forms of family-related leave, meaning they will be protected from dismissal or any detriment as a result of having taken time off.  Again, it is not currently clear when the Bill will become law, but this is expected sometime next year.

ACAS issues new advice on menopause in the workplace and suspension

ACAS has recently issued new advice for employers on suspension at work.  In essence the advice is that an employer should consider each situation carefully before deciding whether to suspend someone and that it is usually best to only use suspension in serious circumstances where there are no alternatives.  The advice can be viewed on the ACAS website.  If you have any queries about whether suspension is appropriate in the circumstances, we are able to assist.

ACAS has also reported on the outcome of a survey in which it commissioned YouGov to ask British businesses how well equipped they felt their workplaces were to support women going through the menopause. Responses indicated that 33% considered that they were either not that well equipped or not equipped at all.  As a result, ACAS has advised that employers:

  1. Develop a menopause policy that explains how the menopause can affect people differently and what support is available.
  2. Provide awareness training for managers on the menopause and how to deal with it sensitively and fairly.
  3. Consider making practical changes at work to help staff manage their symptoms.

We are able to assist with formulating policies and procedures to enable employers to properly address issues relating to employees going through the menopause.

Unfair dismissal and redundancy selection – Mogane v Bradford Teaching Hospitals NHS Foundation Trust.

The Employment Appeal Tribunal has recently held that a tribunal was wrong to find the redundancy of a nurse fair, where the sole selection criterion used was that her fixed-term contract ended before that of her colleague, putting her in a selection pool of one, where no consultation had taken place prior to that decision.

Ms Mogane and another nurse in a similar role were employed on a series of fixed-term contracts. Ms Mogane was invited to a meeting at which she was told about the financial difficulties the Trust was facing. Shortly after this, a decision was taken that Ms Mogane should be dismissed for redundancy as her fixed-term contract expired first. A redundancy consultation process began, which included consultation regarding the possibility of alternative employment.  No alternative was found and she was dismissed.

The EAT (HHJ Beard) noted that consultation is a fundamental aspect of a fair redundancy procedure.  In order that consultation is genuine and meaningful, consultation must take place at a formative stage when an employee can still potentially influence the outcome.

Where the choice of selection criteria has the practical result that the selection for redundancy is made by that decision itself, consultation should take place before that decision is made.  While a pool of one can be fair in appropriate circumstances, it should not be considered where there is more than one employee doing the same or a similar role without prior consultation.

Here, the Trust’s decision to dismiss Ms Mogane as her contract was the first up for renewal immediately identified her as the person to be dismissed, before any meetings or consultation took place with her. The tribunal failed to explain why it was reasonable to make that decision without consultation. The selection of Ms Mogane was arbitrary and related solely to the date on which her fixed-term contract ended. Given that she was effectively chosen for dismissal before any consultation took place, the EAT substituted a finding that she was unfairly dismissed.  It would have been appropriate for the Trust to place both nurses doing the same role in a selection pool of 2 and use fair and objective criteria to select one for redundancy.

It is important to note that this decision does not necessarily rule out selection pools of one.  However, the employer must be alert to arguments that by using a selection pool of one, the decision to dismiss is essentially made prior to any consultation taking place.  We are able to assist with any queries that you may have regarding redundancy and unfair dismissal.

Changes for Overseas Entities

As an employer you may own or manage a company (or other separate legal entity) that is governed by the law of a country outside of the UK.  If so, you ought to be aware of changes coming into force which may affect your business.

If the overseas entity has had any interest in UK land since 28 February 2022 or has plans to purchase an interest in UK land you may need to register the Overseas Entity and its beneficial owners on the Register of Overseas Entities (ROE) before 31 January 2023 to avoid committing a criminal office and daily fines of up to £2,500.

If you have any queries relating to this matter please contact Peter Kouwenberg (Partner; Head of Commercial; peter.kouwenberg@taylorwalton.co.uk; 01582 390411).