Top 5 recent workplace developments – January / February 2024
Market Insight 12 February 2024 12 February 2024
UK & Europe
Employment, Pensions & Immigration
This is our selection of recent developments which we think will impact on HR practice.
1. Upcoming legislative changes: Time to update staff handbooks
With a raft of new employment legislation coming into effect from April 2024, employers should update their staff handbooks.
Employers will need to review and update their policies and processes to ensure that they comply with these upcoming employment law reforms:
From April 2024:
- Holiday entitlement and pay – New holiday entitlement and pay rules for irregular hours and part-year workers, for leave years beginning from 1 April 2024
- Carer’s leave – New statutory entitlement to one week’s unpaid leave each year for employees who have a dependant with a long-term care need
6 April 2024:
- Paternity leave – Under the new rules, that apply to babies expected to be born after 6 April 2024 and children expected to be placed for adoption from 6 April 2024, new parents can take statutory paternity leave at any stage in the first year and can split their leave into two separate blocks of one week
- Flexible working - The right to request flexible working will be a day-one right, and enhancements to an employee’s right to request flexible working are being introduced (see below ‘Flexible working requests and Remote/ Hybrid working’)
- Greater redundancy protection – The current protection (that during the maternity leave period, employees must be offered a suitable alternative vacancy, where one exists) is being extended to include pregnant women (from when the employee informs their employer they are expecting a baby) and new parents (until 18 months after the birth)
From July 2024:
- TUPE - New TUPE consultation rules for smaller organisations (50 or fewer employees) and smaller transfers, for transfers taking place from 1 July 2024
From September 2024:
Requesting predictable working pattern - New statutory right for workers and agency workers to request a predictable working pattern
From October 2024:
Sexual harassment - New duty on employers to take reasonable steps to prevent sexual harassment of their employees. The Equality and Human Rights Commission has confirmed that the Sexual harassment and harassment at work: technical guidance and the Employment: Code of Practice will be updated to accompany the new legislation
Look out for developments relating to neonatal care leave and pay, for parents of babies who require specialist neonatal care, which is expected to come into effect in April 2025.
Clyde & Co can assist you with reviewing and updating your policies and processes to ensure compliance with these reforms. Please speak to your usual Clyde & Co contact or a member of the employment team.
2. Flexible working requests and Hybrid/ Remote working
Recent developments include confirmation that the planned flexible working reforms are now due to come into force from 6 April 2024 and an employment tribunal decision concerning remote working.
Flexible working requests
From 6 April 2024, employees will be able to make a flexible working request from day one of their employment. It is expected that other changes to the current flexible working regime, which are set to make it easier for employees to make a request, will be introduced at the same time. These changes include that employees will be able to make two statutory requests within a 12-month period, employers must respond to a request within two months and they must consult with the employee before rejecting a request. See our update Navigating the forthcoming flexible working reforms on the key upcoming changes and ACAS’ consultation on an updated Code of Practice – currently in draft form awaiting parliamentary approval - which aims to create a culture which is more supportive of flexible working arrangements, in addition to reflecting the upcoming changes.
Case update - Remote/ Hybrid working
In the Employment Tribunal case of Wilson v Financial Conduct Authority (FCA), Miss Wilson, a Senior Manager at the FCA, who had been working remotely since the start of the pandemic, made a flexible working request to work entirely remotely after the FCA implemented a policy requiring staff to split their working time 60%:40% for remote/office working. The FCA rejected her request on the basis that, particularly in light of her leadership role, working from home exclusively could have a detrimental impact on performance or quality of output.
The issue for the tribunal to consider was whether or not the FCA’s decision was based on correct facts, i.e. that if Miss Wilson worked from home exclusively this could be detrimental to performance or quality of output. The tribunal concluded that the facts were correct, noting that the decision maker at the FCA had genuinely considered the merits of Miss Wilson’s request and that it was significant that she held a senior position with managerial responsibilities.
The tribunal’s decision was limited to whether the FCA’s reason for refusing the request was based on ‘incorrect facts’. Cases relating to hybrid working issues will be fact-specific – indeed, the judge commented that there won’t be one solution which works for all organisations or even for all roles within one organisation. Employers should ensure they take a balanced and considered approach to remote working requests.
As a result of the upcoming flexible working reforms, employers are likely to see a rise in the number of flexible working requests, and with each request potentially taking more employer time to process.
Employers will need to review and update their flexible working policies and establish clear decision-making processes.
Clyde & Co can assist you in adapting to these changes and ensuring compliance with the reforms.
3. Holiday pay: New guidance
The government has published guidance on holiday entitlement and holiday pay reforms.
The new guidance sets out how holiday pay should be calculated for irregular hours and part-year workers, as well as other holiday pay reforms, the majority of which apply from leave years beginning on or after 1 April 2024 although some apply from 1 January 2024.
In addition to setting out the definition of ‘irregular hours worker’ and ‘part-year worker’, the guidance includes:
- Holiday entitlement calculations where a worker leaves a job part-way through a leave year, requiring a pro-rating of the annual statutory minimum entitlement
- How statutory holiday entitlement is accrued and calculated for irregular hours and part-year workers
- Calculating statutory holiday entitlement accrued by irregular hours and part-year workers while they are on maternity or family-related leave or off sick
- The operation of rolled-up holiday pay, which is permitted for irregular hours and part-year workers
- Calculating holiday pay for irregular hours and part-year workers
The guidance contains worked examples to illustrate how the calculation of holiday entitlement and pay should operate under the new regime.
Employers should update their policies and procedures so that they comply with the new holiday entitlement and holiday pay rules.
4. Termination: Settlement agreements
The Court of Session has ruled that settlement agreements can be used to settle unknown future claims.
Mr Bathgate, the Chief Officer on a ship, accepted voluntary redundancy at the age of 61 and entered into a settlement agreement with Technip UK Limited which provided that its terms were in full and final settlement of his complaints and claims, including age discrimination claims. The agreement entitled him to an “additional payment” calculated by reference to a particular collective agreement, but Technip later refused to pay the “additional payment” because the relevant term in the collective agreement only applied to officers aged under 61.
Mr Bathgate alleged that this refusal to pay the additional payment was age discriminatory. An employment tribunal held that his age discrimination claim had been settled lawfully - but on appeal, the EAT found that this claim could proceed because Mr Bathgate couldn’t compromise his right to bring a claim for age discrimination when he didn’t know of the existence of that claim at the time of the settlement agreement.
However, the Court of Session has now held that a settlement agreement that meets the relevant statutory requirements can be used to settle unknown future employment rights claims under the Equality Act.
Decisions of the Court of Session are not technically binding in England and Wales, but are highly persuasive, so this case provides a good indication of how such claims will be decided by English employment tribunals and the EAT.
Employers will welcome this decision which provides greater clarity on relying on settlement agreements to waive future claims. That said, it is advisable for employers to include as much detail as possible in settlement agreements about the specific complaints being settled, and to include some form of warranty to the effect that the employee has no intention of bringing future claims.
5. Whistleblowing: Acas Code on Disciplinary and Grievance Procedures
The EAT made findings in relation to the application of the Acas Code on Disciplinary and Grievance Procedures to a whistleblowing dismissal and compensation awards.
Mr Zabelin, the Group Chief Investment Officer for SPI Spirits, agreed a 30% pay cut from April to June 2020 because of the effects of the pandemic on the business. When SPI said the pay cut was being extended to at least 1 September 2020, Mr Zabelin raised various issues in an email and at a meeting in early June 2020, including alleging that the pandemic was being used as an excuse to cut pay without transparency and that employees were being intimidated. There was also a discussion about changes to bonuses. Mr Zabelin subsequently had a telephone conversation with Mr Shefler, the majority shareholder in the group, who suggested Mr Zabelin should resign if he didn’t agree to proposed changes to bonuses. When he queried why he should resign, Mr Shefler dismissed him. Mr Zabelin then brought claims for automatic unfair dismissal and detriment on the grounds of having made whistleblowing protected disclosures including regarding reductions to his pay and bonus and staff welfare.
The Acas Code of Practice on disciplinary and grievance procedures sets out minimum standards required when managing disciplinaries and grievances – and failure to follow this Code can be taken into account when assessing liability and compensation. A grievance must be in writing and set out the nature of the grievance. In claims where the Code applies, if there has been any unreasonable failure to follow it, the tribunal has a discretion to increase (‘uplift’) the compensation award where the employer is at fault, or decrease if the employee is at fault, by up to 25%.
The tribunal upheld Mr Zabelin’s claims. SPI appealed in relation to the compensation awarded, arguing that provisions in his employment contract and other agreements meant that his compensation should be capped at £270,000. The EAT concluded that, even if the contractual clauses had the meaning contended by SPI, the outcome they sought to achieve was an unenforceable contractual cap on the tribunal's awards which was void under employment legislation.
The EAT also found that Mr Zabelin’s concerns were set out in his email, and although he did not refer to the protected disclosures, these were closely related and the underlying nature of his grievance did not change – and the Code therefore applied. The tribunal was also entitled to award the uplift as the protected disclosures could constitute culpable behaviour by SPI, and the disciplinary provisions in the Code were therefore engaged.
A grievance must be made in writing but if new grievances subsequently arise, they do not each have to be put in writing for the Acas Code to be engaged, unless there is a ‘material change’ in the nature or scope of the complaint.
The compensation uplift for an employer’s failure to comply with the Code may also be applied to awards made against individuals if they were responsible for that failure. This will apply in claims such as this one, where an employee brings a claim against an individual as well as their employer, and the individual is responsible for the failure to comply with the Code.
Contractual provisions in employment contracts and settlement agreements will not protect employers from, or limit, uncapped awards in whistleblowing claims.