In this Employment Law Update, Tom Evans outlines several recent government consultations, a draft bill for minimum service levels in trade union strikes, April rates increases, as well as case law updates on Covid-19 dismissals and marital status discrimination.
1. Harpur Trust Government Consultation
The government has opened a consultation to address the complexity around holiday pay after last year’s Harpur Trust v Brazel ruling from July last year.
In that ruling, the Supreme Court confirmed that part-year workers should receive 5.6 weeks’ statutory holiday pay despite not working a full year. This meant that any worker with a continuing contract throughout the year, but who only works for certain periods such as term time, must have their holiday pay calculated in the same way as employees who work the full year, rather than pro-rated, which could be argued is unfair based on them proportionately having more holiday entitlement via this ruling. See our October 2022 newsletter for more details on the case.
The consultation has been issued to consider the effect the judgment has had across different sectors and look at any disparities created as a result. The government have said they want “to ensure that holiday pay and entitlement is directly proportionate to the time they spend working”.
The consultation proposes a 52-week holiday entitlement fixed (not rolling) reference period for part-year and irregular hours workers, based on the proportion of time spent working over the previous 52-week period, which importantly includes weeks where no wages are received. The effect would be that holiday pay will be pro-rated as for year-round staff.
It also suggests a return to a position which allows employers to multiply the total hours worked by 12.07% (equivalent to 5.6/ 46.4 expressed as a percentage) to calculate holiday entitlement for variable hour workers.
As it stands, the Supreme Court decision remains binding law on holiday accrual and pay and legislation will be required to alter this. Employers who have amended their holiday entitlement and pay calculations in line with the Harpur Trust v Brazel decision should continue to use these calculations. Those employers who have not already taken steps to amend their holiday entitlement and pay calculations may wish to wait until the outcome of this consultation is heard. However, this decision increases the risk of claims being brought against them.
The consultation will now run until 9 March 2023, where individuals or groups with an interest can take part.
2. Strikes (Minimum Service Levels) Bill
On the 10 January 2023, in response to the recent series of strikes across multiple industries the government introduced the Strikes (Minimum Service Levels) Bill in the House of Commons.
If enacted, the Secretary of State for Business, Energy and Industrial Strategy will have the power to set minimum service levels during strike action in the following industries; health care, fire and rescue, education, transport, decommissioning of nuclear installations and management of radioactive waste and spent fuel, and border security.
The UK currently has no minimum service levels for strike action, unlike other European countries such as France, Italy and Spain. In its current form the Bill does not define minimum service levels. The Bill states that, if enacted, the minimum service regulations will provide this detail.
Under the draft bill, in order to continue a level of service, employers will have the right to identity employees that are required to work during strike action to meet the minimum service levels. These employees will be given at least seven days’ notice. Employers will not be permitted to serve work notices to more employees than is necessary. If an employee takes part in strike action despite being served a work notice, they will have their right to an automatic unfair dismissal claim waived. Currently, employees who take part in strikes are protected by legislation from being dismissed for taking part in in strike action.
The bill also places additional requirements on Trade Unions, namely that they are to take steps to ensure employee comply with a served work notices. If Trade Unions fail to comply with their obligations under the proposed legislation they will lose their immunity from damages.
Unsurprising the bill has been met with criticism from Trade Unions who have argued that the bill is “anti-strike”. The government have explained that the rational for the introduction of the bill is “to ensure that striking workers don’t put the public’s lives at risk and prevent people getting to work, accessing healthcare, and safely going about their daily lives”. Business Secretary Grant Shapps said that whilst the government “absolutely believe in the ability to strike, [they] are duty-bound to protect the lives and livelihoods of the British people”.
The Bill had its first reading on 10 January 2023 and is currently at the second reading in the House of Commons. Updates will follow.
3. Government seeking to ‘crackdown’ on ‘fire and rehire’ practices
On 24 January 2023 the Government launched a Draft Code of Practice on dismissal and re-engagement. A consultation will now run for 12 weeks, where individuals or groups with an interest can take part.
The code comes after several high-profile cases involving a lack of consultation by employers, the most publicised being the redundancy of almost 800 P&O Ferries employees in 2022 without any consultation. The motive for this draft code is to ‘crackdown’ on the controversial dismissal tactic of ‘fire and rehire’.
What is the Fire and Rehire practice?
‘Fire and rehire’ refers to when employers terminate an employee’s contract of employment and re-engages them on new terms as a means to change employees’ terms and conditions unilaterally where consent cannot be obtained from the employees. These new terms are often less favourable for the employee than those in their previous contract of employment.
The code’s proposals
The code of practice will set out an employers’ responsibilities when seeking to change the contractual terms of employees’ contracts of employment. These responsibilities will include a duty to consult with the workforce and/or unions in a fair and transparent way.
The code recommends that an employer should actively re-examine its business strategy if agreement cannot be reached over changes to terms. Furthermore, the code suggests that if an employer wishes to implement several changes to the terms, that they be implemented over a period of time.
The code also recommends sharing of information which only currently applies when collective consultation obligations are triggered. Currently, collective consultation obligations are triggered when an employer is proposing 20 or more redundancies.
The code recommends that where changes are made, they should be kept under review so that original terms can be re-introduced if the reason for the amendment of the term ceases to exist.
In addition, once the code is in force, Tribunal ’s will be able to take the code into account when considering cases. In cases where an employer has failed to comply with the statutory code, Tribunals will have the power to apply 25% uplift to an employee’s awarded compensation.
4. Menopause will not become the tenth protected characteristic under Equality Act 2010
On 24 January 2023 the government rejected committee recommendations to make menopause a protected characteristic under the Equality Act 2010 and to pilot a workplace menopause leave policy.
Menopause Employment Tribunal claims
Menopause is not a protected characteristic under the Equality Act 2010. However, if an employee is put at a disadvantage and treated less favourably because of their menopause symptoms, they can bring a claim for discrimination under several protected characteristics under, including age, disability and sex.
Successful menopause claims
In Best v Embark on Raw Ltd (2022) a Tribunal found that when Mrs Best’s manager asked her whether she was menopausal, Mrs Best had suffered harassment under s26 of the Equality Act 2010 on the grounds of sex.
In Merchant v BT plc (2012), Ms Merchant was suffering with menopausal symptoms which in particular affected her concentration and due to this her work performance deceased. Despite receiving evidence from her GP, her employer failed to make a referral to for occupational health assessment. Ms Merchant was dismissed due to her under performance. The Tribunal found that the same treatment would not have been afforded to a male colleague who had a medical condition that affected his concentration. Therefore, the Tribunal held that BT had directly discriminated against Ms Merchant on the grounds of sex.
In A v Bonmarche Ltd, the ET upheld claims of sex and age harassment. The claimant was called a “dinosaur” and on another occasion criticised and her mistake being related to her being menopausal. Her manager also refused the claimant’s request to adjust the temperature in the workplace.
Advice for Employers
Although the government has confirmed that menopause will not become a new protected characteristic, claimants may still have grounds for discrimination claims under the current protected characteristics of sex, age and disability.
To avoid claims of these natures, employers can make these following suggested steps.
- Pro-actively take time to understand the symptoms of menopause. Symptoms vary in their nature and intensity and include, hot flushes, difficulty sleeping and problems with memory and concentration.
- In light of the above symptoms, make reasonable adjustments to help assist those suffering with their symptoms, such as providing fans, more frequent rest breaks and a relaxed dress code.
- Be open to requests for flexible working. As mentioned in our previous newsletter, In response to the “Making Flexible Working The Default” consultation the government are proposing to introduce secondary legislation in relation to flexible working requests.
5. National Minimum Wage, SMP and SSP Rates 2023
On 17th November 2022, the new National Minimum Wage rates were announced for the tax year beginning 1 April 2023. The rates are as follows:
- Workers aged 23 and over: £10.42 an hour (National Living Wage)
- Workers aged 21-22: £10.18 an hour
- Development rate for workers aged 18-20: £7.49 an hour
- Young workers rate for workers aged 16-17: £5.28 an hour
- Apprentice rate: £5.28 an hour.
The accommodation offset will be £9.10 per day (previously £8.70).
The new rate from 3 April 2023 for statutory maternity, paternity, adoption, shared parental and parental bereavement pay will increase to £172.48 per week (previously £156.66).
The new rate from 6 April 2023 for statutory sick pay will increase to £109.40 per week (previously £99.35).
6. Court of Appeal upholds decision that employee’s dismissal for refusing to return to work due to covid-19 concerns was not unfair
In Rodgers v Leeds Laser Cutting, the Court of Appeal upheld the Tribunal’s judgment that an employee, who was dismissed for refusing to work due to Covid-19-related concerns, was not automatically unfairly dismissed.
This is the first case relating to Covid-19 and s100(1)(d) of the Employment Rights Act 1996 (ERA) to reach the Court of Appeal and should reassures employers who put Covid-19 safety measures in place, that they can successfully defend claims made under s100(1)(d) and (e) ERA.
Section 100 Employment Rights Act 1996
Section 100 ERA provides that an employee is unfairly dismissed if the reason for their dismissal due to the following instances:
- ‘in circumstances of danger which the employee reasonably believed to be serious and imminent and which he could not reasonably have been expected to avert, he left (or proposed to leave) or (while the danger persisted) refused to return to his place of work or any dangerous part of his place of work’ (s100(1)(d) ERA), and
- ‘in circumstances of danger which the employee reasonably believed to be serious and imminent, he took (or proposed to take) appropriate steps to protect himself or other persons from the danger’ (s100(1)(e) ERA).
Unlike an ordinary unfair dismissal claim, there is no length of continuous service requirement to bring a claim of automatic unfair dismissal under s100 ERA.
At the beginning of the first national lockdown in March 2020, Leeds Laser Cutting (LLC) carried out a risk assessment to put in place safety measures to protect their employees. These safety measures included providing masks, social distancing measures and staggered start/finish times.
Mr Rodgers was employed as laser operator for LLC. He had young children, one of which has a medical condition making them more vulnerable. Shortly after LLC put their Covid-19 safety measures in place, Mr Rodgers informed his manager that he would not be attending his workplace ‘until the lockdown has eased’ due to his concerns about infecting his vulnerable children. Mr Rodgers did not communicate any workplace dangers to his manger. There was no further communication between the parties until LLC dismissed Mr Rodgers a month later due to him being absent without leave or explanation.
Following the Mr Rodgers’ dismissal, he was unable to raise a claim of ordinary unfair dismissal as he did not have the required 2 years’ service. Instead, he brought a claim of automatic unfair dismissal under Section 100(1)(d) of the Employment Rights Act 1996 (ERA).
Employment Tribunal & Employment Appeal Tribunal (EAT) decisions
The Tribunal dismissed Mr Rodgers’ claim. Concluding that “the claimant’s decision to stay off work entirely was not directly linked to his working conditions; rather, his concerns about the virus were general ones, which were not directly attributable to the workplace.” Furthermore, Mr Rodgers had not taken any steps to try and avert the danger, nor had he raised any concerns with his manager.
The Tribunal described Mr Rodgers’ views as “contradictory”, as despite his concerns regarding Covid-19 he had breached self-isolation rules and also took up alternative employment in the hospitality industry. All of which did not support his argument that his workplace was a circumstance of danger which he believed to be serious and imminent. To accept Mr Rodgers’ argument would be to accept that the existence of the Covid-19 created circumstances of serious and imminent danger. Which would lead to any employee being able to rely on s.100 to leave the workplace.
The EAT upheld the Tribunal’s ruling. Mr Rodgers appealed to the Court of Appeal.
The Court of Appeal decision
The Court of Appeal upheld the Tribunal’s decision and dismissed Mr Rodgers’ appeal. It was held that there were no circumstances of danger that Mr Rodgers reasonably believed to be serious and imminent.
The Court of Appeal set out 5 questions that a Tribunal has to decide in cases under s100(1)(d):
- “Did the employee believe that there were circumstances of serious and imminent danger at the workplace? If so:
- Was that belief reasonable? If so:
- Could they reasonably have averted that danger? If not:
- Did they leave, or propose to leave or refuse to return to, the workplace, or the relevant part, because of the (perceived) serious and imminent danger? If so:
- Was that the reason (or principal reason) for the dismissal?”
7. Marital Status Discrimination
In Ellis v Bacon & Advanced Fire Solutions, a director who was dismissed whilst divorcing a fellow director, was found by the Employment Appeal Tribunal (“EAT”) not to have been subjected to marital discrimination.
The EAT’s judgement in this case highlights the limited nature of the protection for discrimination on ground of marital status. The protection under the Equality Act 2010 is for adverse treatment because of the fact that they are married, not because to who they are married to.
Ms Bacon was employed by Advanced Fire Solutions from 2008. In 2008 Ms Bacon became a director and shareholder and married fellow director, Mr Bacon. In August 2017 Ms Bacon commenced divorce proceedings against Mr Bacon. Mr Bacon was the majority shareholder of the company.
False allegations were made against Ms Bacon that she had misused company IT. Ms Bacon was suspended from her role with her directorship removed and her dividends unpaid. During this time the managing director, Mr Ellis reported Ms Bacon to the police. Following her suspension Ms Bacon was dismissed. Ms Bacon brought claims of direct discrimination on the grounds of sex, marriage and civil partnership and unfair dismissal.
Marriage and civil partnership discrimination
Marriage and civil partnership are one of the nine protected characteristics under the Equality Act 2010. There are three types of marriage and civil partnership discrimination claims;
- Direct discrimination – where an employee is treated less favourably because they are married or in a civil partnership,
- Indirect discrimination – where an employer has a practice, policy or rule in place which puts employees who are married or in a civil partnership at a particular disadvantage, and
- Victimisation – where an employee is subjected to a detriment because primarily they have alleged someone has committed an act of marriage or civil partnership discrimination, brought a claim of marriage or civil partnership discrimination or given evidence in respect of such proceedings. .
Employment Tribunal decision
Ms Bacon claimed that Mr Ellis had taken Mr Bacon’s side in relation to their marital dispute and that her dismissal was based on false allegations. The Tribunal found in favour of Ms Bacon and ruled she had been treated unfavourably and discriminated against her because she was married.
Employment Appeal Tribunal decision
The EAT found that the Tribunal had erred in law in their decision that Ms Bacon had been discriminated against due to her marital status. The EAT’s judgement explained that the importance was to determine whether a claimant had received less favourable treatment due to the fact they were married, not because of who they were married to.
Furthermore, the EAT found that the “ET had failed to construct the appropriate comparator, namely someone in a close relationship with Mr Bacon but not married to him and ask itself whether such a person would have been treated differently.”