There have been a number of employment law developments over the last few months. In this roundup we feature an overview of significant legislative developments, an interesting TUPE-related case summary, and the Labour Party’s proposal to introduce a new employment rights bill in the event it wins at the next general election.
New flexible working law
The Employment Relations (Flexible Working) Act (the “Act”) became law on 20 July. The provisions of the Act will require separate regulations to amend the current flexible working regime, and it is expected that these will take effect 12 months after the Act (i.e. next summer).
Employers are advised to prepare early for the changes, which include:
- A right to request flexible working from day one of employment (with the current 26 weeks’ service requirement removed). Note that this is not the same as a right to work flexibly. While this change is not covered by the Act, it is expected through standalone regulations.
- A right to make two flexible requests in any 12-month period, rather than the current one request.
- A reduction in the period that employers have to respond to a request from three months to two months.
- A requirement that the employer consult with the employee making the flexible working request on alternative options before rejecting the request if it cannot be accommodated by the business.
Employers can, of course, still reject a request, and the government has decided that no changes should be made to the eight business grounds for rejecting a request, as set out in the existing flexible working legislation.
Existing flexible working policies will need to be updated to reflect these upcoming legal changes, and staff should be made aware and receive training. Policies should also take account of the good practice recommendations in the ACAS Code of Practice on flexible working, which will be updated in due course following the closure of a consultation on 6 September.
The requirement to consult with an employee will also need to be factored into an employer’s processes for considering a flexible working request, and the tighter timeframe for considering requests should be kept front of mind.
Right To Request Predictable Work Patterns
Earlier this year we highlighted the government’s intention to back the Workers (Predictable Terms and Conditions) Bill. This Private Members’ Bill is now in the final stages in the House of Lords, following a third reading on 18 September 2023, so it is likely to become law soon. It reflects the government’s commitment from The Good Work Plan in 2018 to address the issue of one-sided flexibility where a worker has no guarantee of work but is expected to be available at very short notice when required.
The Bill will introduce a right for workers (including agency workers) to request a more predictable working pattern, including in relation to their hours, working days and the duration of their engagement or employment. The framework for this new statutory right will broadly reflect the current flexible working regime.
Parental leave consultation
The government has published its response to a consultation on reforms to the existing parental leave and pay regime, which aimed to consider ways to create greater equality between parents. There is little in the way of substantive change proposed, with the focus primarily on amending the right to paternity leave in the following key ways:
- Employed fathers/partners will be able to take the current two-week paternity leave in two separate blocks of one week (rather than in one block at present).
- Employed fathers/partners will be able to take their paternity leave at any time in the first year (rather than just in the first eight weeks).
- Only 28 days’ notice of the proposed paternity leave dates will need to be given, with notice of entitlement to be provided 15 weeks before the child’s birth.
No new third-party harassment protection
The Worker Protection (Amendment of Equality Act 2010) Bill has been progressing through Parliament this year and is expected to come into force one year after it passes into law. The original draft of the Bill contained a clause reintroducing employers’ liability for third party harassment of employees, for example by customers and clients.
However, following a debate in the House of Lords in July which highlighted concerns about the implications for free speech, this clause has now been removed. As such, there will be no new legal liability on employers in relation to third party harassment (as has been the case since the original law was repealed in 2013).
However, the Bill still contains a new specific duty on employers to take reasonable steps (a diluted version of the original draft of the Bill, which required all reasonable steps) to prevent sexual harassment of employees, which you can read about in our earlier HRLaw article here.
New code of practice on diversity, equality and inclusion (DEI)
The British Standards Institute (BSI) has published a new code of practice aimed at supporting employers to build a more diverse and inclusive culture. It offers practical guidance on implementing a DEI framework, covering aspects such as recruitment, employee behaviour, and supporting underrepresented groups.
TUPE: employee rights under a collateral contract transferred
In Ponticelli Ltd v Gallagher, the Court of Session in Scotland held that an employee’s rights to participate in his employer’s share incentive plan arose “in connection with” his contract of employment through a partnership share agreement. As such, Regulation 4(2)(a) of TUPE 2006 applied to automatically transfer the existing employer’s duties and liabilities in relation to the share incentive plan to the new employer.
The TUPE provision was wide enough to cover various obligations which were not contained within or “under” the contract of employment and applied to the rights under the share incentive scheme because they formed an integral part of the employee’s financial package.
While beneficial to employees, this decision causes practical problems for employers who find themselves in similar circumstances with a legal obligation to put in place a share plan of substantial equivalence. Ponticelli’s had made efforts to compensate the claimant with a one-off payment equivalent to twice his average contributions to the share incentive plan over the previous two years, but the offer was rejected by the claimant. The limited caselaw guidance as to the meaning of substantial equivalence in this context means that employers may find it a tricky and costly burden to comply with.
Labour Party “guarantee” a new employment rights bill
In her speech to the TUC party conference in Liverpool on 12 September 2023, Angela Rayner gave a “cast iron commitment” that Labour will introduce a new employment rights bill within 100 days if the party wins the next general election. Key policy commitments referred to previously and, in the speech, include:
- A ban on fire and rehire practices by employers so that employers would be prevented from dismissing workers for failing to agree to less favourable changes to their employment contract. This would be achieved through enhancing employers’ information and consultation obligations and amending unfair dismissal protection. Further detail on the practice of fire and rehire is available in our HRLaw article from earlier this year, available here.
- Introducing “Day 1” basic employment rights for new employees. This would be achieved by removing qualifying periods which must currently be satisfied before employees become eligible for certain employment rights. Examples cited by Labour include parental leave (for which an employee requires at least one year’s prior service) and unfair dismissal (for which two years’ prior service is generally required before a claim can be brought).
- A strengthened statutory sick pay entitlement, making it available to all workers (including the lowest earners).
- An increase to the National Living Wage.
- A ban on zero-hour contracts, which the Labour Party views as exploitative, with the right to request a contract which reflects the hours worked after 12 weeks.
- A boost to collective bargaining processes across certain sectors, starting with a Fair Pay Agreement in adult social care. This would appear to be industry-wide and not specific to a particular employer.
- Updating trade union laws. Blacklisting by the use of predictive technology will be outlawed and the 2016 Trade Union Act (which requires 50% of union members to vote for strike action) and the Strikes (Minimum Service Levels) Act 2023, which gives the government new powers to specify minimum service levels on public services, will both be repealed.
- A new legal framework to provide trade unions with a reasonable right to access workplaces to organise, meet and represent their members, and to contact remote workers.
- Introducing a new “right to switch off” from emails, calls and messages received from employers outside of working hours, to reflect similar practices that already exist in certain EU countries.
The announcement was made as part of Labour’s wider “New Deal for Working People”, published last year, and follows criticism from trade unions that the party has diluted its earlier commitments to improve workers’ rights.
We will analyse the likely impact of such proposals as further details become available in due course.
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