Employment Update - September 2024

Key employment and business immigration developments for employers.

Listen to the audio version of this briefing, ready by Katie Good and Rory Patterson

The new UK Government has promised "the biggest upgrade to workers' rights in a generation" with a number of key changes to be introduced under a new Employment Rights Bill. But when can we expect the bill and what will it contain?

In terms of timing, the Government promised to introduce the Employment Rights Bill within 100 days of taking office. The bill is therefore expected to be laid in parliament by 12 October 2024.

According to the King's Speech in July 2024, it will include the following key measures:

• Unfair dismissal: removal of the two-year qualifying service requirement for unfair dismissal claims (employers will still be able to operate probationary periods but it is not year clear how this will work in practice)
• Flexible working: making all roles flexible by default with employers required to accommodate this as far as is reasonable
• Fire and rehire: reforming the law on "fire and rehire" and introducing a revised code of practice to severely restrict the use of the practice
• Zero hours contracts: a new right for zero hours workers to move to a regular hours contract, and receive notice of shifts and compensation for cancellation
• Family rights: making parental leave a day one right, and making it unlawful to dismiss a woman within six months of returning from maternity leave
• Trade unions: simplification of the trade union recognition process and easing of strike ballot requirements

There will also be a new Equality (Race and Disability) Bill which will extend current equal pay rights to ethnic minorities and disabled individuals, and introduce ethnicity and disability pay gap reporting for employers with 250 or more employees.

In its pre-election manifesto, the Labour party proposed other changes to employment law including: creating a single worker status and extending employment rights to all workers; introducing third party harassment; reviewing the family leave framework; and extending the collective redundancy consultation requirements. These measures may take longer to implement, and we are likely to see consultations on these proposals in due course.

EQUAL PAY CLAIMS

According to news reports, more than 3,500 current and former workers at fashion retailer Next have won an equal pay claim against the company.

An Employment Tribunal has ruled that store workers, who are predominantly female, should have been paid the same as warehouse operatives, who are predominantly male. Next argued that the difference in pay was justified because, among other things, market rates for warehouse staff were higher than for retail workers. However, the Employment Tribunal rejected that argument and ruled that the failure to pay the same rates amounted to unlawful sex discrimination. The amount of backpay owed could be worth more than £30million, although Next has said it will appeal.

The ruling is significant, particularly for the retail industry, where similar claims have been brought by workers at Sainsbury's, Asda, Tesco, Morrisons and the Co-op. However, we are also seeing an increase in equal pay claims from workers in white collar jobs and cases like this will likely increase awareness of this type of claim.

A new EU Pay Transparency Directive will introduce requirements across the EU for large employers to publish the gap between male and female pay in their organisation from 2026. Where there is a pay gap of five percent or more which cannot be justified, the employer will be required to conduct a joint equal pay audit with employee representatives. While the directive will not apply in the UK, employers with EU operations may be caught, and these changes will also further increase awareness of equal pay issues.

Employers should therefore ensure they have objective processes for setting rates of pay, which are clearly documented. Employers who are concerned about potential pay issues may also wish to conduct an equal pay audit, to identify any pay discrepancies across the organisation, so that the reasons can be scrutinised and any issues addressed at an early stage.

Immigration Radar

NEW GOVERNMENT IMMIGRATION PLANS

The new Home Secretary, Yvette Cooper MP, has provided a written statement confirming the Government's approach to immigration policy in a number of areas. The statement confirms that the Government plans to bring net migration down and reduce reliance on international recruitment. As part of this, the Government has asked the Migration Advisory Committee ("MAC") to review the IT and engineering sectors, where reliance on international recruitment is high. The MAC will also work with other bodies such as Skills England, the Industrial Strategy Council and the Labour Market Advisory Board, to consider ways of addressing labour market shortages through not only migration but also by addressing local skills shortages.

The Government has also said it supports some of the immigration measures introduced by the previous government including:

• the recent increase to the salary threshold for Skilled Worker visas from £26,200 to £38,700;
• the removal of the 20% salary discount for shortage occupation roles; and
• the restrictions on overseas students and care workers from bringing their family members to the UK.

These measures will all remain in place under the current Government.

MOVE TO DIGITAL VISAS

The UK Government is slowly replacing physical visa documents, including biometric residence permits ("BRPs") with an online record of an individual's immigration status known as an "eVisa". All individuals who hold a BRP card expiring on 31 December 2024 can now create a UKVI account and access their eVisa, without requiring an invitation from UKVI. An eVisa is an online record of an individual's immigration status which also provides the conditions of their employment. Employers are not required to re-check an employee's right to work where they have a BRP card which expires on 31 December 2024, provided that a valid check has been performed and the underlying visa expiry date is being tracked.

EU VISA WAIVER PROGRAMME

The EU is introducing a new visa waiver programme (similar to the ESTA programme which applies in the US). Under the new European Travel Information and Authorisation System (ETIAS), all non-EU nationals travelling to the EU will need to apply online or via a mobile app prior to travel. The ETIAS will be launched on 10 November 2024 and will apply to non-EU nationals (including UK nationals) by summer 2025. It will apply to stays of up to 90 days in every 180 days, while longer stays will require a visa. The ETIAS is expected to cost EUR7 and last for three years. It will initially cover all European Economic Area countries (except for Ireland and Cyprus).

Case Watch

POSITIVE ACTION: WHEN IS IT LAWFUL?

A recent Employment Tribunal ruling highlights the limits of lawful positive action. The claimants in this case were white British police officers. One of the claimants expressed an interest in a Detective Inspector vacancy which had become available but had not yet been advertised. However, a decision was made to move an Asian employee into the role as part of the employer's positive action programme, which aimed to increase the number of ethnic minority officers in senior roles. The employer argued that this amounted to lawful positive action. However, the claimants argued that it constituted direct race discrimination.

The claimants succeeded in their race discrimination claim. The Employment Tribunal ruled that appointing an ethnic minority candidate without advertising the role and without a competitive assessment process went beyond allowable positive action and amounted to unlawful positive discrimination.

DISCRIMINATION: HOW FAR DOES THE PROTECTION GO?

A recent case highlights how wide the protection from discrimination can be.

The case involved claims of indirect discrimination brought by a number of cabin crew employed by British Airways. The claims arose from scheduling changes as a result of a restructuring exercise by the airline. The claimants argued that the changes put employees who lived abroad, who were predominantly non-British nationals, at a substantial disadvantage and therefore amounted to indirect race discrimination. The claimants also argued that the changes put employees with childcare responsibilities, who were predominantly female, at a substantial disadvantage, thus amounting to indirect sex discrimination. However, a number of "piggyback" claims were also brought by employees who did not have the same protected characteristics as the main claimant groups. For example, one of the claimants was a British national who lives in France and who said she suffered the same disadvantage as non-British nationals who live abroad. She therefore argued that she could also bring an indirect race discrimination claim, even though she is British. Similarly, a male employee with childcare responsibilities claimed that he was put at the same disadvantage as female employees with childcare responsibilities, and so argued he could bring an indirect sex discrimination claim, even though he is male.

The Employment Tribunal had to consider whether the British and male claimants could bring claims. It ruled that they could and, on appeal, the Employment Appeal Tribunal (EAT) agreed. It said that an employee can bring an indirect discrimination claim if they suffer the same disadvantage as the disadvantaged group, even if they do not have the same protected characteristic of the group.

New Law

PREVENTING SEXUAL HARASSMENT: ARE YOU DOING ENOUGH?

From 26 October 2024, employers in the UK will come under a new positive duty to take reasonable steps to prevent workplace sexual harassment. The Equality and Human Rights Commission (EHRC) is in the process of updating its technical guidance to explain the new duty and what steps employers should take. Final guidance is not expected until later in September 2024, but it is likely to reflect draft guidance published by the EHRC in July 2024. The guidance recommends (among other things):

• that employers conduct a risk assessment to identify areas where harassment is most likely in the workplace (e.g. power imbalances or alcohol-related social events);
• that employers have a separate policy to deal with sexual harassment as opposed to other forms of harassment (or at least clearly distinguish between the two in their policies);
• employers' policies should be developed in consultation with any recognised trade union or other worker representatives;
• such policies should contain clear examples of sexual harassment which are relevant to the employer's working environment;
• that, as part of the duty to prevent, employers should address harassment of staff by third parties such as customers, clients and suppliers; and
• that employers should provide training for staff, covering how to raise concerns and, for managers, how to handle complaints.

Employers who fail to take reasonable steps to prevent sexual harassment could face an uplift in compensation and/or enforcement action by the EHRC. We have been working with a number of employers to ensure they have appropriate policies and procedures in place by 26 October 2024. For more information, please speak to your usual Employment department contact.

RIGHT TO REQUEST PREDICTABLE WORK

The previous UK Government passed legislation to give workers a new right to request a more predictable work pattern. Under the legislation, workers would be able to make an application to their employer where there is a lack of certainty in the hours or days they are required to work, or the length of their engagement. The employer would have to follow a set process for considering such requests and would only be able to refuse the request on certain grounds (as is the case with the right to request flexible working). This new right was expected to come into effect in around September 2024. However, it seems this has now be superseded by measures planned by the new Government.

The new Government has stated that it will give zero hours workers the right to move onto a contract reflecting the hours they regularly work (not just the right to request one). The contract would be based on the worker's average working hours over the previous 12 weeks. To provide more certainty and fairness, workers would also have a right to receive notice of shifts, and compensation if shifts are cancelled or curtailed. These changes are set to be included in the forthcoming Employment Rights Bill (see above) but there is no confirmed date for when they will come into effect.

FAIR ALLOCATION OF TIPS

On 1 October 2024, new rules on the allocation of tips will come into force. Under the new rules, employers will need to ensure that tips, gratuities and service charges are allocated fairly and transparently to workers and are paid in full, without deduction for administrative charges. Where workers regularly receive tips and other gratuities, the employer will be required to have a written policy on how tips are dealt with. Workers will also be able to request information about an employer's tipping record and bring claims for breach of the rules in an Employment Tribunal. At the same time, a new statutory code of practice on the fair and transparent allocation of tips comes into force. Employers must have regard to the code of practice when designing and implementing their policies and practices, and Employment Tribunals will be able to take the code of practice into account in relevant claims.

Community Engagement

In recent weeks, our team has been involved in a variety of pro bono work for organisations such as Refugees at Home, Ella's and Just Like Us.

Our Work

Since the last Employment Update, our work has included:

• working on next steps for a business after the conclusion of a complex whistleblowing investigation
• defending two tribunal claims made by the same individual and working to establish a timetable for dealing with the issues
• conducting a fact-find investigation into alleged board governance breaches at a City institution
• carrying out a cultural review for a client following whistleblowing allegations
• advising on an investigation led by an HR consultant into harassment allegations
• supporting a client with changes to the management team of a recently acquired business
• advising on a senior executive exit from a private equity fund, and
• advising on multiple data subject access requests raised against a number of connected parties in the context of a potential claim following the dismissal of a senior executive.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.