Employment Law Alert UK - May 2023

Diversity and inclusion and ESG

SRA introduces new rules on bullying, stress and discrimination in law firms. On 2 May 2023 the SRA published new guidance for individuals and firms to tackle reports of unsupportive, bullying or toxic work environments in some law firms and to help support the wellbeing of staff. On 4 April 2023 the LSB gave permission to the SRA to implement the new rules. The rules were formulated in response to a consultation which took place during 2022. The guidance notes that the consultation found evidence that solicitors with protected characteristics experienced higher levels of unfair treatment at work. The guidance imposes an explicit requirement to treat colleagues "fairly and with respect". It requires managers to actively challenge unfair treatment and for firms to put in place effective systems and controls for individuals to raise concerns and for those concerns to be effectively dealt with.

EBA launches consultation on benchmarking diversity practices. On 24 April 2023 the European Banking Authority published a consultation on draft guidelines for the benchmarking of diversity practices under the CRD IV Directive and the Investment Firms Directive. The guidelines would be intended to cover the information which should be collected from credit institutions and investment firms about diversity practices (i.e. diversity policies and the gender pay gap of management bodies). The hope is that effective benchmarking would allow for the monitoring of diversity trends over time. The consultation closes on 24 July 2023.

ACAS publishes guidance on reasonable adjustments for mental health. On 17 April 2023 ACAS published advice on reasonable adjustments for mental health. The guidance explores examples of reasonable adjustments for mental health, how these can be requested and responded to and how to manage and support employees with reasonable adjustments in place. Employers are encouraged to make reasonable adjustments even if the relevant individual is not disabled. The guidance also advocates employers and employees working together to agree and review reasonable adjustments over time.

EHRC recommend that sex is defined as biological sex in the Equality Act 2010. On 4 April 2023 the EHRC published a letter to the Minister for Women and Equalities recommending that the government consider defining 'sex' under the Equality Act 2010 to mean 'biological sex'. The EHRC notes that society has evolved considerably and that the use of the terms 'sex' and 'gender' are increasingly used interchangeably. This means that the protection offered under the Equality Act is unclear and so it can be hard to apply the law. The EHRC considers that a biological definition of sex would create legal clarity in relation to pregnancy and maternity, freedom of association for lesbians and gay men, freedom of association for women and men, positive action, occupational requirements, single sex and separate sex services, sport, and data collection while being potentially disadvantageous in relation to equal pay, direct sex discrimination and indirect sex discrimination. Given the complexities of the issues involved the EHRC advocates broader consideration of the issues, including by way of consultation and advocates for the public debate on these issues to be more informed and on a constructive basis. This comes as it is announced that Scottish ministers are intending to lodge a petition for judicial review of the block of the Gender Recognition Reform (Scotland) Bill earlier this year.

Government publishes guidance on positive action in the workplace and ethnicity pay reporting. On 17 April 2023 the government issued guidance for employers on positive action in the workplace. The guidance provides a checklist and advice for employers wishing to take positive action, whilst highlighting that it is a good idea to take legal advice before deciding on a positive action programme. The guidance on ethnicity pay reporting is intended to assist employers who wish to analyse and report on their ethnicity pay data. It suggests a consistent approach to measuring pay data so as to allow for meaningful comparisons for those employers who wish to do so voluntarily.

European Council adopts EU Directive on Pay Transparency. On 24 April 2023 the European Council formally adopted the pay transparency directive which aims to address the gender pay gap across Europe using measures to ensure pay transparency and to improve access to justice for pay discrimination. The directive will now be published in the Official Journal of the European Union and enter into force 20 days later. Member states will have three years to implement the directive.

Employee relations

Select committee makes recommendations to the government on workers' rights. On 18 April 2023 the Business, Energy and Industrial Strategy Committee published a report on post pandemic economic growth in the UK labour markets which includes recommendations to the government on workers' rights. The report notes that the government has indicated its support for: the Employment Relations (Flexible Working) Bill; the Protection from Redundancy (Pregnancy and Family Leave) Bill; the Neonatal Care (Leave and Pay) Bill; the Workers (Predictable Terms and Conditions) Bill and the Carer’s Leave Bill. It also makes a number of recommendations including that the government should assess the prevalence of pregnancy discrimination in the workplace (and consider additional protective measures), consider providing for more flexible working arrangements and introduce a single enforcement body.

ACAS advice on managing stress at work. ACAS has published new guidance for employers on managing stress in the workplace following a YouGov survey which found that a third of employees do not think that their employers are effective at managing workplace stress. The guidance provides examples of causes of stress both inside and outside work and includes key indicators of stress (i.e. poor concentration and finding it hard to make decisions) which managers should look for amongst their employees. The guidance summarises the law on work-related stress, referring to both the health & safety obligations of employers and the potential for disability discrimination. It also provides tips on supporting employees with work-related stress and preventing work-related stress in the first place.

LSB issues call for evidence on NDAs. On 2 May 2023 the LSB issued a call for evidence on the misuse of non-disclosure agreements and the role that lawyers can play in this. The LSB is seeking to understand the scale, extent and nature of the misuse to consider whether new regulations could assist in addressing the misuse of NDAs. The call for evidence will run from 2 May 2023 to 14 July 2023.

Business protection

Court of Appeal upholds injunction on basis that non-compete clause could be enforceable when benefit for group companies severed. The Court of Appeal has upheld the decision of the High Court that it was permissible to sever part of a non-compete clause (to remove the benefit to companies in the group), and that after this severance, the clause was not too wide to be enforceable. The Claimant worked as Head of Commercial - Speciality Products for the Respondent. The Respondent works in a niche area of the pharmaceutical industry (namely the sale of bile acid derivatives). In October 2022 the Claimant resigned to work for one of the Respondent's main competitors to head up their "bile acid business". At which point the Respondent sought injunctive relief relying on a 12 month non-compete in the Claimant's contract. The Court of Appeal held that the non-compete clause was clearly directed towards the specialist activities of the Respondent and that the clause was not incapable of severance - severing part of the restriction did not change the overall effect of the post-termination restriction in circumstances where the restriction was primarily aimed at the specialist activities of the Respondent. It also held that the clause was not too wide to be enforceable after severance given the nature of the Respondent's business. (Boydell v NZP Ltd and others)

Litigation process

Tribunal did not wrongly identify the issues in the Claimant's case. The EAT has rejected the Claimant's contention that the issues in her case were wrongly determined at a Case Management hearing. The Claimant brought proceedings against the Respondent in February 2020, alleging breach of contract, constructive unfair dismissal, failure to make reasonable adjustments and victimisation. At a Preliminary Hearing on 7 April 2022 the Tribunal made final determinations in relation to the issues to be considered at the hearing in November that year. When the Claimant's claims were dismissed at this hearing, she sought to argue that her claims had been wrongly limited to a single factual allegation. The EAT agreed with the ET that to add other grounds of claim would have meant allowing the Claimant to extend her case two years after the claim commenced. The EAT took account of the fact that the additional issues were not claims that 'shouted out' from the original details of the claim or the subsequent Particulars of Claim and were inconsistent with the way that the case had been understood at earlier points in the proceedings. (Hassan v BBC)

EAT dismissed claim as out of time because of failings of Claimant's representative. The EAT held that the Claimant's representative made fundamental errors in dealing with the Claimant's claim, that it was reasonably practicable for the claim to have been submitted within the time limit, and that therefore it was wrong for the Employment Tribunal to have allowed the claim to proceed. The Claimant instructed solicitors in relation to her unfair dismissal claim. Her claim was assigned to a recently qualified solicitor dealing with her first employment tribunal claim - she was working at home during the COVID-19 pandemic. The Claimant's solicitor miscalculated the time limit for submitting the claim (albeit initially setting herself an earlier deadline), sent the claim form to the wrong office and when this came to her attention resubmitted her claim by post rather than electronically such that it arrived later than the actual deadline. The EAT was clear that in accepting instructions to act on a claim, the Claimant should have known how to submit a claim and in failing to do so the claim had to be dismissed. (BLISS Residential Care Ltd v Fellows)

Employment Tribunal announces reforms. HM Courts & Tribunals Service has announced reforms to the Employment Tribunal service, specifically a new digital system. This new service is currently being tested in Glasgow, Leeds, Bristol and Nottingham. The new system provides for Claimants to be able to submit their claims directly online through the gov.uk website, after which they will be able to monitor the status of their case, view relevant documents, and make applications in relation to their claim online. In the near future legal representatives will be able to manage their cases through My HMCTS (an online case management tool). The Tribunal and the judiciary will also be able to review applications online, removing the need for any paper-based process. It is expected that the new system will continue to be developed and improved through the autumn.