Employment Law Alert UK – November 2024

Workers’ rights

Labour publishes long-awaited Employment Rights Bill and kicks off consultation processes. The highly anticipated Employment Rights Bill was published on 10 October - just within 100 days of Labour coming into government in July 2024, together with Next Steps to Make Work Pay and Employment Rights Bill: supporting documents. We anticipate that the removal of the two-year qualifying period and the introduction of the new concept of an “initial period of employment” are likely to be a key focus for many. Read our Insight for a summary of the key provisions and our thoughts on their likely impact.

On 21 October 2024 the Bill had its second reading in the House of Commons. Alongside this, the Department for Work and Pensions published four separate consultations, which will run until early December 2024. The first set of consultations cover zero hours contracts; collective redundancy consultation and “fire and re-hire”; trade union legislation; and statutory sick pay. Of particular note in the consultation on collective consultation and “fire and re-hire” the government is seeking views on potentially increasing the protective award that a tribunal can award for collective redundancy to 180 days, or removing the cap entirely, and exploring the potential of interim relief for employees.

Diversity, Equity & Inclusion

EAT upholds sex-related harassment claim. The EAT has upheld the decision of the ET that the Claimant suffered harassment when he was called a “bald cxxt” by a colleague. The ET found that baldness is a predominantly male issue and as a result the comment could be deemed to be harassment on the grounds of sex. The Respondent appealed, but the EAT dismissed the appeal. Crucially the EAT was not persuaded, and noted that there was no authority for the proposition that in order for unwanted conduct to relate to sex, it could not apply to anyone of the opposite sex. In this case, the fact that there are some bald women, did not prevent the comment from relating predominantly to men. (Finn v British Bung Manufacturing Company)

Non-financial misconduct survey results. On 25 October 2024, the FCA published the key findings from their survey of non-financial misconduct and culture to which 984 firms have responded. Our headline thoughts on these findings are available in the October SMCR+ View. The FCA have advised that no best practice guidance will be published, but a final policy on how NFM should be considered in the rules is coming this quarter according to the Regulatory Initiatives Grid.

EAT overturns unfair dismissal finding in redundancy case involving maternity leave. The EAT has overturned the ET’s findings of unfair dismissal and automatic unfair dismissal under the Maternity and Parental Leave Regulations 1999 (MAPLE). The Claimant, who was a team leader at the Respondent was made redundant during her maternity leave as part of a restructuring exercise that reduced team leader positions from 21 to 16. The ET initially found that the 16 remaining roles were suitable alternative vacancies, which the Claimant should have been offered. However, the EAT reached a different view. The EAT clarified that the remaining roles could not be considered to be "newly created positions" and therefore were not suitable alternative vacancies. The EAT also identified errors in the ET's assessment of the redundancy selection process, particularly in substituting its own findings for those of the Respondent and failing to demonstrate how identified flaws would have altered the Claimant’s selection for redundancy. The case has been remitted to a fresh tribunal for rehearing. (Carnival PLC v Laura Hunter)

Employee Relations

Court of Appeal overturns EAT decision on small-scale redundancy consultation; no general workforce consultation required. The Court of Appeal has overturned the decision of the EAT, restoring the ET's decision that a recruitment consultant's redundancy dismissal was not procedurally unfair. The Claimant worked for the Respondent as a recruitment consultant until he was made redundant. The Claimant was scored alongside the rest of the recruitment team and was one of two employees made redundant. Although the respondent held three meetings with the Claimant in relation to the redundancies, at no point was he aware of his selection score, and how this compared to others in the pool. The Claimant appealed against the decision, but his appeal was unsuccessful. The Court of Appeal rejected the EAT's stance that 'general workforce consultation' should be the norm for smaller-scale redundancies (i.e. fewer than 20 redundancies during the relevant reference period) and that its absence made the dismissal unfair. The Court of Appeal emphasised that the adequacy of any consultation process and therefore the fairness of a particular redundancy will depend on the facts of each case. This decision is likely to come as a relief for employers as it confirms that ‘general workforce consultation’ should not be expected for smaller scale exercises. Nevertheless, the case still acts as an important reminder that consultation should take place at a point at which an employee can still reasonably influence the decision. In relation to selection criteria specifically the Court of Appeal observed that it is good practice to allow an employee to comment on selection criteria, but a failure to do so will not inevitably make a decision unfair, provided that an employer remains open to feedback through the process. (Haycocks v ADP RPO UK Ltd)

Data Protection

ICO introduces new data protection audit framework. On 7 October 2024 the ICO launched a new audit framework to help organisations to evaluate their own compliance with the requirements of data protection law. The materials include 9 toolkits, and 9 corresponding framework trackers covering accountability, records management, information and cyber security, training and awareness, data sharing, requests for access, personal data breach management, AI and age appropriate design. The ICO hopes that these resources will help organisations to critically assess their current practices, as well as putting in place an action plan for future improvements.

Whistleblowing

EAT clarifies scope of whistleblowing protections for charity trustees. In this significant decision, the EAT has addressed the nuanced issue of whistleblowing protections for non-traditional roles, specifically focusing on a charity trustee. The Claimant, was elected as President-Elect of the British Psychological Society. He had concerns about how the Society was being managed, which he expressed both before and after his appointment. When the Claimant was later removed from his position, he alleged that this was due to the protected disclosures which he had made. At first instance the ET found that the Claimant did not have worker status, as there was no contract and therefore was excluded from statutory whistleblowing protection. Although the ET also considered whether the Claimant might be protected under the ECHR framework (following the decision in Michalak v Wandsworth London Borough Council which held that individuals with 'other status', in roles substantially similar to employees or workers, are entitled to whistleblowing protection, barring any justifiable reasons for exclusion), it concluded that the Claimant did not. This conclusion was primarily based on the voluntary nature of the Claimant’s role and the lack of remuneration. The EAT criticised the ET’s narrow interpretation of status, emphasising the importance of considering the role's responsibilities, exposure to potential wrongdoing, and the importance of encouraging public interest disclosures and remitted the case back to the ET for reconsideration. The EAT gave a strong steer that there is “a strong argument that being a charity trustee, President-Elect and/or President is akin to an occupational status”. This encouragement from the EAT to consider a broader interpretation of 'worker' and 'other status' could significantly impact the landscape of employment law, particularly in the charitable sector, by potentially expanding the scope of whistleblowing protections. The EAT also made clear that pre-employment disclosures can qualify as protected whistleblowing disclosures. (MacLennan v British Psychological Society)

Tribunal procedure

Employment tribunal can award costs on indemnity basis provided decision properly reasoned. The Claimant brought claims for unfair dismissal, whistleblowing and whistleblowing detriment. The ET did not uphold the Claimant’s claims, and in fact found that the Claimant’s whistleblowing claim had no reasonable prospect of success and had been cynically contrived to avoid the statutory cap on damages. Subsequently, at a costs hearing, the tribunal awarded costs to the Respondent, including costs for the costs hearing itself, while rejecting the Claimant's costs application. The Claimant's appeal against the dismissal of the ordinary unfair dismissal complaint was unsuccessful, but his appeal against the costs decision succeeded in part, particularly regarding the basis for the detailed costs assessment and the amount awarded for the costs of the costs hearing. Although the Claimant had been guilty of "extremely serious" unreasonable conduct (including giving dishonest evidence and unreasonably accusing others of forgery), when awarding indemnity costs the ET did not did not explain how the case met the "higher bar". The EAT noted that costs incurred in proceedings in employment tribunals should only be assessed on the indemnity basis when the conduct of the paying party has taken the situation away from even the limited number of cases in the employment tribunal where it is appropriate to make orders for costs. The EAT remitted the case to the same ET to decide the main costs award and the amount of the "costs of costs" award afresh. (Dowding v The Character Group plc)