Employment Law Alert UK – February 2025

Employee status

ET finds that two-year backstop on wages claims is unlawful. The ET has provided further guidance on worker status in the latest gig-economy case, this time a claim brought by drivers for Addison Lee. The ET held that drivers who used Addison Lee vehicles were engaged as workers (for the purposes of the Working Time Regulations 1998 and National Minimum Wage Act 1998) whenever they were logged in to Shamrock (the Addison Lee platform). The ET drew a distinction for drivers using their own vehicles, finding that those drivers were only engaged as workers once they accepted a journey request via Shamrock (given that they could also accept jobs from other platforms). The ET went on to hold that the two-year backstop on wages claims was ultra vires, reasoning that the Deduction from Wages (Limitation) Regulations 2014 (introduced under powers set out in section 2(2) of the European Communities Act 1972) should apply only to EU-derived holiday pay, rather than to all wages claims. The ET argued that the right not to suffer an unlawful deduction of wages is such a fundamental national right that putting in place a back-stop would require primary legislation. The decision is thought to be the first dealing with this issue and may well be the subject of an appeal. (Afshar & ors v Addison Lee Ltd)

Diversity, Equity & Inclusion

Government announces day one right to neonatal leave and pay from 6 April 2025. The Neonatal Care (Leave and Pay) Act is intended to support parents of babies who are admitted into neonatal care within 28 days of birth. The Act will come into force on 6 April 2025 and will give day-one rights to eligible employees. Those employees will be able to take up to 12 weeks of paid leave in addition to their other family leave entitlements. Neonatal Care Pay will be subject to the same conditions as statutory maternity or shared parental leave pay. Interestingly Neonatal Care Leave will be calculated retrospectively such that parents will be entitled to one week’s Neonatal Care Leave in respect of each uninterrupted period of seven days that their baby receives neonatal care. In practice most parents will already be taking some form of family leave when their baby is in neonatal care such that this leave will then be taken at the end of that period of family leave (provided that it is taken within the first 68 weeks of the baby’s birth or placement). There are differing notice periods depending on the “tier” of care. We are exploring the practical implications of this new rights with clients. If you are interested in discussing this further, please do reach out to your usual contact.

ET should have allowed an extension of time in race discrimination claim from job applicant. The Court of Appeal has held that the ET and EAT misapplied the “just and equitable test” when determining whether to extend time for the Claimant’s race discrimination claim. The Claimant, of African-Caribbean descent, applied for the role of Assistance Business Development Manager at the Respondent. He submitted his application on 8 March 2019 and was interviewed on 28 March 2019. He was informed on 3 July 2019 that he was not selected. The successful candidate (Candidate B) was white. The Claimant scored second highest. On 24 July 2019 the Claimant requested information about the age, gender and ethnic origin of the successful candidate. The Respondent refused to provide this information on data protection grounds. The race of Candidate B was in fact not confirmed to the Claimant until a preliminary hearing on 23 June 2020. The ET and EAT found that the Claimant had enough suspicion of discrimination to bring his claim once he was told that he had not got the job. However, the Court of Appeal held a different view finding that the information about the ethnicity of the successful candidate was an essential part of the Claimant’s claim, and that the Tribunal should have taken into account that the Respondent had gone to great lengths not to disclose the ethnicity of the successful candidate. (Jones v Secretary of State for Health and Social Care)

Litigation procedure

New Employment Tribunal Procedure Rules. From 6 January 2025 the Employment Tribunal Procedure Rules 2024, which set out the powers and discretion of employment judges in relation to Employment Tribunal proceedings, came into effect. Alongside minor changes which reflect modern drafting practices and make the provisions clearer, the key point to note for practitioners is that many provisions have been renumbered so any documents referencing these rules may need updating.

New Presidential Guidance on taking oral evidence from persons located abroad. The President of the Employment Tribunals of England and Wales has issued new guidance. The guidance acknowledges that for many years remote oral evidence has been heard in ETs without proper consideration necessarily having been given to whether appropriate permission between states was in place. Going forward where evidence from abroad may be relevant, parties must plan ahead, be organised and demonstrate that there is no legal or diplomatic barrier to the employment tribunal taking oral evidence from the nation state where the relevant person is present. In addition, the ET must be satisfied that it is in the interests of justice and consistent with the overriding objective to permit oral evidence from abroad.

Employee Relations

Tribunals have power to uplift protective awards for failure to follow the Code of Practice on Dismissal and Re-engagement. The Trade Union and Labour Relations (Consolidation) Act 1992 (Amendment of Schedule A2) Order 2024 (SI 2024/1272) (the Order) came into force on 20 January 2025. This means that from 20 January 2025 employers who fail to follow the statutory Code of Practice on Dismissal and Re-engagement could be liable for a 25% uplift on any protective award. Conversely, where an employer has demonstrated compliance Tribunals have discretion to reduce protective awards by 25%. Employers are also advised to watch out for the government’s response to the consultation on fire and re-hire and collective consultation practices in connection with the proposed changes in the Employment Rights Bill, although the government has not given an indication of when this should be expected.

EAT finds that Claimant’s failure to follow the early conciliation process with ACAS did not automatically bar her claim from proceeding. The Claimant brought section 48 detriment claims, but failed to follow the ACAS early conciliation process as required by section 18A of the Employment Tribunals Act 1996. This procedural error was not initially spotted by the ET, which allowed the claim to proceed. The Respondents later argued that the claim should be rejected due to this. The Tribunal agreed, but allowed the Claimant to amend her claim to include the same section 48 claims, effectively restarting the process. On appeal, the EAT clarified that the ET had erred in its decision to reject the claim based on the early conciliation oversight. Instead, it should have considered whether to dismiss the claim for lack of jurisdiction or to strike it out. Crucially, the EAT determined that a Claimant’s failure to comply with the early conciliation requirement does automatically remove the ET’s jurisdiction to hear the claim. The EAT emphasised that the purpose of early conciliation is to encourage resolution before litigation and that non-compliance should not automatically negate the Tribunal's ability to consider a claim. The case was remitted to the tribunal for consideration on its merits. (Abel Estate Agent Ltd & Ors v Reynolds)

ET was wrong to order the re-engagement of employee who was unfairly dismissed for gross misconduct. The EAT has overturned the ET’s decision to order the re-engagement of the Claimant after his unfair dismissal, finding that the ET failed to properly consider the Respondent’s genuine and rational belief in the Claimant’s misconduct, such that the relationship of trust and confidence had been broken. Allegations of inappropriate sexual conduct were made against the Claimant by a colleague. Following an investigation and disciplinary hearing the Claimant was dismissed for gross misconduct, after which the Claimant brought an unfair dismissal claim. The ET found that the Claimant had been unfairly dismissed: although the decision maker did genuinely believe that inappropriate conduct had taken place, this belief was not supported by a reasonable investigation. Following the ET liability hearing, the Respondent commissioned a further independent investigation after which the Respondent maintained its gross misconduct finding. At the remedy hearing which followed, the ET made an order for re-engagement. However, the EAT disagreed, and made clear that it was not for the ET to test the reasonableness of the Respondent’s investigation when it came to considering re-engagement, rather it was to consider whether the Respondent held a genuine and rational belief. The EAT overturned the ET's re-engagement order. (British Council v Sellers)

Tax

Court of Appeal rules that whether members had significant influence over the affairs of the LLP must be determined by reference to their enforceable mutual rights and duties only. This is a highly significant development in the application of the UK’s salaried member rules. See our tax team’s Insight for further commentary and analysis. (BlueCrest Capital Management (UK) LLP v HMRC).