Contents

• The King’s Speech

• The duty to prevent sexual harassment

• Fire and re-hire – Code of Practice now in force

• Part-time status had to be sole reason for less favourable treatment

The King’s Speech

As expected, the King’s Speech confirmed that the next parliamentary session will feature an Employment Rights Bill (the Bill). We’ve got a clearer idea of what the Bill will contain, but don’t have the detail yet. For more information you can read our Engage article here.

There are three particular issues employers will be concerned about:

• How will making unfair dismissal a “day one” right interact with the promise that employers will still be able to use probationary periods to assess new hires? The Bill may set out minimum standards for employers to follow to dismiss someone fairly in the early stages of employment, which will be less onerous than those that typically apply to capability related dismissals.
• How will the Bill define what is “reasonable” for an employer to do to accommodate a flexible working request? The Bill will require employers to accommodate flexible working “as far as is reasonable”, which suggests that it will become harder for employers to refuse requests. We are likely to see more claims relating to flexible working in future as a result.
• How will the Bill differentiate between “exploitative” and permissible zero-hours contracts, as the government does not appear to intend to ban zero-hour contracts outright? It seems likely that individuals who want to work flexibly will be able to continue to do so, but that workers who want regular hours will be able to demand a contract reflecting the hours they have worked over a reference period.

The government also intends to publish a draft Equality (Race and Disability) Bill to make it easier for employees from ethnic minorities or with disabilities to progress unequal pay claims. Simply extending the equal pay regime to the protected characteristics of race and disability seems unlikely to achieve that objective, given the notorious complexity of those claims. A commitment to making ethnicity and disability pay gap reporting mandatory for employers with 250 or more employees will be simpler to implement.

Next steps

• Review the Bill once it is published to understand the detail of what the government is proposing.
• Prepare to respond to a consultation on the draft Equality (Race and Disability) Bill in due course.

The duty to prevent sexual harassment

The new duty to take reasonable steps to prevent sexual harassment in the workplace comes into force on 26 October 2024. As explained in our Employment Bite on the topic, we’ve been waiting for revised EHRC guidance on how employers should prepare for the new duty. The EHRC published draft guidance on 9 July. It’s not particularly detailed and doesn’t address what the EHRC will regard as “reasonable” steps as opposed to “all reasonable” steps to prevent harassment.

The most important point from the guidance is that employers need to consider the risk of third party harassment and take steps to minimise those risks. Failing to do so could lead to enforcement action by the EHRC, even though as the law currently stands, an employee cannot bring a harassment claim against their employer based simply on harassment by a third party.

Next steps

• The consultation closes on 6 August 2024, so time for responding to the draft guidance is relatively short.
• Monitor for publication of the final guidance in September or early October.
• Review your existing approach to sexual harassment against the recommendations in the EHRC’s existing technical guidance on sexual harassment and harassment at work.

Fire and re-hire – Code of Practice now in force

Employers who are contemplating dismissing and re-engaging employees on new terms and conditions of employment should note the Code of Practice on dismissal and re-engagement that came into force on 18 July. The Code emphasises the need for employers to inform and consult staff – whether through employee representatives or individually – before dismissing and re-engaging.

Information should be provided as early in the process as reasonably possible, to help employees understand the reasons for the proposed changes and allow them to put forward alternative ways to meet the employer’s objectives. Consultation should be meaningful, take place openly and in good faith and last as long as reasonably possible. Employers should not mention dismissal and re-engagement “unreasonably” early, or as a negotiating tactic. Importantly, the Code says employers should contact ACAS for advice before suggesting dismissal and re-engagement.

If an employer unreasonably fails to follow the Code, it faces the possibility of an uplift to compensation of up to 25% in subsequent successful employment tribunal proceedings, such as unfair dismissal claims. However, at the moment it would not face an uplift to protective awards relating to a failure to inform and consult under the collective redundancy rules, which may also be triggered in dismissal and re-engagement situations.

Next steps

• Read the Code if you are considering changes to terms and conditions of employment and would contemplate dismissing and re-engaging employees who do not agree to the changes.
• Contact ACAS before raising the possibility of dismissal and re-engagement with staff or their representatives.
• Watch this space. One of the objectives of the Employment Rights Bill is to end the practice of fire and rehire, by providing effective remedies and replacing this Code of Practice, so we expect further changes soon.

Part-time status had to be sole reason for less favourable treatment

In Augustine v Data Cars Ltd the EAT confirmed that under the Part Time Workers Regulations, someone’s part-time status has to be the sole reason for the treatment complained of. It’s not enough for part-time status to be the effective cause of the treatment.

As a private hire driver, Mr Augustine had to pay his employer a “circuit fee” of £148 per week to access the booking system. All drivers paid the same fee, regardless of the hours they worked. Mr Augustine unsuccessfully argued that this was less favourable treatment of him as a part-time worker.

After he appealed, the EAT found that applying a flat rate fee to all workers regardless of their hours of work was in principle less favourable treatment. The fee represented a greater proportion of fees earned by a part-time driver than a full-time driver. However, the claim could not succeed because the decision of the Scottish Court of Session in McMenemy v Capita Business Services Ltd established that to succeed with a claim, the treatment complained of must be solely because of someone’s status as a part-time worker.

Subsequent EAT decisions moved away from that test, finding that someone’s status as a part-time worker must be the effective and predominant cause of less favourable treatment, but does not have to be the only cause. However, to avoid differences between the law in different parts of Great Britain, the EAT followed the decision in McMenemy, even though it preferred the “effective and predominant cause” formulation. Mr Augustine’s claim therefore failed, because the tribunal had found that his part-time status was not the sole reason for the treatment. The circuit fee was how the employer obtained revenue from its business and all drivers were treated in exactly the same way.

Next steps

• It is relatively unusual for claims under the Part Time Workers Regulations to come before the EAT.
• It is helpful to have the tension between the position in Scotland and England/ Wales resolved – at least for now.
• Given the EAT’s lack of enthusiasm about its conclusion, watch for an appeal to the Court of Appeal.

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Authored by Jo Broadbent, Ed Bowyer and Stefan Martin.