Top 5 recent workplace developments - May 2023

This is our selection of recent developments which we think will impact on HR practice.

1. Proposed harassment law reforms 

Recent press reports cast doubt on whether proposed new laws on third party harassment and new duty to prevent sexual harassment will go ahead.

The Worker Protection (Amendment of Equality Act 2010) Bill, which has been working its way through Parliament, is designed to encourage employers to prevent sexual harassment in the workplace by introducing a new duty on employers to take all reasonable steps to prevent sexual harassment of their employees in the course of their employment.  

This is a private member’s bill with government backing so it had widely been expected to become law, particularly given the government’s long-standing desire to toughen up sexual harassment laws. But on 21 April more than 40 amendments were added by Tory backbench peers in the House of Lords leading to fears that this could lead to the bill falling at the end of this Parliamentary session due to lack of Parliamentary time.  The proposed third-party harassment provisions have been criticised as striking the wrong balance between protecting free speech and tackling harassment. The bill builds in a type of ‘carve out’ provision to ensure that, while employers will be expected to take action against workplace harassment, those actions should not extend to prohibiting the conversation of others, subject to certain limitations. So, an employer would still be expected to take action to prevent racial slurs or rape jokes as such behaviour is never acceptable, but an employer would not be expected to stifle legitimate and appropriate workplace discussions about any political, moral, religious or social matters even though those topics can quickly become contentious.   

Practical point 

If the Bill falls this is unlikely to be the end of the matter given the government’s commitment to toughen laws on harassment. Even if the third-party harassment provisions do not survive, it’s unlikely that the government will drop the proposed new duty to prevent sexual harassment or the planned enhanced enforcement provisions which give tribunals a discretion to increase compensation by up to 25% for breach of the employer duty in sexual harassment cases. Whether or not the bill becomes law there is much employers should be doing to tackle harassment in the workplace. 

2. Important new white papers on disability and AI

In March the government published two important white papers. 

Disability

Transforming support: the health and disability White Paper sets out how the government proposes to help unemployed disabled people and those with health conditions get back into work, and to remain there. The paper sets out the key ways to achieve this goal: first by increasing employment support and secondly by reforming the benefits system. Proposals for increasing support include for example improved access to Occupational Health (OH) services, more advice and information services, and new Access to Work initiatives.

Later this year the government will be seeking views in a consultation on a draft Disability Action plan which will set out the practical action the government will take. The proposals to improve employment support should assist disabled people and those with long term health conditions get back to work. The initiatives should also help employers understand the benefits of employing disabled people and provide support to employers to help them do so. Although the improvements to the employment support have been welcomed, there has been some criticism from disability groups over the proposals to reform the benefits system.  

Practical point 

Employers should continue to invest time and resources in the support and management of employees with health conditions or disabilities. This will help improve workplace culture, reduce long term absences, grievances and tribunal claims.

Artificial Intelligence

A pro-innovation approach to AI regulation is a government white paper setting out a framework to guide the UK’s approach to regulating AI and follows a government consultation in 2022 calling for views on the regulation of artificial intelligence. In short, the government will not create a single regulatory function to govern AI. Instead, it will support existing regulators to develop a bespoke approach to use within their sectors. These will include the Information Commissioner's Office, Competition and Markets Authority, Health and Safety Executive, the Equality and Human Rights Commission and the Financial Conduct Authority (FCA).

These regulators will issue guidance over the next 12 months. A consultation has been launched to consider how best to shape a co-ordinated regulatory approach and to monitor the effectiveness of the AI framework. Following the consultation (which closes on 21 June 2023) the government will decide whether legislation should be introduced to support the regulatory guidance. 

Practical point

Employers are using AI at all stages of the employment lifecycle, and particularly with recruitment; CV sifting, targeted job adverts etc. Using AI in this way can expose business to discrimination risk as well as other risks such as unfair dismissal claims and data protection breaches. There are currently no UK laws explicitly designed to regulate AI but we are now seeing a material shift towards greater AI governance; the ICO and EHRC for example have already issued guidance on the topic. This White Paper lays the foundations for more guidance and potential regulation. Employers should watch this space carefully because experience suggests that a co-ordinated regulatory approach will be very difficult to achieve, particularly in such a compressed time-scale. 

3. EDI: Ethnicity pay reporting

The government’s long-awaited guidance for employers on carrying out voluntary ethnicity pay reporting has now been published.

In March 2022, the government announced that instead of introducing mandatory ethnicity pay gap reporting there would be a process for voluntary pay reporting. Organisations which choose to publish ethnicity pay figures will be required to publish a diagnosis and action plan setting out the reasons why any disparities exist and what will be done to address them. The government promised support for employers who want to publish their ethnicity pay gaps, with new guidance.

The government has now published its ethnicity pay reporting guidance which contains detailed advice on analysing and reporting on ethnicity pay. The guidance covers:

• collecting employees' ethnicity pay data
• data issues
• ethnicity pay calculations
• reporting findings
• analysing and understanding the underlying causes of pay disparities
• taking an evidence-based approach to addressing pay disparities

The guidance “strongly discourages” binary reporting (eg dividing employees into white British and ethnic minority groups) and advises employers to try and record as many ethnicity categories as possible in their analyses to help with understanding ethnicity pay gaps and identifying relevant actions. That said, it notes that for smaller employers or where businesses have small numbers of employees in certain ethnic groups binary reporting may be necessary to protect employees’ confidentiality.

Practical point

The government is launching an Inclusion at Work panel which will develop and disseminate advice on evidence-based actions employers can take. The panel’s work will inform a new voluntary Inclusion Confident Scheme which employers will be able to sign up to - updates will be available on Inclusive Britain: publications and updates.

The government has also published guidance on positive action in the workplace to support employers understand how to take positive action while avoiding unlawful discrimination. This should be considered alongside the Statutory Code on Employment (chapter 12). 

4. Future worker rights and protections: New Commons Select Committee report recommendations to government 

On 18th April, the Business, Energy and Industrial Strategy Committee published a report making several recommendations to government around workers' rights and protections.

Recommendations include: 

• The committee called on the government to introduce a right for workers to be consulted and notified where technology will result in their surveillance, and to consult on an enforceable code of practice on its use
• There need to be new laws to reflect more flexible constructions of work. For example, a default right to a secure contract that reflects working hours after 26 weeks of work (rather than the proposed right to request a predictable working pattern); a right to 4 weeks’ notice of working schedules and a right to compensation for cancelled shifts
• More research is needed into the prevalence and nature of pregnancy discrimination and disadvantage in the workplace
• The government should proceed with plans for a single enforcement body and statutory protection from umbrella companies that deprive workers of rights and remuneration
• There should be an investigation into the health and safety implications of night working
• The government should explain why it has not yet extended time limits for certain tribunal claims from three to six months
• There is a need for greater scrutiny of provisions of the Retained EU law Bill that will be ‘sun-setted’ or incorporated into domestic law
• Employers should offer more flexible working opportunities to benefit from the huge untapped pool of older workers and they must assess whether their recruitment practices and workplaces are ageist. 

Practical point

The purpose of the report was to assess the overall state of the UK labour market, its prospects, the pressure it faces and the government’s policy response. Whilst the report is not a statement of government policy, the report will help to provide government with suggestions and information it will need to inform its policy decisions in relation to worker rights and protections and technology and skills development. It is worth reading to gain an insight into the issues the government now faces in preparing our laws and policies for the future world of work. 

5. Flexible working request during maternity leave: EAT decision shows the importance of considering flexible working requests carefully

As the employee’s original flexible working request was initially turned down, and again on appeal, there was still potential for her to bring an indirect sex discrimination claim even though the request was subsequently granted in full.

Ms Glover, an assistant store manager at Lacoste UK Ltd, worked full-time, five days a week, but flexibly as set out in a rota. During her maternity leave, she made a flexible working request asking to work three days a week on her return. The request was turned down and so she appealed.

On appeal she was offered four-day week, to be worked flexibly on any day of the week including weekends on a trial basis. As this outcome would cause her childcare issues, Ms Glover asked Lacoste to reconsider her request, failing which she may have to resign and claim constructive dismissal. Lacoste then agreed to her original flexible working request. Ms Glover never actually had to work the working pattern offered at the appeal hearing. 

Nevertheless, Ms Glover brought an employment tribunal claim for indirect sex discrimination. She claimed that the requirement to work fully flexibly was a provision, criterion, or practice (PCP) that had been applied to her and put her (and other women) at a disadvantage due to childcare obligations, and could not be justified. 
The tribunal decided that no PCP had been applied to Ms Glover and she had not suffered a disadvantage as she had not actually been required to work flexibly. The tribunal did accept that, had the PCP been applied, it would put women at a disadvantage due to the difficulties it would cause with childcare. Ms Glover appealed to the Employment Appeal Tribunal (“EAT”). 

The EAT decided in Ms Glover’s favour. It said that the requirement to work on a fully flexible basis - the PCP -  had been applied to Ms Glover when the outcome of her appeal was decided. It sent the case back to a fresh employment tribunal to reconsider the merits of her case with this in mind. However, the EAT said that it was hard to see on what basis it could be decided that Ms Glover suffered no disadvantage when her appeal was decided against her and she felt she had to consider resigning.

Practical point

This case demonstrates the importance of considering flexible requests carefully from the start and keeping in mind the risk of discrimination claims – not just sex discrimination but also on other grounds such as age, disability or religion / belief.

Even if the flexible working request is ultimately granted on appeal, an employee who has initially had their request turned down could still bring a successful discrimination claim and be awarded compensation, if the initial decision cannot be objectively justified (although it is unusual in our experience for an employee to bring a discrimination claim when their flexible working request has ultimately been granted.) Compensation is most likely to be restricted to an injury to feelings award.  

The government is supporting proposed reforms to the making of flexible working requests. See the Employment Relations (Flexible Working) Bill and the government's response to the consultation, Making flexible working the default. If these proposals become law, we are likely to see more flexible working requests being made.

Glover v Lacoste UK Ltd [2023] EAT 4