Top 5 recent workplace developments – July 2024

Here is our selection of key recent employment law developments for employers, HR professionals and in-house lawyers.

1. Employment reforms: Employment Rights Bill

In the King’s speech delivered on 17 July, the new Labour government promised to pass “legislation to ban exploitative practices and enhance employment rights”. The detail of how this is to be done is set out in the Prime Minister’s briefing notes on the King’s Speech.

The briefing notes published by the Prime Minister’s Office set out the following commitments:

• Labour is pressing full steam ahead with their “Plan to make work pay – delivering a new deal for working people” (“Labour’s Plan”) in full. We previously reported on the key proposals set out in that plan here. 
• An Employment Rights Bill will be introduced within “the first 100 days” (presumably of entering office) and will bring in the policies set out in Labour’s Plan which require primary legislation to implement. The Prime Minister’s briefing notes accompanying the King’s speech appear to indicate the following commitments will be in the bill (although this is not entirely clear): 
  • Introduce new rules to prevent the abuse of zero hours contracts
  • Provide effective remedies against abuse of “fire and rehire” and replace the new statutory code
  • Introduce “Day-one rights” for all workers for unfair dismissal, parental leave and sick pay (with probationary periods for employers to assess new hires)
  • Increase rights to statutory sick pay by removing lower earnings limit and three-day waiting period
  • Make flexible working the default from day one, except where it is not reasonably feasible
  • Make it unlawful to dismiss a woman who has had a baby for six months after her return, except in specific circumstances
  • A new Fair Work Agency to strengthen enforcement of workplace rights
  • A new Fair Pay Agreement in the adult social care sector
  • Reinstate the School Support Staff Negotiating Body
  • Repeal the law on minimum service levels in relation to industrial action, simplify the process of statutory recognition and introduce a regulated route to ensure workers and union members have a reasonable right to access a union 
• A draft Equality (Race and Disability) Bill will: 
  • “Enshrine in law the full right to equal pay for ethnic minorities and disabled people, making it easier for them to bring unequal pay claims”. 
  • Introduce mandatory ethnicity and disability pay reporting for larger employers (those with 250+ employees) to help close the ethnicity and disability pay gaps. The notes provide that mandatory reporting will “expose pay disparity, encouraging employers to take action and coupled with additional equal pay protections allow those who are being underpaid, with greater legal certainty to make a claim.”

In addition, the Prime Minister’s briefing notes to the King’s speech promise to deliver a genuine living wage that accounts for the cost of living and removes the age bands, as well as a close partnership with trade unions to deliver on Labour’s Plan.

Practical point 

Employers can expect to see a significant number of changes to employment law over the coming year or two, but as to when precisely the proposals will become law this is less clear, particularly in view of the Labour Party’s manifesto commitment to consult fully before passing legislation. Notwithstanding this, Labour indicated in its Plan that some of the proposals could be introduced relatively quickly and will be included in the Employment Bill (such as removing the lower earnings limit on statutory sick pay and creating a single enforcement body). Other proposed changes which were not directly listed in the briefing notes to the King’s speech may take much longer, such as the proposal to move to a single worker status and a review of parental leave (where Labour’s Plan envisages that detailed consultations would be undertaken within the first year of a Labour government). Labour’s Plan also indicates that they will engage widely with experts and stakeholders, including employers and trade unions in respect of the changes that require substantial secondary legislation. 

The government promises “to introduce” the Employment Rights bill within 100 days, but whether this means the draft bill will be introduced for consultation or introduced to Parliament is unclear – but we will know soon enough as it is rumoured that the bill could be published as early as next week. No timing is given in relation to the Equality (Race and Disability) Bill. 

2. EDI & workplace culture: Sexual harassment – updated guidance published

On 26 October 2024, a new duty is being introduced for employers to “take reasonable steps” to prevent sexual harassment of their employees, creating a new risk area for employers – and draft guidance to help employers has now been published. 

Breach of the new duty may result in an increase of up to 25% to the compensation awarded for sexual harassment by Employment Tribunals. The Equality and Human Rights Commission (EHRC) also has the power to take enforcement action against employers who breach of the duty.

The EHRC has now launched a consultation seeking comments on updates to its existing technical guidance which aims to help employers understand their obligations.

Significantly, the updates to the guidance make multiple references to harassment by third parties. Whilst there is no direct legal protection for employees against harassment by third parties, as this was dropped from the final legislation, the guidance indicates that the new duty will require employers to take reasonable steps to prevent sexual harassment by both their own workers and third parties. 

The guidance also indicates that the EHRC will use its enforcement powers if it finds that an employer is failing to protect its employees from sexual harassment by third parties.

Practical point

Employers need to take proactive steps to prepare for this new duty. Preparations should not be limited to simply repeating previous staff training - the new duty to be proactive goes further than this and requires step change. We can provide bespoke advice tailored to your organisation’s needs. Click here for more information on how we can help. 

For further details about this new duty, please read our in-depth update.

3. Settlement agreements: During ongoing employment

The Employment Appeal Tribunal has ruled that a tribunal was correct to strike out disability discrimination claims on the basis that they were precluded by a settlement agreement entered into during the claimant’s ongoing employment.

In 2012 the claimant brought a grievance about various matters including the failure by his employer to transfer him to their disability plan. He subsequently entered into a settlement agreement which provided that he would be transferred to the disability plan and receive disability salary payments, and he waived the right to bring various specified claims (including for disability discrimination), whether or not they were or could be in the parties’ contemplation at the date of the agreement. 

In 2022, he brought disability discrimination claims on the basis that he had not had any salary reviews or increased payments since transferring to the disability plan. The tribunal struck out the claims on the basis they were precluded by the settlement agreement.
The EAT concluded that the tribunal had been correct to strike out the claimant’s disability discrimination claims given that they fell within the terms of the settlement agreement.

Practical point

This decision clarifies that a future claims waiver may be enforceable where there is a continuing employment relationship. This is significant for employers, given that the prospect of new claims arising is higher where employment is continuing. That said, the facts of this case are unusual and specific; although he was still employed, the claimant was an "inactive" employee remaining in employment so he could receive benefits under his employer's disability plan. 

Clifford v IBM United Kingdom Ltd

4. Redundancy: Maternity leave dismissal

The EAT considered a case concerning redundancy protection where the employee was on maternity leave when there were proposals to make her role redundant.

The claimant, who was employed as a financial accountant, worked 40 days per year. During her maternity leave, the employer created a new full-time role of Business and Financial Analyst, encompassing her duties but also involving other strategic elements. Although she was invited to apply for the expanded role, she was also given a draft settlement agreement which she was invited to accept – and when relations broke down, she was dismissed.

The regulations which applied until April 2024 provided that employees on maternity leave, adoption leave or shared parental leave had priority over other employees at risk of redundancy - having the right to be offered a suitable alternative vacancy where one was available. Failure to comply with this rule could lead to a claim for automatic unfair dismissal.

The tribunal rejected the claimant's argument that the new role amounted to a suitable available vacancy under this provision because the focus of the job was business analysis rather than financial accounting. As for discrimination, it found that the employer had provided an acceptable explanation for reorganising the business, and that the new role was not a device designed to terminate the claimant's employment while she was on maternity leave.

The EAT upheld the claimant's appeal, finding that where the claimant's role was relatively new (she had only been in the post for four months), the question of whether there was a redundancy could not be answered as a matter of impression. It did not inevitably follow from the reorganisation, or the employer's requirement for different skills, that there had been a redundancy. In relation to the discrimination claims, the tribunal should have scrutinised whether the employer had shown that there was a non-discriminatory explanation for its treatment of the claimant. 

Practical point

The new redundancy protection rules that have applied since 6 April 2024 require employers to offer suitable alternative vacancies to a much wider category of workers who are at risk of redundancy: 

• Pregnant employees: from the date the employee tells their employer they are pregnant until their maternity leave starts
• Maternity and adoption leavers: for 18 months from the date of the expected week of childbirth or placement for adoption/date the child enters Great Britain
• Shared parental leavers: for 18 months after the child’s birth or placement, except if they have not taken maternity or adoption leave - in which case they will still be protected during SPL but will need to have had six weeks’ continuous leave to qualify for protection after returning from SPL. 

Miss Helen Ballerino v The Racecourse Association Ltd 

5. EDI & workplace culture: EHRC’s 2025-2028 strategic plan 

The EHRC has published its draft strategic plan for 2025-2028 on the areas it plans to focus on to improve EDI.

The EHRC’s consultation on its draft strategic plan for 2025-2028 is open until October 2024. The plan gives employers a useful insight into areas of equality law where we may see development and possibly greater regulation.

It has identified three potential areas that it will focus on from 2025 to 2028, and plans to use its regulatory powers to support long-term change and improvement in equality and human rights in these areas:

• Work: as well as tackling sexual harassment in the workplace through the new duty to take reasonable steps to prevent sexual harassment, the EHRC will also seek to improve pay and employment gaps for women, disabled people and ethnic minority groups and address barriers to participation in the workplace for disabled people, including issues related to reasonable adjustments. The EHRC will also focus on the disproportionate levels of discrimination, harassment and victimisation experienced by workers with certain protected characteristics, including ethnic minority groups. In addition, it plans to look at the rise of insecure employment, and the discrimination risks associated with new technology (for example automated recruitment processes) and the increasing prevalence of home/hybrid working arrangements.
• Participation and good relations: the EHRC will focus on the risk of discrimination and breach of privacy rights arising from the use of artificial intelligence. It also plans to look at social tensions due to polarised discussion of equality and human rights issues, and the risk to freedom of expression where the expression of some views is prohibited or debate is shut down.
• Justice and the balance of rights: the EHRC plans to improve legal clarity around issues where there may be tension between the rights of two or more groups, for example, in relation to sex and gender or matters of religion or belief). 

Practical point

The EHRC’s draft strategic plan is a useful indicator for employers of areas where we may see greater regulation or legal developments in future. We will keep clients informed of important developments to be aware of.