News
NEW duty to prevent sexual harassment
With effect from 26 October 2024
What is the new duty?
The Worker Protection (Amendment of Equality Act 2010) Act 2023 comes into force on 26 October 2024, and introduces a duty for employers to take reasonable steps to prevent sexual harassment of employees in the course of their employment.
The new law aims to shift employers’ focus towards taking proactive measures to identify risks and to prevent sexual harassment, rather than addressing harassment after it has taken place.
It introduces a new, positive obligation, which will require employers to put “reasonable steps” in place proactively to prevent sexual harassment of employees from arising in the first place.
Employers facing an allegation of sexual harassment will need to demonstrate the targeted measures they have put into place to comply with this new duty.
What guidance is available on the new duty?
The Equality and Human Rights Commission (EHRC) have just last week published their updated technical guidance on preventing workplace sexual harassment, following a period of consultation over the summer. The guidance can be found here.
The guidance is not legally binding but Employment Tribunals are likely to rely on it when deciding if an employer has complied with the new duty.
Here are some of the key points from the guidance:
The new preventative duty is an anticipatory duty. This means that employers must not wait until sexual harassment has happened before acting.
Risk assessments are key. The guidance makes clear that an employer is unlikely to be complying with this preventative duty unless they carry out a risk assessment (see further below).
The preventative duty only applies to sexual harassment. It does not cover harassment related to a protected characteristic.
The EHRC has given more examples of factors that may increase the risk of sexual harassment.
In deciding whether a step is reasonable to take, employers must consider various factors. It is an objective test about what it is reasonable for the employer to do in the circumstances. The guidance recognises that this will vary from employer to employer depending on the size and nature of the employer, the resources available to it and the risk factors which need to be addressed within the particular employer or sector. It should not be a one-off exercise.
Employers will need to act on lessons learnt from previous instances of sexual harassment.
The preventative duty extends to requiring employers to take reasonable steps to prevent sexual harassment of workers by third parties, such as clients and customers.
The guidance contains a short 8 step guide for employers on preventing sexual harassment at work, which summarises the detail found in the guidance itself. Those 8 steps are outlined below.
What happens if an employer gets it wrong?
Employers that fail to comply with the new duty face both financial and reputational risks.
If an employee succeeds with an Employment Tribunal claim for sexual harassment, and the employer is found to have breached its duty to take reasonable steps to prevent the sexual harassment, the Tribunal will be able to uplift compensation by up to 25%. As there is no cap to the compensation which can be awarded, this uplift could be very significant.
In addition, the EHRC has the power to conduct investigations and enforce the new preventative duty, independently of any incident taking place. Larger employers are likely to be at particular risk here.
What does an employer need to do now?
The EHRC has published an 8-step guide for employers, which can be found here. We have listed the key steps below.
Develop an effective anti-harassment policy
Engage your staff
Assess and take steps to reduce risk in the workplace
Develop a robust reporting system
Roll out up to date and tailored training
Deal with complaints immediately and effectively
Address harassment by third parties
Monitor and evaluate actions
If you would like a fixed fee quote for tailored support with implementing the the above steps in your organisation before this new duty comes into effect in 4 weeks, please get in touch.
NEW Employment Rights Bill published
Key changes
Here are some of the key points from the Bill:
Unfair dismissal: Removal of 2 year qualifying period. We are told in the press release that there will be a consultation on different rules during a probationary period. It is not clear what this means, although it is likely that there will be an exemption or relaxation of the rules in the first 9 months.
Fire and Re-hire: It will be automatically unfair to dismiss an employee for refusing a contract variation. There is a very limited exception where an employer has a genuine need to avoid serious financial issues that may threaten the business, provided that there has been extensive consultation first.
Zero hours contracts: New protections include a guaranteed hours provision, the right to reasonable notice of a shift and payment for cancellation of shifts at short notice.
Flexible working: Any refusal of a flexible working request has to be reasonable, from a list of specified grounds for refusal. These are similar to the previous grounds, although the reasonableness requirement is new. There is also a requirement for the employer to explain why their refusal is reasonable in writing to the employee. There is no change to the penalty for breach (8 weeks' pay).
Statutory sick pay: This will start from day 1 of employment.
Bereavement leave: This will be available for all employees, not just for parents.
Harassment: Employers will have full liability for third party harassment.
Whistleblowing: Allegations of sexual harassment will now automatically be covered under the whistleblowing legislation as protected disclosures.
Collective redundancy consultation: It will now be necessary to count redundancies across the whole business, rather than just at one establishment when assessing 20 or more are proposed.
Equality action plan: Regulations may require employers with over 250 employees to produce action plans on gender equality.
Collective bargaining: There are provisions for introducing sector wide collective bargaining for school support staff and adult social care workers.
Section 1 statements must include statements of union rights.
Next steps
The Leader of the House of Commons has announced the second reading of the Employment Rights Bill will be on 21 October 2024. The second reading is normally the main debate on a Bill.
The Government has also published a ‘Next Steps’ document (see here) to outline reforms that it will look to implement in the future. Subject to consultation, these will include:
a ‘right to switch off’, preventing employees from being contacted out of hours, except in exceptional circumstances;
a commitment to end pay discrimination by expanding the Equality (Race and Disparity) Bill, which was announced in the King’s Speech on 17 July 2024, to make it mandatory for large employers to report their ethnicity and disability pay gap;
a move towards a single status of worker and transition towards a simpler two-part framework for employment status;
reviews of the parental leave and carers leave systems.
Commencement date
We don't know the commencement date for the draft legislation yet. According to the BBC this morning, it is rumoured to be October 2026, but this is not confirmed.
Once the consultation document (covering amongst others the rules on probationary periods) has been published, we will send out a further update.
The King's Speech - 17 July 2024
2 new Employment bills within 100 days
The King’s Speech is a key constitutional event in Parliament, as it sets out the laws the Government intends to introduce. The new Government delivered it's King's Speech yesterday, and promised 2 new Employment bills:
a new Employment Rights Bill
a new Equality (Race and Disability) Bill
The new bills will be introduced within 100 days - therefore published in October. These changes are described as “the biggest upgrade to workers’ rights in a generation”. Because any new legislation must be debated in both Houses of Parliament and agreed prior to receiving Royal Assent and becoming law, it is likely that the new legislation would not come into effect until next year.
There are some questions over how the new rights will work in practice. We will have more detail once the bills are published in October.
Below are the key changes that were set out in the Labour manifesto and detailed in our newsletter on 5 July 2024, with commentary in RED on anything that has changed in light of yesterday's King's Speech, as well as some new developments, also in RED.
1. New Day 1 rights – including unfair dismissal
A key manifesto pledge was the introduction of several new “Day 1” rights, including the right to sick pay, parental leave and (crucially) the right not to be unfairly dismissed. Currently, an employee needs a minimum of 2 years’ continuous employment to bring an ordinary unfair dismissal claim. Very soon, this right will apply from Day 1 of employment.
CONFIRMED - subject to probationary periods to allow employers to assess new hires.
In addition, the Government stated in the King's Speech that it will strengthen protections for new mothers, making it unlawful to dismiss a woman who has had a baby for six months after her return, other than in exceptional circumstances.
Labour also plans to remove the cap on compensation for unfair dismissal (currently £115,115) such that compensation in successful claims is unlimited, like in discrimination and whistleblowing claims.
ASSUMED CONFIRMED - as the Government's briefing note for the King's Speech states that "The Government is committed to delivering its New Deal for Working People in full".
2. Reforming employment status
Labour intends to consult on moving to a single status of worker. The law currently distinguishes between three types of employment status (employee, worker and self-employed) with different rights given to each.
Labour proposes to introduce a single status of “worker” which will include those that are currently workers and employees. All of these individuals will be entitled to the same basic rights and protections. This would mean, for example, that workers could bring a claim for unfair dismissal. A separate category covering those who are genuinely self-employed will remain.
As Labour have stated that they will consult on the detail of how this simpler framework would work, it seems unlikely that this proposal would form part of the bill that Labour will introduce in the first 100 days. Labour has also stated that there will be a single enforcement body to enforce workers’ rights.
CONFIRMED
3. Flexible working – a default right
Labour have stated that they will make flexible working a default right unless employers have a good reason to refuse it. Currently, there is a right to request flexible working from Day 1 of employment, but this would shift to a right to flexible working.
CONFIRMED - but with exceptions where it is not feasible.
4. Deadlines for Employment Tribunal claims
Labour have stated that the time limits for bringing all claims in an Employment Tribunal will increase from 3 months to 6 months.
ASSUMED CONFIRMED - as the Government's briefing note for the King's Speech states that "The Government is committed to delivering its New Deal for Working People in full".
5. Ban on zero hours contracts
Labour also pledged to ban exploitative zero hours contracts and contracts without a minimum number of guaranteed hours. We await further details of what is meant by “exploitative”, as this may not be a blanket ban.
In addition, Labour have stated that they will introduce a new right to have a contract that reflects the number of hours the employee regularly works, based on a 12-week reference period.
CONFIRMED
6. Ending “fire and re-hire”
“Fire and rehire” tactics means the practice of facilitating a change of employment terms by dismissing employees and then immediately re-engaging them on the new terms. A new Code of Practice was published in February 2024, but Labour does not believe it goes far enough and have committed to end the practice.
CONFIRMED
7. A right to switch off
The Labour manifesto also referred to the introduction of a new right to switch off, i.e. for employees to disconnect from work and not be contacted by their employer outside of working hours. This follows a trend emerging across other European countries (e.g. France) and beyond. How this would work in practice is at the moment unclear.
ASSUMED CONFIRMED - as the Government's briefing note for the King's Speech states that "The Government is committed to delivering its New Deal for Working People in full".
8. Changes to collective consultation rights
Collective redundancy consultation is required where an employer proposes to dismiss 20 or more employees at one “establishment”. Under Labour, this will change so that the number of redundancies across the whole business is determinative, rather than the number at each “establishment”.
CONFIRMED
9. Bereavement leave
Labour intend to introduce a right to unpaid bereavement leave. At the moment, this is only available following the death of a child.
ASSUMED CONFIRMED - as the Government's briefing note for the King's Speech states that "The Government is committed to delivering its New Deal for Working People in full".
10. Race and disability
Labour have stated that there will be new obligations on larger employers to produce ethnicity and disability pay gap reports.
CONFIRMED - and there will be a statutory right to equal pay for ethnic minorities and disabled people.
We will keep you updated on any further developments, and on the detail of the proposed changes, via our newsletter. Please get in touch if you have any questions in the meantime.
A new Labour government - July 2024
What does this mean for UK Employment law?
Labour’s manifesto included a pledge to implement “Labour’s Plan to Make Work Pay: Delivering a New Deal for Working People” in full. This will arguably represent the biggest change in Employment law in a generation and the impact on businesses will be huge.
Labour have promised to introduce an Employment bill within the first 100 days of office, so we should have further details on their plans very soon.
Below are the key changes that are relevant to most employers in the UK. As soon as further details are known, we will update you.
1. New Day 1 rights – including unfair dismissal
A key manifesto pledge was the introduction of several new “Day 1” rights, including the right to sick pay, parental leave and (crucially) the right not to be unfairly dismissed. Currently, an employee needs a minimum of 2 years’ continuous employment to bring an ordinary unfair dismissal claim. Very soon, this right will apply from Day 1 of employment.
Labour also plans to remove the cap on compensation for unfair dismissal (currently £115,115) such that compensation in successful claims is unlimited, like in discrimination and whistleblowing claims.
2. Reforming employment status
Labour intend to consult on moving to a single status of worker. The law currently distinguishes between three types of employment status (employee, worker and self-employed) with different rights given to each.
Labour proposes to introduce a single status of “worker” which will include those that are currently workers and employees. All of these individuals will be entitled to the same basic rights and protections. This would mean, for example, that workers could bring a claim for unfair dismissal. A separate category covering those who are genuinely self-employed will remain.
As Labour have stated that they will consult on the detail of how this simpler framework would work, it seems unlikely that this proposal would form part of the bill that Labour will introduce in the first 100 days.
Labour has also stated that there will be a single enforcement body to enforce workers’ rights.
3. Flexible working – a default right
Labour have stated that they will make flexible working a default right unless employers have a good reason to refuse it. Currently, there is a right to request flexible working from Day 1 of employment, but this would shift to a right to flexible working.
4. Deadlines for Employment Tribunal claims
Labour have stated that the time limits for bringing all claims in an Employment Tribunal will increase from 3 months to 6 months.
5. Ban on zero hours contracts
Labour also pledged to ban exploitative zero hours contracts and contracts without a minimum number of guaranteed hours. We await further details of what is meant by “exploitative”, as this may not be a blanket ban.
In addition, Labour have stated that they will introduce a new right to have a contract that reflects the number of hours the employee regularly works, based on a 12-week reference period.
6. Ending “fire and re-hire”
“Fire and rehire” tactics means the practice of facilitating a change of employment terms by dismissing employees and then immediately re-engaging them on the new terms. A new Code of Practice was published in February 2024, but Labour does not believe it goes far enough and have committed to end the practice.
7. A right to switch off
The Labour manifesto also referred to the introduction of a new right to switch off, i.e. for employees to disconnect from work and not be contacted by their employer outside of working hours. This follows a trend emerging across other European countries (e.g. France) and beyond. How this would work in practice is at the moment unclear.
8. Changes to collective consultation rights
Collective redundancy consultation is required where an employer proposes to dismiss 20 or more employees at one “establishment”. Under Labour, this will change so that the number of redundancies across the whole business is determinative, rather than the number at each “establishment”.
9. Bereavement leave
Labour intend to introduce a right to unpaid bereavement leave. At the moment, this is only available following the death of a child.
10. And for larger employers
Labour have stated that they will introduce a new requirement for employers with more than 250 employees to have a menopause action plan, and there will be new duties to produce ethnicity and disability pay gap reports.
What employers should be doing now:
Review the probationary period clauses in your employment contracts for new starters and ensure they are as robust as possible.
Review performance management processes to make sure you can deal quickly, effectively and fairly with unsuitable recruits. You may wish to have different procedures for employees with less than 2 years’ service.
Review your recruitment practices - make sure you are hiring only the best candidates and don’t hire in haste.
Larger companies should start monitoring and taking action on their ethnicity and disability pay gap now. This would include gathering preliminary data and considering whether you need to change your remuneration structures before you have to publish figures.
Check the company’s directors’ and officers’ insurance policy to ensure it covers liability for unpaid Tribunal awards, given that these may soon be uncapped.
Don’t put off any plans you have to change terms and conditions via a “fire and re-hire” process.
Paul Lane joins Cunningham Legal
We are delighted to announce that Paul Lane is joining us as a Senior Consultant at Cunningham Legal from 1 May 2024.
Paul previously founded and ran Lane Graham Solicitors, a specialist Employment law practice based in Canary Wharf, since 2007. He has over 25 years’ experience advising on a wide range of employment law matters and will bring further strength and depth to our team.
Welcome Paul!
Amy Cunningham quoted in Fortune Magazine - April 2024
Amy Cunningham has been quoted in an article from Fortune on the changes to the law on flexible working which came into effect this month.
Employment law update - April 2024
Read about the latest changes in Employment law in our quarterly newsletter here:
https://mailchi.mp/61964505b9f7/employment-law-update-april2024
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Employment law update - January 2024
Read about the latest changes in Employment law in our quarterly newsletter here:
https://mailchi.mp/bd5fe7c4e13a/employment-law-update-jan2024
To receive future updates direct to your email inbox, sign up here:
https://cunninghamlegal.us3.list-manage.com/subscribe?u=3746fa66b05d857e81f918899&id=91599883f5
Taxation of termination payments
There have been a number of recent changes to the rules on the taxation of termination payments, most notably relating to payments in lieu of notice (PILONs). It was also planned that any termination payment in excess of £30,000 would be subject to employer NICs from April 2018, but this change was delayed to April 2019. The autumn budget made clear that this change will be further delayed and will now only apply to a termination payment made on or after 6 April 2020. This means that, until this date, the additional NICs cost to employers of making a termination payment under a settlement agreement will be avoided. The existing employee NICs exemption will remain in place however.
For further information, see https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/752202/Budget_2018_red_web.pdf
National Living Wage came into force on 1 April 2016
The new rate of £7.20 per hour applies to workers aged 25 and over. Employers should check they are complying with the new law, as it is a criminal offence not to pay someone the NMW or the NLW. Employers who offer salary sacrifice to support employee benefits should take particular care to ensure that the sacrifice does not result in a salary that is below the appropriate minimum rate.
Shared Parental Leave - one year on
Interesting article in the FT about fathers' experiences of SPL and why the take-up rate has not been as high as the Government predicted
7 March 2016 - the new FCA and PRA regime comes into force
The new Financial Conduct Authority and Prudential Regulation Authority regime, that applies to individuals working for UK banks, building societies, credit unions and PRA-designated investment firms, and branches of foreign banks operating in the UK, came into force today, 7 March 2016.
Job adverts and discrimination
A useful checklist just published by the EHRC incorporating guidance for employers on avoiding discrimination when advertising a job. See also their new guidance note and FAQ document.
Employment Appeal Tribunal confirms holiday pay must include commission
Lock v British Gas focussed on whether holiday pay should include sales-related commission, but also the interaction of EU and UK law. Mr Lock was paid basic salary and results-based commission, but only basic salary during periods of annual leave. He brought a claim and the Employment Tribunal held that his holiday pay should include commission (because it is necessary to add words to the Working Time Regulations 1998 to give effect to the Working Time Directive, so that commission and similar payments are included in holiday pay). British Gas appealed to the Employment Appeal Tribunal. The EAT dismissed the appeal yesterday (22 February 2016). It held that holiday pay should include commission and that it's necessary to imply words into the Working Time Regulations 1998 to comply with EU law. See also Bear Scotland & Others v Fulton & Others. These cases are particularly relevant for any employers whose workers' pay includes commission, bonuses and overtime payments.
Dyslexia and reasonable adjustments
A woman with dyslexia has recently won a disability discrimination claim against Starbucks, who the tribunal found discriminated against her and failed to make reasonable adjustments. It's a useful reminder to employers about their legal obligations to disabled employees, including the importance of understanding the effects that an employee's disability may have and what adjustments should be made to ensure that the employee is not put at a disadvantage. Any employers that are unclear about their obligations should seek advice from an employment lawyer. In the case of dyslexia, there's useful guidance on the British Dyslexia Association website
Smart working: The quiet revolution
Worth a read for senior managers across all sectors looking for insights and support in implementing smart working practices, which BSI describes as harnessing the benefits of flexible working in a strategic way, and thereby delivering benefits for employers and employees.
City law firm hourly rates hit £1100 an hour
Alternatively, contact Cunningham Legal for first class employment law and HR advice from a London employment lawyer with over a decade of experience in top City law firms for a fraction of the price.
The benefits of employee ownership
Some useful insights from Postlethwaite about the benefits of employee ownership, including the fact that employee owned businesses grew sales by 11.1% during the recession as compared to just 0.6% for non-employee owned businesses. Something for senior management to consider during turbulent economic times.
Organisational culture and equality
Interesting interview with the new head of the 30% Club, Brenda Trenowden, who argues that companies need to be "gender aware" rather than "gender blind", that the focus needs to shift to developing a strong pipeline rather than focussing primarily on board level appointments and that agile working by both men and women is the way forward.
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