EmpLaw Newsletter November 2024

The duty to prevent sexual harassment in the workplace becomes law

On 26 October 2024, the new pro-active duty to prevent sexual harassment in the workplace came into force. Employers are now under a legal duty to take reasonable steps to prevent sexual harassment in the workplace. The steps taken should not be limited to the risk of harassment by colleagues but should extend to third party harassment risk too.

There are two potential consequences if the duty is breached. Firstly, the Equality and Human Rights Commission can investigate non-compliance, issue unlawful act notices, require action plans to be prepared and, if the action plan is not followed, levy a potentially unlimited fine. Secondly, if an employer loses a sexual harassment claim in the tribunal, then the tribunal can uplift compensation by up to 25% if it finds that the employer failed to comply with the duty.

Employers need to look carefully at the policies and processes which they currently have in place and consider critically whether any further steps should be taken to prevent sexual harassment. To assist with this, the Equality and Human Rights Commission has published an 8-step guide to preventing sexual harassment at work which can be accessed here. The proposed steps comprise:

1. Developing an effective anti-harassment policy
2. Engaging with staff
3. Assessing risk and taking action to minimise risk
4. Putting in place clear reporting channels
5. Conducting training for all staff
6. Acting promptly if a complaint is made
7. Considering any specific harassment risk posed by third parties and taking steps to prevent this type of harassment
8. Monitoring the effectiveness of steps taken

Claimant who was called a “bald c**t” by his colleague succeeds in sex-related harassment claim

The nuts and bolts of a harassment claim under Equality Act 2010 involve the following:

• Unwanted conduct;
• Related to a protected characteristic (either sex, race, age, disability, sexual orientation, religion or belief or gender reassignment) or conduct of a sexual nature;
• Which has the purpose or effect of violating the employee’s dignity or creating a hostile, degrading, humiliating or offensive environment.

Liability can only be avoided if the employer can show it took all reasonable steps to prevent harassment from occurring.

A recent Employment Appeal Tribunal reminds employers to take a broad-brush approach when considering whether conduct is related to a protected characteristic. Conduct which might not immediately appear to be related to a protected characteristic may still be so.

In Finn v British Bung Manufacturing Company, the Claimant worked in a male-dominated environment where harsh language was common. After a dispute with a colleague about machinery, the colleague insulted him by calling him a "bald c**t" and threatened violence. The Claimant was later dismissed and filed claims for unfair dismissal and sex-related harassment due to the comment about his baldness.

The Employment tribunal ruled in favour of the Claimant on the harassment claim, stating that the comment about his appearance (baldness) was personal unwanted conduct and intended to insult and create a hostile environment. The Tribunal found that baldness is more common in men, making the insult related to the Claimant’s sex.

The Respondent appealed, arguing that since baldness can affect both men and women, it should not be considered sex-related harassment. However, the Employment Appeal Tribunal dismissed the appeal, ruling that harassment does not have to be exclusive to one gender to be related to sex.

Bereavement leave: where are we now and where are we going?

Employees who suffer any form of bereavement currently have very limited rights to take time off work to deal with it. Much currently falls to the goodwill and understanding of employers. Employees are often forced into taking time off sick or on holiday to deal with their loss.

The legal landscape is (slowly) changing. Since April 2020, employees have had a right to parental bereavement leave. This is a right of each parent to two weeks off work at any point in the 56 weeks following:

• the death of a child, if they die under the age of 18
• a child who is stillborn after 24 weeks' pregnancy

Employees have this right from the day they start their job. Unless the employer offers more generous terms, the time off is paid at the same weekly rate as statutory maternity pay. If more than one child dies, the employee is entitled to two weeks' statutory parental bereavement leave for each child.

This law covers employees who experience the loss of a child but there remains no legal provisions in place for employees suffering wider bereavement. The recently published Employment Rights Bill aims to change this. The Bill introduces a free-standing right to bereavement leave of at least one week (and pay for that week at the same rate as statutory maternity pay). Exactly which ‘loved ones’ will be covered will be set out in regulations. The existing provision for parental bereavement leave is unchanged and will sit alongside and in addition to this new right.

Whilst the vast majority of the Bill’s provisions are unlikely to take effect until 2026, the introduction of bereavement leave is likely to happen sooner rather than later. The government’s Next Steps policy paper states that this change will come in ‘immediately’. Given the time it will take for the Bill to make its way through Parliament, it’s likely to be Spring 2025 at the earliest before the law changes.

Employment Rights Bill: Unfair dismissal as a Day 1 right

There has always been some form of qualifying period for employees before they gain eligibility to claim ordinary unfair dismissal. The period is currently 2 years, giving employers a decent amount of time to assess the quality and conduct of new recruits and to take decisions to terminate if issues arise.

Clause 19 of the Employment Rights Bill proposes to change all that, and to extend ordinary unfair dismissal protection to employees from their very first day of employment. The government estimates that approximately 9 million additional employees will be entitled to bring claims for unfair dismissal under these new rules.

Businesses will have ample time to prepare for the change – the government will not implement it until autumn 2026 at the earliest. Here is our rundown of the proposals:

Key considerations

An employer wishing to avoid the risk of an ordinary unfair dismissal claim once it becomes a day 1 right would need to be able to point to a potentially fair reason for dismissal in every case. The law recognises 5 such reasons: conduct, capability, redundancy, illegality and some other substantial reason. They would also need to show that dismissing for that reason was substantively and procedurally fair in all the circumstances.

Will there be any exceptions?

The removal of the qualifying period is absolute. The right to claim unfair dismissal will apply to all employees from the moment that they start work.

However, the government proposes to consult on the possibility of having slightly different rules on liability (and potentially compensation) in what it terms the ‘initial period of employment’. The government indicates in its Next Steps policy paper that its preference is for this period to run for the first nine months of employment. This will effectively be a statutory probationary period.

The government proposes that a “lighter touch” process might be acceptable for dismissals for conduct or performance during this period. Quite what this lighter touch process will look like will be fleshed out during consultation in the coming months. It is clear that dismissing an employee during probation will still necessitate some form of clear and fair process.

Notably, dismissals for redundancy during the statutory probationary period will not, as it currently stands, be able to benefit from the “lighter touch” rules which will govern performance or conduct dismissals during the same period. This means that employees could still claim the full force of unfair dismissal protection from day one if made redundant, without any probationary protection applying. If this comes to pass, then expect sign-off for new recruits to become increasingly difficult with businesses needing to be absolutely certain of additional need before biting the bullet and offering jobs.

How will compensation work?

Compensation for ordinary unfair dismissal is split between a basic award (which reflects statutory redundancy pay) and a compensatory award (which is a just and equitable sum awarded taking account of losses, past and future, flowing from the dismissal) up to the statutory cap (currently £115,115) or one year’s salary, whichever is lower. Compensation can be reduced for matters such as the contributory fault of the employee. No account is generally taken of length of employment when looking at the compensatory award. The same compensatory principles are followed if an employee was employed for 2 years or 20 years.

Once unfair dismissal becomes a day 1 right, we may end up with two different compensatory regimes, one applicable to dismissals outside of the statutory probationary period and one for dismissals during it. Indeed, the Bill includes provisions to limit potential compensation for successful claims during probation. Exactly how it will be limited is not currently stated but the government has committed to consulting on whether tribunals should award less compensation in such cases compared to claims made after the probationary period.

What can employers be doing now?

Contractual probationary periods are usually six months in duration. The government’s suggestion of a nine-month statutory probationary period may lead employers to consider revising contractual probationary periods for new starters to align with the likely incoming statutory period. Remember, this change will not be coming in for almost two years. Your new starters now will already have unfair dismissal rights under the current eligibility requirements (2 years) by the time it becomes law.

It is also a good idea to review recruitment, induction, training and initial appraisal processes now. Make sure that you have robust probationary monitoring in place and that all managers are trained to follow a clear and accountable appraisal structure. The more ingrained these processes are, the more likely that your business will be ready to meet the increased risk head-on once the law changes.

Government launches consultation on appropriate level of statutory sick pay for low earners

Statutory Sick Pay is the payment made to employees when they are absent from work due to sickness. Currently, SSP is not paid during the first three days of any absence. These are known as ‘waiting days’. If an absence continues after the ‘waiting days’, then SSP is generally paid to employees at a flat rate (currently £116.75 per week) for up to 28 weeks of absence. There is an exception where an employee earns less than the ‘lower earnings limit’ (currently £123 per week). Employees earning less than the lower earnings limit do not receive any SSP payments at all during sickness absence.

All this is due to change. Under clause 9 of the Employment Rights Bill, the government proposes to pay SSP from the first day of any absence and to remove the lower earnings limit requirement. There is obviously a risk of abuse if employees who earn less than the current flat rate for SSP when they are actually at work are entitled to a higher amount (the SSP flat rate) when they are off sick. To get around this, for those with weekly earnings lower than the flat rate for SSP (currently £116.75 per week), the Bill proposes to set SSP payments as a ‘prescribed percentage of the employee’s normal weekly earnings’.

The government has launched a consultation seeking views on what that percentage replacement rate should be. The consultation paper outlines some illustrative examples that set out the broad costs for employers and potential impacts on low earners of different percentage rates. The examples range from 60% of earnings, which is the lowest rate that the government’s internal modelling suggests would not leave employees worse off, to 80% of earnings, as proposed in the 2019 Health is Everyone’s Business consultation.

The consultation remains open until 4 December. Any change is unlikely to come into effect until Spring 2025 at the earliest.

Protection from redundancy during maternity leave

Employees who face a redundancy situation when on maternity leave have special protection in law under Regulation 10 of the Maternity and Parental Leave Regulations 1999. This provision requires employers to offer any suitable alternative roles available in a redundancy situation to employees who are on maternity leave. Similar protections exist for those on adoption and shared parental leave. In April this year, the protection was extended to cover a period after the employee returns to work (generally 18 months from the due date) and also to cover pregnancy. 

In the recent case of Hunter v Carnival Plc, the Employment Appeal Tribunal looked at the protection provided by Regulation 10 and whether it should ‘bite’ to keep an employee in role where the number of roles is reducing but not disappearing completely. In this case, the Claimant was on maternity leave when a redundancy exercise took place in which 21 team leader posts were reduced to 16. The tribunal held that the remaining roles amounted to suitable alternative vacancies within the meaning of Regulation 10 and the Claimant should have been retained in one of them.

The Employment Appeal Tribunal disagreed. Under Regulation 10(2), “Where there is a suitable available vacancy, the employee is entitled to be offered (before the end of her employment under her existing contact) alternative employment”.  In this case, the tribunal had been wrong to find there was a ‘vacancy’.  By the time the Claimant had been selected for redundancy, there was no vacancy because the remaining 16 roles were not vacant.  The EAT distinguished the position where two roles are being amalgamated into one different role, because that would be a new vacancy.

This case is a reminder of the special rules in redundancy situations for pregnant employees, those on maternity, shared parental or adoption leave and those who have recently. It is also a reminder of the limitations of those special rules. There is no requirement to automatically keep employees who have the protection of Regulation 10 in role where, as part of a redundancy process, those roles are reducing but are not disappearing.

Fire and Rehire: Changes in the Employment Rights Bill

The Employment Rights Bill, published on 10 October, introduces key changes to 'fire and rehire' practices (otherwise known as 'dismissal and re-engagement'). This process involves dismissing an employee who refuses to accept new contract terms and offering them re-engagement on the revised terms. While currently legal, provided there’s a sound business reason and proper consultation, this practice carries risks such as unfair dismissal claims.

Current Legal Framework

Under current law, 'fire and rehire' is allowed if it falls within the potentially fair reason of ‘some other substantial reason’ (SOSR) under Employment Rights Act 1996. Employers must demonstrate a legitimate business reason and that they have consulted employees appropriately. If these conditions are met, such dismissals can be fair.

Proposed Changes

The new Bill makes significant changes. Once enacted, it will be automatically unfair to dismiss an employee for refusing to accept changes to their terms of employment or for replacing them with another employee under new terms. There is a limited exception for businesses facing imminent financial distress, but this is narrowly defined, meaning most employers won’t be able to use fire and rehire once the new law takes effect.

Preparing for the Changes

Although the Bill likely won’t become law until 2026, employers can take steps now to prepare:

1. Consider variation clauses: Check contracts of employment for express variation clauses to allow for (some level) of contractual change without having to rely on agreement or fire and rehire.
2. Audit current contracts: Address problematic contract terms while fire and rehire remains legal.
3. Focus on employee agreement: Employers will need to secure employee buy-in for future changes by offering incentives in exchange for voluntary agreement.

The Employment Rights Bill marks a significant shift, effectively banning fire and rehire except in cases of financial distress. However, these changes won’t take effect immediately, and the Bill could still be amended. Employers should use this time to adapt their practices and renegotiate contracts as needed.

Failing to give employee a leaving card was not sex-related harassment

In legal terms, under Equality Act 2010, harassment is only unlawful if it is ‘related to’ a relevant protected characteristic. Alongside sexual harassment, there are seven protected characteristics relevant to harassment: sex, age, race, disability, sexual orientation, gender reassignment and religion or belief.

The test of conduct needing to be ‘related to’ a protected characteristic is wider than the test for direct discrimination, which requires treatment to be ‘because of’ a protected characteristic. However, there does have to be some form of connection. Inoffensive conduct will not be harassment if it is not, in some way, ‘related to’ the claimed protected characteristic.

This was illustrated by the recent case of Conaghan v IAG GBS Ltd. The Claimant was made redundant. She brought a raft of claims against the Respondent including one of sex-related harassment relating to a failure, on the part of the Respondent, to give her a leaving card when her employment ended.

In order to successfully claim sex-related harassment, the Claimant was required to show that the failure to give her a leaving card was:

1. Unwanted conduct;
2. Related to her sex;
3. Which had the purpose or effect of violating her dignity or creating an intimidating, hostile, degrading or offensive environment for her.

The Employment tribunal held that the failure to send a leaving card was none of these things. It did not get over the foundational hurdle of being ‘related to’ the Claimant’s sex. Her harassment claim failed. The tribunal found that two other male employees who were made redundant at the same time as the Claimant hadn’t received leaving cards either. There was no connection to her sex at all.

And finally,

a tribunal case recently had to consider whether a man had suffered age discrimination when an older colleague broke wind on him. The tribunal concluded that he had. In the case of XYV v Birmingham City Council the Claimant’s colleague, who was in his 50s, broke wind on him as he ate his lunch. He later threatened that he could get rid of him. The tribunal found that this was age-related harassment. The Claimant’s colleague referred to the Claimant, who was younger than him, as a “pup” and said he was “only a trainee” and, on a separate occasion, a “youngster”.

This case is a rather extreme example of the challenges faced by multi-generational workplaces. Employers and HR teams need to work hard to foster a culture of mutual respect across the different generations working side by side. Expected standards should be made clear and behaviour such as that shown to the Claimant in this case should not be tolerated.