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Employment Law General Update – January 2025

  • Anne-Marie Pavitt,

  • 24th January 2025

Employment Update Employment Law

This article summarises the main developments that will affect employment law in 2025 and beyond.

Employment Rights Bill and related consultations

Other employment measures

Employment Rights Bill and related consultations

Prior to its success in the general election that took place on 4 July 2024, the Labour Party proposed wide-ranging and fundamental reform of employment law. It promised that several of its reforms would be contained in an Employment Rights Bill (ERB), which was introduced on 10 October 2024.

Together with the draft ERB, on 10 October 2024, the government published a policy paper, Next Steps to Make Work Pay (Next Steps paper), which set out the steps the government intends to take following the publication of the ERB. It confirms that further detail on many of the policies contained in the ERB will be provided through partnership with business, workers and trade unions, regulations, and in some cases codes of practice, after the ERB has received Royal Assent, which is expected to be in 2025.

The ERB makes provision for wide-ranging changes to be made to employment law, including in relation to unfair dismissal, fire and rehire, collective redundancies, zero hours and low hours contracts, trade unions and industrial action, sexual harassment and third-party harassment, statutory sick pay (SSP), flexible working and family leave. In October 2024, the government published four consultations as part of its first phase of consulting relevant stakeholders. Further consultations are expected in 2025, which will deal with matters to be included in supporting regulations.

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Bereavement leave

The existing right to two weeks’ parental bereavement leave following the death of a child under 18 or a stillbirth will be extended to be an entitlement to more general “bereavement leave”, which will apply to the loss of a wider group of persons (clause 14, ERB). Like the current provision for parental bereavement leave, bereavement leave will be a day-one right. Regulations will specify the relationships with a person who has died that will qualify an employee to take bereavement leave, and the government will consult on the details to be set out in secondary legislation.

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Collective redundancies

The ERB strengthens redundancy rights and protections by removing the “at one establishment” test for collective redundancies, meaning that the threshold of 20 or more redundancies will be met when that number is impacted across the entire business, rather than at one site. This will increase the obligations on multi-site employers to collectively consult and will require them to keep rolling records of redundancies proposed across their multiple sites. In addition, the government is consulting about raising the current level of the protective award from 90 to 180 days’ pay, or to an uncapped amount and allowing employees to claim interim relief where they have a claim for a protective award or a claim for unfair dismissal in a fire and rehire scenario. During 2025, the government also plans to consult on increasing the minimum collective consultation period when an employer is proposing to dismiss 100 or more employees from 45 to 90 days.

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Dismissal and re-engagement (fire and rehire)

The practice of fire and rehire has received widespread negative press coverage in recent years following a number of high-profile cases. These include the dismissal of almost 800 employees by P&O Ferries in 2022, to be replaced by lower-paid agency staff, and also a case where Tesco (unsuccessfully) sought to use the practice to overturn preferential pay rates it had agreed on a “permanent” basis with staff who agreed to relocate.

The ERB would restrict the ability of an employer to use dismissal and re-engagement (known as “fire and rehire”) as a lawful means of changing an employee’s contractual terms, save where there is genuinely no alternative, due to financial difficulties which threaten the employer’s ability to carry on business as a going concern. It does this by making any dismissal automatically unfair where the reason for dismissal is that the employee did not agree to the employer’s attempt to vary their terms and conditions, or because they intended to employ another person to carry out substantially the same role. On 21 October 2024, the government published a consultation on strengthening the remedies against abuse of the fire and rehire and collective consultation rules (see above). The consultation closed on 2 December 2024.

It is not clear what the government’s intentions are with regard to the Statutory Code of Practice on Dismissal and Re-engagement which was introduced under the previous Conservative government but only came into force on 18 July 2024. Despite its previous strong criticisms of the Code as being “inadequate”, it remains in force for now. It is possible that the government still intends to replace the Code with another one containing more stringent obligations on employers, as envisaged in the Plan to Make Work Pay, although any new Code of Practice would need to be consulted on before it could receive parliamentary approval.

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Equality action plans and menopause support

Future regulations made under clause 26 of the ERB will require employers with 250 employees or more to develop and publish equality action plans showing what steps they are taking in relation to prescribed matters related to gender equality and to publish prescribed information relating to their plans.

Matters relating to gender equality will be those concerning the advancement of equality between male and female employees and will include addressing the gender pay gap and supporting employees going through the menopause. In November 2024, proposed amendments to the ERB were published which will be considered by the Public Bill Committee. An amendment proposed by the government would require employers to include an explanation in their equality action plans on how they are supporting employees with menstrual problems and menstrual disorders.

The government will consult the Equalities and Human Rights Commission (EHRC) on the content of the regulations before they are published.

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Fair Work Agency

The ERB contains provisions permitting the Secretary of State to delegate their labour market enforcement functions to a public authority and to appoint enforcement officers. The Next Steps paper confirms that this will be the new Fair Work Agency (FWA), which will bring together the existing enforcement functions of HMRC (in relation to the national minimum wage (NMW)), the Employment Agency Standards Inspectorate (EASI) and the Gangmasters and Labour Abuse Authority (GLAA). The introduction of a single enforcement body has long been on the cards and was one of the government’s key manifesto pledges. However, whether the FWA succeeds in improving enforcement is likely to depend on the level of financial resources it is allocated, which is not yet clear. It is not yet known when the FWA will be established, although it is likely to be a number of years before it is fully operational.

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Family leave

Paternity leave and unpaid parental leave will become a day-one right for eligible employees. The government also stated in the Next Steps paper that it intends to make it unlawful to dismiss employees who have been pregnant within six months of their return to work, except in specific circumstances. Regulations are awaited to define what these specific circumstances will be. The government also stated in the Plan to Make Work Pay that it would conduct a review of the current parental leave system during the first year of the Labour government, so this is expected by July 2025.

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Flexible working

The existing day-one right to request flexible working under Part VIIIA of the ERA 1996 (sections 80F to 80I) (as amended) together with the Flexible Working Regulations 2014 (SI 2014/1398) (Flexible Working Regulations) (as amended) will remain, but the ERB will introduce a reasonableness test into the regime, providing that employers will only be able to rely on one of the statutory reasons to refuse a request for flexible working where it is “reasonable for the employer to refuse the application on that ground or those grounds”. In addition, employers will be required to state and explain what the ground for any refusal is and why the refusal is considered reasonable. The Next Steps paper confirmed that there will be a consultation to develop the detail of the approach to be taken on flexible working.

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Sexual harassment

The ERB will amend section 40A of the EqA 2010 to require employers to take “all reasonable steps” to prevent sexual harassment, reflecting the wording originally contained in the Worker Protection Bill. Currently, employers are required to take reasonable steps to prevent sexual harassment of their employees during the course of their employment under the Worker Protection (Amendment of Equality Act 2010) Act 2023, which came into force on 26 October 2024. Employers will also be under a duty to take “all reasonable steps” to prevent third-party sexual harassment, and to prevent third-party harassment in relation to the other relevant protected characteristics.

In addition, the ERB will amend the whistleblowing provisions of the ERA 1996 to make it clear that reporting sexual harassment will amount to a qualifying disclosure.

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Statutory Sick Pay (SSP)

The ERB provides employees with the right to SSP from the first sick day rather than from the fourth day and removes the requirement for the employee’s earnings to be not less than the lower earnings limit to be eligible for SSP.

On 21 October 2024, the government published a consultation on SSP. The consultation, which closed on 4 December 2024, sought views on what the percentage of average weekly earnings should be for the purposes of calculating the rate of SSP for some low-earning employees.

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Trade unions

The ERB will repeal the Strikes (Minimum Service Levels) Act 2023. While nearly all of the restrictions placed on industrial action and picketing by the Trade Union Act 2016 will be removed, the time-limited mandate for industrial action following a ballot will remain. The ERB will introduce the right to a statement of trade union rights and the right for trade unions to access workplaces, it will simplify the rules on trade union recognition, introduce protection against detriment for taking industrial action and increase protection against dismissal for taking industrial action. These are summarised below.

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Right to a statement of trade union rights

The Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA 1992) will be amended to require employers to give workers a written statement advising that they have the right to join a trade union at the same time as providing the worker’s section 1 statement and at other prescribed times.

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Right of trade unions to access workplaces

Unrecognised unions will be provided with the opportunity to recruit and organise within a workplace with the aim of gaining recognition. Trade unions and employers will be able to enter “access agreements” providing union officials with access to the employer’s workplace for the purposes of meeting, representing, recruiting or organising workers, or facilitating collective bargaining (but expressly not to organise industrial action). The union may apply to the Central Arbitration Committee (CAC) to determine workplace access if the employer fails to respond to its request for an access agreement. Either party may make an application where negotiations are unsuccessful.

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Simplifying statutory trade union recognition

The statutory scheme for trade union recognition set out in Schedule A1 to TULRCA 1992 will be amended to:

  • Enable the 10% membership threshold for the CAC to accept a trade union recognition application (and at other stages of the recognition scheme) to be reduced to between 2% and 10%.
  • Remove the requirement at the application stage (and at other stages of the recognition scheme) for a union to demonstrate that there is likely to be majority support for trade union recognition.
  • Remove the 40% support threshold from recognition ballots.

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Protection against detriment for taking industrial action

TULRCA 1992 will be amended to provide workers with the right not to be subjected to detriment of a prescribed description by any act (or any deliberate failure to act) by their employer, if the act (or failure) takes place for the sole or main purpose of preventing or deterring the worker from taking protected industrial action, or penalising the worker for doing so.

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Dismissal for taking industrial action

TULRCA 1992 will be amended to provided that for the full duration of an official, lawful strike and after that strike has concluded, an employee will be automatically unfairly dismissed where the reason (or, if more than one, the principal reason) for the dismissal is that the employee took such protected industrial action.

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Consultation on further proposals

The government’s consultation, Making Work Pay: creating a modern framework for industrial relations, which closed on 2 December 2024, sought views on strengthening provisions to prevent unfair practices during trade union recognition, simplifying industrial action ballots, reducing notice of industrial action, extending the permitted duration of industrial action, updating the law on repudiation of industrial action and on prior call, and on enforcement of the trade union right to access workplaces.

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Tribunal time limits

In a set of amendments to the ERB published in November 2024, the government confirmed that it would extend the time limits for bringing all tribunal claims from three to six months. It is not yet clear when this measure will take effect.

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Unfair dismissal

Under the ERB, the right to bring a claim for unfair dismissal will become a day-one right for employees, subject to a new modified “light-touch” dismissal procedure applicable in most cases during an initial period of employment, which will be set by regulations but must be between three and nine months. It removes the two-year qualifying period for ordinary unfair dismissal protection by repealing section 108 of the Employment Rights Act 1996 (ERA 1996). Much of the detail will be contained in regulations and is as yet unknown, but this will represent a hugely significant change in the unfair dismissal landscape. To allow for full consultation and a substantial period for employers to prepare and adapt, the unfair dismissal reforms will take effect no sooner than autumn 2026.

In November 2024, proposed amendments to the ERB were published which are being considered by the Public Bill Committee. A government amendment will allow the Secretary of State to specify a cap on the compensatory award for employees unfairly dismissed during the initial period of employment provided for in the ERB.

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Zero hours and “low hours” contracts

Employee representative bodies and trade unions have long condemned the use of zero hours contracts as a means of abusing vulnerable, low-income workers, and providing no job security, rights or guaranteed income. There is very limited protection for workers on such contracts. The ERB will introduce a duty on employers to offer a guaranteed hours contract that reflects the hours qualifying workers regularly work over a reference period (to be specified in regulations, but the government suggested in the Next Steps paper that in its view it should be 12 weeks). The ERB also places a duty on employers to provide reasonable notice of shifts, with workers being entitled to compensation if their shift is cancelled, moved or curtailed at short notice.

On 21 October 2024, the government published a consultation on the application of the zero hours contracts provisions to agency workers. The consultation, which closed on 2 December 2024, explored who should be responsible for offering guaranteed hours to eligible workers: the agency or the hirer. The government notes that a difficulty of making agencies responsible is that they have little or no control, since the demand for hours is largely dictated by hirer. Hirers would, therefore, be in a better position to forecast and manage the flow of work. However, requiring hirers to offer guaranteed hours might effectively make them the agency worker’s employer.

In November 2024, proposed amendments to the ERB were published which are being considered by the Public Bill Committee. Substantial government amendments were put forward in relation to zero hours and “low hours” contracts, including new requirements for employers to take reasonable steps to ensure that workers are given specified information in relation to their rights to guaranteed hours during an “initial information period” and to give workers a notice where they consider an exception to the duty to make a guaranteed hours offer applies, or where a guaranteed hours offer that has been made is treated as having been withdrawn.

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Other employment measures

Draft Equality (Race and Disability) Bill

A draft Equality (Race and Disability) Bill (Race and Disability Bill) was announced in the King’s Speech 2024, to be led by the Government Equalities Office (GEO). It will be published in draft form for consultation and deliver Labour’s manifesto commitment to “enshrine the full right to equal pay in law” for ethnic minorities and disabled people. There is expected to be significant consultation on the draft Race and Disability Bill and so it is anticipated that it will progress more slowly than the ERB.

The Race and Disability Bill will tackle two main issues:

  • Enshrine in law the full right to equal pay for ethnic minorities and disabled people. This will make it easier for them to bring unequal pay claims, given the existing barriers when bringing pay discrimination claims on the grounds of ethnicity or disability.
  • Introduce mandatory ethnicity and disability pay reporting for employers with 250 or more employees. This will help to close the ethnicity and disability pay gaps, enabling employers to constructively consider why they exist and how to tackle them.

The Next steps paper also states that the government will create a new regulatory enforcement unit for equal pay.

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Neonatal care leave and pay

The Neonatal Care (Leave and Pay) Act 2023 received Royal Assent in May 2023 and was expected to come into force in April 2025 under the previous Conservative government. The government has confirmed this will come into effect on 6 April 2025. HMRC has published a policy paper on the tax treatment of statutory Neonatal Care Pay (see HMRC: Income Tax: tax treatment of Statutory Neonatal Care Pay). The Act will introduce statutory neonatal leave and pay for up to 12 weeks for parents of babies requiring neonatal care, which must be taken within 68 weeks of birth.

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Right to disconnect

The Plan to Make Work Pay stated that a new “right to switch off” would be introduced, providing workers with the right to disconnect from work outside of working hours and not be contacted by their employer. This would follow similar models to those that are already in place in Ireland and Belgium, giving workers and employers the opportunity to have constructive conversations and work together on bespoke workplace policies or contractual terms that benefit both parties.

There is nothing on this new right in the ERB, and in the Next steps paper, the government confirmed that it would take forward the right to switch off through a statutory Code of Practice. It is expected that a consultation on the new code of practice will be issued in 2025.

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Gender identity and gender critical beliefs

Gender identity is a highly charged issue with polarised views about, on the one hand, a transgender person’s right to have their identity recognised, and on the other hand, so-called “gender critical beliefs” that a person’s sex is an immutable biological fact and that someone’s gender is different from their sex.

Recent case law has recognised gender critical beliefs as being capable of protection under the Equality Act 2010 (EqA 2010) as a philosophical belief (Bailey v Stonewall and others ET/2202172/2020). This provides scope for conflict with other protected characteristics under the EqA 2010, including the protected characteristic of gender reassignment (Fischer v London United Busways Ltd ET/2300846/2021), and poses a challenge for employers who are responsible for preventing discrimination and harassment in the workplace. In For Women Scotland Ltd v Scottish Ministers, the Inner House of the Court of Session confirmed that the definition of “woman” in section 212(1) of the Equality Act 2010 includes trans women with a gender recognition certificate. The case has been appealed and was heard by the Supreme Court on 26 and 27 November 2024.

In May 2024, the Minister for Women and Equalities issued a “call for input” seeking examples of policies or guidance issued by public bodies, or those that advise public and private organisations, which might wrongly suggest that people without a gender recognition certificate (GRC) have a legal right to access single-sex spaces and services according to their self-identified gender. The call for input on incorrect guidance on single-sex spaces closed on 26 June 2024.

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Artificial intelligence (AI) in the workplace

Modern workplaces are increasingly receptive to and reliant on tools powered by artificial intelligence (AI) such as machine learning, GenAI and automated decision-making to perform certain human resources and employee management functions. In addition, the development of GenAI applications, which can be used to perform a variety of work-related tasks, means that AI is more accessible to the workforce than in the past.

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AI reform

In terms of reform in this area, the government’s Next Steps paper, promised that a consultation would be issued on how to implement measures on surveillance technologies and negotiations with trade unions and staff representatives.

Prior to this, the King’s speech, which was delivered in July 2024, announced that the government:

“… will seek to establish the appropriate legislation to place requirements on those working to develop the most powerful artificial intelligence models”.

Labour’s manifesto (Labour: Change), published in June 2024, promised that Labour would create a new Regulatory Innovation Office, bringing together existing functions across government, to help regulators update regulation and to co-ordinate issues that span different sectors, as it considers that regulators are currently ill-equipped to deal with the dramatic development of new technologies. It also promised to ensure the safe development and use of AI models by introducing binding regulation on the companies developing the most powerful AI models.

Labour’s Plan to Make Work Pay, noted that new technologies such as AI have the potential for positive change, including boosting wages, improving productivity and empowering workers. However, given the risks posed, Labour’s approach will be to protect good jobs and ensure good future jobs. It plans to put in place appropriate rights and protections to keep pace with technological change, while safeguarding against discrimination. At a minimum, Labour stated that it will ensure that proposals by employers to introduce surveillance technologies will be subject to consultation and negotiation, with a view to reaching agreement with trade unions or elected staff representatives. This would not override the provisions of any collective agreement relating to surveillance.

Labour’s New Deal green paper, which was first published in September 2021, had previously stated that proposals by an employer to introduce surveillance technologies would be subject to consultation and agreement by trade unions or elected staff representatives, although it was subsequently reported that this new “right” could be implemented by way of best practice advice or secondary legislation, in a perceived watering down of the original pledge.

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TUC AI taskforce

Labour has been involved with the TUC’s AI taskforce, which in April 2024 published its draft Artificial Intelligence (Employment and Regulation) Bill, setting out recommended regulation of the use of AI in the workplace.

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EU position

The EU is taking a more interventionist approach than the UK. A new Regulation, the EU AI Act, was formally adopted by the Council of the EU on 21 May 2024. The EU AI Act applies to public and private actors inside and outside the EU if the AI system affects individuals in the EU, and categorises AI systems into risk levels.

The Platform Workers Directive entered into force on 1 December 2024. Member states will have two years to incorporate the provisions of the Directive into their national legislation. The Directive provides new rights aimed at promoting transparency, fairness and accountability in algorithmic management used in platform work.

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International convention on AI

Since coming to power, on 5 September 2024, the Labour government signed the new international treaty, the Council of Europe’s Framework Convention on Artificial Intelligence and Human Rights, Democracy and the Rule of Law. The AI treaty has also been signed by the European Commission.

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Managing AI risk

Due to the increasing use of AI in the workplace, there is a greater need to assess and manage the associated risks. In March and November 2024, new guidance was published by the government and the ICO specifically aimed at AI use in the HR and recruitment sectors. There are several actions that an employer can take to mitigate the risks, such as undertaking risk assessments and carrying out due diligence with suppliers of AI systems.

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Immigration

From 31 December 2024, the sponsor licence guidance was updated to prohibit Skilled Worker sponsors from passing on the cost of the sponsor licence fee or associated administrative costs or the Certificate of Sponsorship (CoS) fee (for CoS assigned on or after 31 December 2024). 
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Further Information

If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: hello@dixcartuk.com

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The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.

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Employment Law Case Update – February 2023

  • Employment,

  • 27th February 2023

Employment Law

This month’s review covers a range of issues. We look at sex discrimination involving a lack of a private toilet for a female employee, how an employee who worked term time should have had her holiday pay calculated to take account of the national minimum wage, a potential revision of couriers’ holiday pay following the Pimlico Plumbers case, how not to deal with a flexible working request, and an appeal to reconsider a dismissal related to the pandemic.

  • Sex Discrimination: Risk of seeing man at urinal was direct sex discrimination
  • Pay: Contractual terms of salaried term-time worker entitled her to NMW for 52 weeks of the year
  • Holiday Pay Claims: Tribunal decision remitted following Court of Appeal decision in Pimlico Plumbers
  • Indirect Discrimination: Rejection of flexible working request is application of PCP
  • COVID-19: Sales rep wins bid to dispute firing over COVID-19 home working

Sex Discrimination: Risk of seeing man at urinal was direct sex discrimination

In Earl Shilton Town Council v Miller [2023] EAT 5, the EAT has rejected Earl Shilton Town Council’s case that it did not treat ex-clerk Karen Miller worse than men in its shared toilet arrangement. The council launched its appeal after the employment tribunal ruled in 2020 it failed to provide appropriate toilet facilities to ex-clerk Karen Miller for almost two years between 2016 and 2018. The tribunal concluded that Ms Miller had been treated less favourably because she ran the risk of seeing men using the urinal. The council argued in its appeal that Ms Miller was not treated less favourably than men because they were just as much at risk of being seen at the urinal as she was of seeing them. The Judge Tayler rejected its case, concluding that Ms Miller’s sex discrimination claim did not fall apart just because a man could also make a similar complaint. It was enough to establish that Ms Miller had a worse experience than a man would seeing another man at the urinal, he said.

‘Taken from her perspective the claimant was treated less favourably than men in that she, a woman, was at risk of seeing a man using the urinals’, Judge Tayler said. ‘While a man might see another man use the urinals, the treatment of the claimant, as a woman, was less favourably.’

The judgment details how the council, which was based in a Methodist Church that it shared with a playschool, only had access to a female toilet that was in the school’s half of the building. Female staff would have to check with playschool workers that no children were using the toilet first because of child safety concerns, according to the judgment. The toilets were not always immediately accessible as a result. The council offered her the use of the men’s toilet, which has a single cubicle and a multi-person urinal. But there was no lock on the external door, creating the risk that a woman might walk in on a man using the urinal or leave the cubicle to find a man using it. The council also contended in its appeal that the sharing arrangements could not be discriminatory because they were caused by child safety concerns.

Judge Taylor ruled that the arrangements were not good enough, citing the lack of a sanitary bin and suggesting that installing a lock on the toilet door may have made it compliant.

‘The facilities were inadequate for the claimant because she is a woman’, he said. ‘Accordingly, the safeguarding issue could only go to motive and could not prevent direct discrimination being established.’

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Pay: Contractual terms of salaried term-time worker entitled her to NMW for 52 weeks of the year

In Lloyd v Elmhurst School Limited [2002] EAT 169, the claimant was employed by the respondent, a private school, as a teaching assistant. She initially worked two days a week and then this was increased to three days a week (21 hours per week). She was paid monthly in equal instalments. The claimant’s contract did not set out hours of work. However, it stated that during term time she would work as directed by the Head Teacher and be entitled to the usual school holidays as holidays with pay. The respondent calculated the claimant’s salary based on 40 weeks of the year. The claimant brought a claim in the employment tribunal for unlawful deduction from wages based on an underpayment of the National Minimum Wage (NMW). She argued that her hours over the year should be calculated as 52 weeks x 21 hours, and not 40 weeks x 21 hours. If her method of calculation was accepted as correct there was an underpayment of the NMW.

A salaried worker is entitled to receive the NMW for their ‘basic hours’ which, by virtue of regulations 3, 21(3), 22(5) of the NMW Regulations 2015 (NMWR 2015), are determined by the terms of their contract of employment, even if those basic hours are greater than the hours actually worked. On the facts of this case, even though the claimant only worked term-time as a teaching assistant, she was entitled to the NMW for 52 weeks of the year rather than just her working weeks plus statutory holiday, because her contract provided that ‘… she was entitled to the usual school holidays as holiday with pay’, according to the EAT.

The employment tribunal dismissed the claimant’s claim. It found that the claimant worked term-time only; when the claimant accepted her job it was on her and the school’s understanding that she would work term time only; the contract did not explicitly set this out but this was consistent with clause 3(b) of the contract; the wording of clause 4 of the contract did not mean that these hours were deemed to be working hours for the purposes of the NMW legislation; the wording ‘the usual school holidays as holidays with pay’ did not mean that the 12 weeks of school holiday should be paid at the same rate as when the claimant was working/on statutory leave and included in her basic hours worked calculation for NMW purposes.

The claimant appealed to the EAT. In relation to the construction of ‘basic hours’ in NMWR 2015, it was not in dispute that the claimant was a permanent employee, who was employed throughout the school year and who was engaged in ‘salaried hours work’ for the purpose of NMWR 2015, nor that the claimant met the four conditions in regulation 21, including the second condition in regulation 21(3) that she was entitled to be paid in respect of a number of hours in a year and that those hours necessarily could be ascertained from her contract.

The principal point of dispute on statutory interpretation was which non-working hours of absence or holiday count towards basic hours. The claimant argued that, while it depends on the individual contract, basic hours include all the hours which are paid as contractual holiday. While the respondent argued that the only periods of absence which count towards basic hours are those which are absences from days when the worker would otherwise be working.

The EAT allowed the appeal. It agreed with the claimant on the issue of statutory interpretation and held that the code, Act and regulations were a poor guide to what hours are to be treated as basic hours, and the ascertainment of the claimant’s ‘basic hours’ depended on the meaning of her contract: the statutory question was not answered by looking at the hours which she in fact worked. Her annual basic hours, as ascertained from her contract, would then fall to be divided by 12 to give the hours of salaried work for each one-month pay reference period. It held that as a matter of general principle, some periods of fully paid absence count towards the ‘basic hours’ of salaried hours work, e.g. if the worker’s contract said they were entitled to a salary of £400 a week for a 40-hour week and to seven weeks’ holiday at full pay their annual basic hours would be based on a multiplier of 52 weeks.

In relation to the individual grounds of appeal, the EAT held that the tribunal erred in examining the hours the claimant in fact worked, to which it added her statutory entitlement to paid annual leave; failing to ascertain the number of hours in the year for which the claimant was entitled to salary in accordance with her contract, as to which the meaning of clause 4 of her contract was of central importance; examining whether the claimant was engaged in ‘working activity’ outside term-time, rather than asking whether those periods of contractual holiday could form part of her basic hours; inconsistently including statutory leave but excluding contractual leave; and relying regulation 27 (whether a worker is ‘available at or near a place of work’ for the purpose of doing work) and not to regulation 21(3), and, in doing, so wrongly focused on when the claimant was in fact engaged in working or working activity.

The EAT remitted the matter to a freshly constituted employment tribunal for the determination, in light of its judgment, of all the issues relevant to the claimant’s claim of unlawful deduction from wages.

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Holiday Pay Claims: Tribunal decision remitted following Court of Appeal decision in Pimlico Plumbers

In Alston and 44 Ors v The Doctors Laboratory Ltd and Ors [2023] EAT 13 a group of couriers have successfully applied to the EAT to set aside by consent an employment tribunal decision on an application of time limits in holiday pay claims under the Working Time Regulations 1998 (WTR 1998) which had ruled that they could carry over paid holidays between years only if they had not already taken unpaid leave, after arguing that a Court of Appeal decision voided the employment tribunal judgment on this point.

Forty-five claimants, 38 of them represented by trade union Independent Workers of Great Britain (IWGB), argued before the EAT that the Court of Appeal’s decision in Smith v Pimlico Plumbers Ltd in February 2022 removed restrictions on how much paid leave they are due. The Honourable Mrs Justice Eady, current President of the EAT, agreed, saying that an employment tribunal’s 2020 decision in the couriers’ case ‘cannot stand and must be set aside’. The couriers ‘were and remain entitled to carry over any untaken paid annual leave’ until their contracts end or the employer, The Doctors Laboratory Ltd, allows them to take the paid holidays they have accrued, Mrs Justice Eady ruled.

It is one of the first cases to rely on the Pimlico Plumbers precedent, which allows people who were wrongly denied paid holiday to claim up to 5.6 weeks’ worth of pay—the equivalent of statutory annual leave—for each year of their employment. For people who have been misclassified as self-employed rather than workers, the precedent removed a previous two-year limit to compensation claims—now, they can stretch back as far as 1996.

The Doctors Laboratory, the UK’s largest independent clinical lab, did not give its couriers paid holiday until 2018, when it conceded they were entitled to up to four weeks a year as ‘limb (b) workers’, a legal category of worker under section 230(3) of the Employment Rights Act 1996.

The company argued before the employment tribunal in 2020 that unpaid leave the couriers had taken before 2018 should be subtracted from their holiday entitlement going forward.

The tribunal agreed the couriers’ right to carry over leave year-on-year ‘exists subject to qualification’.

Employment Judge Elliott ruled that unpaid leave was ‘capable of amounting to annual leave’ because it fulfils the health and safety objective of the European Working Time Directive, which is the root of UK working time law. But the couriers’ counsel argued before the EAT that Pimlico Plumbers allows workers to accumulate paid holiday if they have taken unpaid leave for reasons beyond their control.

The couriers and The Doctors Laboratory remain at odds over whether the couriers count as workers. If so, they could be entitled to the full 5.6 weeks’ statutory annual leave. Judge Eady remitted the matter to the employment tribunal for further directions.

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Indirect Discrimination: Rejection of flexible working request is application of PCP

In Glover v (1) Lacoste UK Ltd (2) Harmon [2023] EAT 4 the EAT dealt with the question of when a provision, criterion or practice (PCP) can be said to have been ‘applied’ to an employee, for the purposes of a claim of indirect discrimination under section 19 of Equality Act 2010. The EAT held that once an application for flexible working (eg to work on a limited number of days only each week) is determined, following an appeal process, the PCP (eg to be fully flexible as to working days) has been applied, and may therefore have put the applicant at a disadvantage, for the purposes of an indirect discrimination claim. That is the case even if the applicant is away from work when the request is made and never returns to work. It remains the case even if the employer subsequently agrees to the terms of the original application.

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COVID-19: Sales rep wins bid to dispute firing over COVID-19 home working

The EAT has agreed to hear arguments from a salesman fired after asking to work from home or be granted a leave of absence during the COVID-19 lockdown, that the employment tribunal failed to consider his belief that these were reasonable steps to avoid infection. The EAT granted Francesco Accattatis permission to challenge a decision in favour of his former employer Fortuna Group, which sells protective medical equipment like face masks and gloves. The company said Accattatis had failed to ‘support and fully comply with company policies’, which included working from its office in Enfield, North London, when it fired him in April 2020, approximately a month into the first national coronavirus lockdown. But Accattatis argued a 2021 employment tribunal ruling only considered the company’s belief that it was not possible for him to work from home or be placed on furlough. ‘To focus exclusively on the respondent’s view of the situation was an error’, his counsel, told the EAT. ‘I don’t see that the respondent’s view of whether something is feasible, or whether it was feasible, was a relevant matter’.

Under the Employment Rights Act 1996 (ERA 1996), it is unlawful to fire an employee for refusing to return to a workplace because they believed there was a ‘serious and imminent danger’ they couldn’t reasonably avoid. Whether the steps the employee took were appropriate to avoid that danger must be judged ‘by reference to all the circumstances, including, in particular, his knowledge and the facilities and advice available to him at the time’.

The employment tribunal ruled Accattatis’ requests were not appropriate steps because the company ‘reasonably and justifiably concluded’ that he could not work from home or claim furlough.

But Judge James Tayler agreed at a hearing on 9 February 2023 that it is arguable the tribunal misinterpreted the law and allowed the appeal to proceed. Accattatis will also be able to argue that the reason Fortuna gave for his dismissal was not properly distinguished from managers’ low opinion of him.

He had asked his bosses several times about working from home, which he felt was possible. Fortuna and the tribunal disagreed that Accattatis was needed in the office to manage deliveries of equipment and use specialist software, the 2021 judgment noted. He sent several emails throughout April 2020 while on sick leave for a suspected case of Covid-19 urging managers to place him on furlough. ‘I can assure you I already received confirmation from several sources that [the] coronavirus job retention scheme is easily accessible, by any company still actively trading during this time of emergency, without any downside to it’, one email reads. His counsel said this demonstrated Accattatis’ belief that furlough was possible and that urging Fortuna to reconsider was an appropriate step. ‘It’s the manner of the demands, that they were impertinent, that was the reason for the dismissal’, he said.

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Further Information:

If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: hello@dixcartuk.com

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The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.

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