Last month saw a significant number of employment law changes come into force on 6 April. The pace of change has since continued unabated and so this month’s update covers the latest developments in case law, changes affecting the hospitality sector and the latest news on reforms to “fire and rehire” which will affect every employer’s ability to change their employees’ terms and conditions.
News 📰
Fire and rehire
The Government has already published its statutory code of practice on dismissal and re-engagement (or “fire and rehire”), which is due to come into force in July 2024. From then, employers will be expected to follow the code where they are considering dismissing employees and then re-engaging in order to impose new contractual terms. This month, draft legislation has been published that will give Employment Tribunals the power to increase compensation by 25% in claims where the code of practice has not been followed.
This is unlikely to be the last word on fire and re-hire, as the Labour Party has pledged to abolish the practice altogether. If Labour forms the government after the next election (due by January 2025 at the latest), employers may be left with few options if they wish to change their employees’ contractual terms without the employees’ agreement.
Pregnancy and family leave
The Equality and Human Rights Commission (EHRC) has updated its guidance for employees relating to pregnant employees and other family related leave. The changes mainly reflect last month’s legislative reforms, including the extension of protection from redundancy for those returning from maternity, adoption or shared parental leave, the right to request flexible working from day one of employment, and the increased flexibility in how paternity leave can be taken. Employers should ensure that their policies are updated in line with these changes and follow the examples of good practice taken from the EHRC guidance.
The updated guidance can be found here.
Tips Act
The Government has confirmed that the Employment (Allocation of Tips) Act 2023, or ‘Tips Act’ for short, will come into force on 1 October 2024. The Act places a duty on employers to ensure that any tips, including service charges, are fairly allocated to their employees. Where employees can be expected to regularly receive tips, employers will also need to have a written policy setting out how tips are dealt with and to keep records of how tips have been allocated.
Employers across the hospitality sector should be preparing for the changes. One restaurant chain in London is testing a new policy under which customers will no longer be able to add tips onto their card payments, and the optional ‘service charge’ on bills will go directly to the employer. The employees will receive a 19% increase to their wages to compensate for the loss of tips.
Case Law Update 📢
Atif v Dolce and Gabbana UK Ltd
the Employment Appeal Tribunal (EAT) has upheld a decision that it was not discriminatory and not unfair to dismiss an employee for abusing their entitlement to paid sick leave. The employee had queried on several occasions how many paid sick days she had left, had taken 7 days sick leave each year for several years, which was the number of sick days she would be paid, and when a request for holiday was refused, she stated to a colleague that she intended to take the day off as sick leave instead. The employer ultimately dismissed her for these reasons. The dismissal was held to be fair.
The employee had claimed she had been discriminated against on the basis of her nationality, arguing (amongst other things) that the employer’s entire management team was Italian (the employee was not), and that her Italian manager also had a suspicious pattern of taking sickness absence that was never dealt with. The Tribunal found these facts to be proven, but the discrimination claim still failed as the Tribunal found that the employee’s nationality was nothing to do with the way she was treated.
In discrimination cases, the Claimant doesn’t need to prove discrimination occurred – they only need to prove facts from which it might be inferred that discrimination occurred. If they do this, the burden of proof then ‘shifts’ to the employer to prove that discrimination did not take place. Despite agreeing that discrimination had not occurred in this case, the EAT said that the facts proven by the employee were enough to shift the burden of proof onto the employer. The case should act as a reminder for employers to treat similar disciplinary issues in a similar way, otherwise they could face allegations of discrimination.
Matthews v CGI IT UK Ltd
The EAT agreed that it was fair to dismiss an employee due to the total breakdown in the working relationship, despite there being no prior warnings or right of appeal given. However, such cases are likely to be rare.
In this case, the decline in the working relationship took place over a period of a year or so. In that time, the employee had threatened to raise multiple grievances, threatened to take his employer to court, refused to agree changes to his role and accused various colleagues of incompetence. His conduct over this time was extremely confrontational and led his employer to conclude they had no option but to dismiss him.
The Tribunal found that it was reasonable for the employer to conclude that the relationship between them and their employee had irretrievably broken down, and that the dismissal was fair despite no prior warnings or right of appeal given. The EAT agreed but made clear that the case was a rare and unusual one. Each case will be different and employers finding themselves in a situation where their relationship with an employee may have broken down should take advice on the appropriate way forward.
Nicol v World Travel and Tourism Council and Others
The employee in this case claimed that he had been subjected to detriments and unfairly dismissed as a result of making ‘protected disclosures’, i.e. whistleblowing. The Tribunal found that the employee had made a protected disclosure to one of the employer’s HR consultants, Ms Roberts. Ms Roberts told the employer’s CEO that the employee had made a complaint but didn’t give the CEO any detail about the content. The claims against the CEO then failed on the basis that the ‘protected disclosure’ had not been made to the CEO, and they had not been aware of the substance of the complaint.
The EAT upheld this decision and found that, in order for the whistleblowing protections to apply, the employer needs to know the detail of the whistleblowing disclosure, not just the fact that a disclosure has been made. This decision can provide some comfort to employers or individuals faced with a whistleblowing claim where they had no knowledge of the protected disclosure, although in practice such claims are likely to be rare.
Thank you to our contributors: Phil Cookson, Desley Sherwin, Laura Hill and George Miller.