Summer round-up of key employment law developments

Supreme Court confirms holiday for part-year workers should not be pro-rated

Summary

In the case of Harpur Trust v Brazel, the Supreme Court has ruled that paid holiday entitlement for workers who only work part of the year should not be pro-rated.  A part-year worker on a permanent contract is entitled to the full 5.6 weeks' holiday entitlement. For those with irregular hours the pay should be based on the average pay over a 52 week reference period, disregarding any weeks not worked. The judgment ruled that the 12.07% method that many employers have been using to calculate such holiday pay is not correct. 

This case impacts permanent part-year workers and not part-time workers who work throughout the year.

What does this mean for employers?

• Employers engaging workers on part-year permanent contracts or zero hours permanent contracts should review their contractual arrangements and holiday pay practices.
• Employers may wish to move away from permanent contracts and use a series of shorter contracts or ensure that individuals engaged on part-year permanent contracts are given some work every week (to avoid the windfall holiday pay for those who do not work each week).
• In particular, employers using the 12.07% method to calculate holiday pay for those with irregular hours should be revisiting their approach. Employers who have been using such a method should be prepared for claims of unlawful deductions from wages.
• Employers in the education sector will be most heavily hit, in addition to any other employers who use part-year workers with irregular hours.

Government publishes response to menopause consultation

Summary

In November 2021 a report was published by a "roundtable of older workers" to look at the important issue of menopause and employment. The government has now published its response to the report. Highlights from the government's response include:

• The government will not be enacting dual discrimination provisions which already sit dormant in the Equality Act 2010, and which would entitle a worker to complain of discrimination arising out of a combination of protected characteristics rather than just one. The government response stated that whilst menopause is not a protected characteristic, employees going through the menopause are provided protection by other characteristics, namely sex, age and disability.
• One or more Menopause Employment Champions will be appointed by the Minister for Employment to give a voice to menopausal women, promoting their economic contributions and working with employers to ensure that people who are experiencing menopause symptoms stay in work and continue to progress.
• The government will launch a collaborative employer-led campaign, spearheaded by the Menopause Employment Champion(s). As well as raising awareness amongst employers, the campaign will encourage the development of support within employer organisations by providing links to advice, guidance and best practice case studies.
• The government recommends large employers put in place workplace awareness, training and support via Employee Assistance Programmes (EAP).

What does this mean for employers?

The report does not require employers to make any particular changes.  However, it emphasises the importance of the menopause as a workplace issue.

Employers may wish to:

• launch menopause policies;
• provide training to line managers on how best to support employees going through the menopause; and
• raise awareness amongst their staff about the menopause through seminars and communications.

Government publishes response to employment status consultation

Summary

The long awaited response to the 2018 employment status consultation (which formed part of the Good Work Plan) has now been published with the conclusion that no legislative reforms will be introduced. The consultation sought views on the current employment status framework, focusing on its complexity, the fact that it was open to interpretation, the difficulty in resolving disputes and alignment between the frameworks for tax and employment rights. A large number of the respondents were supportive of employment status reform but there was no overall consensus on what action should be taken. 

The government's response confirms that whilst boundaries between the different statuses (eg worker, employee, self-employed etc) can be unclear for some individuals and employers "the benefits of creating a new framework for employment status are currently outweighed by the potential disruption associated with legislative reform". 

What does this mean for employers?

Employers hoping for clarity on the issue of employment status are likely to be disappointed by the government's conclusion. The government has provided some additional guidance on employment status for both individuals and employers but has emphasised that this is guidance only and does not impose any legal obligations or change the law.  In short it's "business as usual" for employers with regard to employment status.

Changes concerning trade union law

Summary

• Increase to maximum damages awards against unions for unlawful action
  Relevant legislation (the Trade Union and Labour Relations (Consolidation) Act 1992) has been amended to increase the limits on the maximum damages award which may be made against a trade union where industrial action is found to be unlawful. With effect from 21 July 2022 the limits are increased as follows:
  • Fewer than 5,000 members: £40,000 (previously £10,000).
  • 5,000 to 24,999 members: £200,000 (previously £50,000).
  • 25,000 to 99,999 members: £500,000 (previously £125,000).
  • 100,000 members or more: £1,000,000 (previously £250,000).
     
• Employers no longer restricted from engaging agency workers during strikes
  Changes to relevant regulations (the Conduct of Employment Agencies and Employment Business Regulations 2003) have been made to remove the provisions which prevented employment businesses from introducing or supplying agency workers to hirers to replace individuals who are taking part in official strike or official industrial action or to replace individuals who have themselves been transferred by the hirer to perform the duties of the person on strike or taking industrial action. In other words, agencies can now provide workers to replace striking staff, or to backfill roles left empty because the jobholder is covering for a striking colleague. Several trade unions have indicated their intention to seek a judicial review of the changes.   

What does this mean for employers?

For employers with unionised workforces, these changes will give greater flexibility in how to react to industrial action. However, employers will also need to think carefully from both an employee relations and public relations perspective before invoking these new rights.

If you have any questions in relation to the topics raised in this alert please contact Anne Pritam, Leanne Raven or your usual Stephenson Harwood contact.