In this month’s instalment, our team summarises the latest UK case law and developments in employment law – and their implications for employers.
1. The government has proposed amending the Employment Rights Bill, partly to remedy technical points or inconsistencies before the Bill becomes law. The updates would:
- Double the time limit from three to six months for bringing all Employment Tribunal claims.
- Revise the definition of “initial period of employment” to reflect unfair dismissal becoming a day one right. During that period – from three to nine months –a less onerous dismissal procedure is anticipated.
- Change the rules on payments when shifts are cancelled, moved or curtailed at short notice. The Employment Tribunal would have discretion to decide whether to award compensation and the amount.
- Include menstrual problems and disorders in the definition of “matters related to gender equality.” Larger employers may be required to develop equality action plans for those matters.
- Clarify that the right of trade unions to access workplaces will not extend to workplaces that are also dwellings.
2. In Haycocks v. ADP RPO UK Ltd [2024] EWCA Civ 1291, the Court of Appeal confirmed that general workforce consultation is not required for an individual redundancy dismissal to be considered fair. This overturns the Employment Appeal Tribunal’s decision and reinstates the original decision of the Employment Tribunal. The Court of Appeal finding also clarified an employer's obligations concerning consultation in smaller-scale redundancies.
Facts
- The claimant worked for the respondent as a recruitment consultant. The claimant was part of a 16-person team recruiting for an investment bank. The bank’s need for recruitment services materially fell as a result of the COVID-19 pandemic.
- To reduce its workforce, the respondent followed a selection process using a matrix of subjective criteria provided by its U.S. parent company. The scoring took place before the company had determined the number of employees to make redundant. Employees were not involved in the process when the scoring was undertaken. Employees were not given their scores.
- The claimant scored lowest of the 16 employees at risk of redundancy and was made redundant. The claimant’s score was shared only prior to an internal appeal of the redundancy.
Decision
The Employment Appeal Tribunal:
- Determined that a small-scale redundancy dismissal (involving two job losses) was unfair because the employer failed to conduct meaningful “workforce consultation” during the early stages of the process.
- That left no opportunity to discuss the prospects of a different approach.
- Individual consultations occurred only after it was too late for an employee to affect the employer's decisions.
- Deemed the consultation process insufficient without an explanation for the omission of general workforce-level consultation.
- Importantly, this omission could not be remedied by the individual redundancy consultation or the appeal process.
- As a result, the Employment Appeal Tribunal determined the dismissal was unfair.
The Court of Appeal:
- Overturned the Employment Appeal Tribunal’s decision.
- Disagreed that general workforce consultation is required for good industrial relations practice or the standard procedure in smaller-scale redundancies in non-unionised workplaces. A failure to provide employees that opportunity will not necessarily render a subsequent dismissal unfair.
- Recognised that group meetings may be an effective way to gather employees' views on proposed redundancies. Their appropriateness, however, depends on the circumstances. Employers should assess the adequacy of consultation on a case-by-case basis.
- Ruled with regard to timing that the consultation does not necessarily need to occur at an early stage of the redundancy or restructuring proposal. Rather, it should happen at a formative stage when the employer still has an open mind. Again, employers should assess this on a case-by-case basis.
Key Takeaways
- General workforce-level consultation is not a legal requirement in small-scale redundancy exercises, although on occasion it may be useful.
- It remains good practice to let employees express their views in individual consultations on any issue that may affect the risk or consequences of their dismissal.
- Consultation must take place at a stage when the employee may still realistically influence the decision and outcome.
3. In Gallagher v. McKinnon's Auto and Tyres Limited [2024] EAT 174, the Employment Appeal Tribunal found that an employer had not behaved improperly during a "protected conversation" with an employee who brought an unfair dismissal claim after being made redundant. The employee sought to introduce evidence of pre-termination negotiations as part of the claim.
Facts
The claimant asserted three key improprieties:
- The meeting was set up under false pretences. It was described as a “return to work” discussion after the employee’s sick leave. In the meeting, however, the employer proposed severance terms.
- The claimant was given only 48 hours to consider a £10,000 redundancy offer. Acas guidance suggests a minimum of 10 calendar days.
- The employer exerted undue pressure by stating the employee’s role was redundant and implying dismissal was inevitable if the employee rejected the offer.
Decision
The Employment Tribunal:
- Viewed the discussion as a pre-termination negotiation under section 111A of the ERA 1996 that was therefore inadmissible.
- Found that the exception for improper behaviour did not apply. As a result, the discussions were inadmissible.
The Employment Appeal Tribunal:
- Upheld the Employment Tribunal’s decision.
- Found that the following actions did not put the claimant under undue pressure:
- Informing the claimant that a redundancy process would commence if the claimant did not accept the offer. The Employment Appeal Tribunal determined that this was different than stating the claimant would be dismissed if the claimant declined since redundant employees are not always dismissed.
- Inviting the claimant to discuss returning to work after sickness, only to present a settlement proposal, did not constitute dishonesty about the meeting's purpose. The judge took other factors into account, such as how the meeting was conducted, when assessing the level of pressure on the claimant. While it may not have been fair to use the meeting to introduce settlement terms, fairness is distinct from impropriety.
- Setting a 48-hour deadline for acceptance deviated from the Acas Code, which suggests a 10-day period for considering a written offer. However, as the offer to the claimant was verbal, a written offer would have followed acceptance.
Key Takeaways:
- The Employment Appeal Tribunal’s judgment reinforces the high standard required to overturn decisions on procedural grounds. Determining improper behaviour is assessed on a case-by-case basis.
- While transparency about the purpose of a meeting is encouraged, it may reasonably change based on the situation.
- Allegations of undue pressure must be supported by strong evidence, particularly in redundancy discussions.
- Acas guidance on settlement agreements carries significant weight but is not legally binding. Employers are not required to follow Acas recommendations and may deviate from them without necessarily acting improperly.
4. In Deksne v. Ambitions Ltd [2024] EAT 171, the Employment Appeal Tribunal found that two years’ worth of holiday underpayments amounted to a series of unlawful deductions from wages. (The Employment Tribunal’s determination occurred before the Supreme Court’s decision in Agnew.)
Facts
- The claimant asserted her holiday pay had been incorrectly calculated. She brought a claim for unlawful deduction from wages.
Decision
The Employment Appeal Tribunal:
- Found that assessing whether wage deductions form a series hinge on factors such as the similarities and differences between the deductions, their frequency, amount, impact, how they were made and applied and what connected them.
- Concluded that the Employment Tribunal erred by focusing on occasional intervals between payments that exceeded three months.
- Determined the underpayments were unlawful deductions from wages.
- Ordered the employer to pay two years’ worth of underpayments to the claimant.
Key Takeaways
- Each underpayment was factually linked to its predecessor by the same underlying cause (the incorrect calculation of holiday pay).
- The respondent was unable to rely on gaps longer than three months to stop a “series” of deductions from being formed – this is likely to increase potential liability for employers who continue to calculate holiday incorrectly.
Reminder – duty to protect against sexual harassment in the festive season: As the festive season approaches, we are conscious that this is historically a time that has led to incidents of workplace sexual harassment being reported in light of social workplace gatherings. When hosting a workplace event employers should:
- Ensure new or temporary staff have received appropriate conduct and anti-harassment training.
- Remind staff before a social event of the standards of behaviour the business and law expect.
- Circulate an updated anti-harassment policy.
- Consider cautioning against excessive alcohol consumption.
- See our sexual harassment checklist for detailed guidance.