Employment in the news | September 2023

Hogan Lovells

Hogan Lovells

Parliament returned from its summer recess in September, allowing proposals on preventing sexual harassment to progress and the right to request a more predictable contract to become law. Angela Rayner’s speech to the TUC Congress confirmed that Labour would introduce an Employment Rights Bill within 100 days of taking office, should Labour win the next general election. The Court of Session decided that rights under a share scheme transferred under TUPE.


Sexual harassment

The Worker Protection (Amendment of Equality Act 2010) Bill is a step closer to becoming law after a political compromise in the House of Lords. In its original form, the Bill introduced a duty on employers to take all reasonable steps to prevent sexual harassment in the workplace and reinstated liability for third party harassment related to a protected characteristic.

There was opposition to the third party harassment proposals. Some peers were concerned that employers would curtail free speech to avoid potential liability and that a duty to take all reasonable steps to prevent sexual harassment imposed too high a threshold. As a result, the third party harassment provisions have been dropped and the amended Bill requires employers to take “reasonable steps” to prevent sexual harassment, not “all reasonable steps”.

The House of Commons will consider the amended Bill in late October.

Action points

  • The EHRC will produce a Code of Practice on the duty to prevent sexual harassment, which will be based on the technical guidance it issued in January 2020.
  • Once the Code is published, employers should review their existing approach to and policies for dealing with sexual harassment, to ensure that they are able to comply with the new duty.

Right to request a more predictable contract

The Workers (Predictable Terms and Conditions) Act received Royal Assent on 18 September 2023. The Act will give workers who do not have regular hours or days of work, and workers on fixed term contracts of 12 months or less, the right to request a more predictable work pattern. Employers will have to deal with a request in a reasonable manner within a month of the request and can only reject a request for a permitted reason. The permitted reasons reflect the existing grounds on which an employer can refuse a flexible working request.

Regulations will bring the Act into force and set out how the new right will operate in more detail. The government expects the right to take effect in approximately a year’s time.

Action points

  • ACAS will publish a Code of Practice providing guidance on making and responding to requests for a more predictable working pattern. A draft will be available for consultation in the coming weeks.
  • Once the draft Code is published, employers should begin drafting policies outlining how they will deal with such requests. Managers will need to be informed of the new right and trained on how to handle requests.

Priorities for a potential Labour government

During Angela Rayner’s speech to the TUC Congress, she confirmed that if the Labour party is elected to government at the next general election, it would introduce an Employment Rights Bill within 100 days. The Bill would repeal the Strikes (Minimum Service Levels) Act passed earlier this year, as well as the Trade Union Act 2016, which introduced minimum turnout requirements for votes on industrial action.

Labour would also introduce updated regulations on blacklisting and give trade unions a reasonable right to access workplaces for the purposes of union business, including recruiting members. It would simplify the current process for obtaining statutory trade union recognition, although the speech does not contain details of what those changes would be, and there would be measures to support collective bargaining.

The speech also promised more extensive individual worker rights, including a ban on zero hours contracts, an end to the practice of “fire and rehire”, improvements to sick pay entitlements and increases to the living wage.

Action points

  • Labour will publish more detail about its plans for employment law reform before the Party Conference in early October.
  • Employers will want to pay particular attention to Labour’s plans to reform employment status and for the possible abolition of or reduction in the qualifying period for unfair dismissal rights.

TUPE and share schemes

In Ponticelli Ltd v Gallagher, the Court of Session in Scotland decided that a share incentive plan transferred under TUPE. Even though the employee’s right to participate was not contained in his contract of employment, but in a separate collateral contract, it arose “in connection with” his employment contract and was subject to TUPE. The transferee employer had to provide a scheme of substantial equivalence.

Although the decision was reached by the Court of Session in Scotland, the relevant provisions in TUPE apply across Great Britain. Faced with the same issue, the EAT in England and Wales would almost certainly follow the Court of Session decision. For further information, read our more detailed article here.

Action points

The case highlights the importance of proper due diligence in any transaction to identify which rights and liabilities transfer under TUPE, including any that are not contained in employment contracts. A transferee employer will then have to review the terms of relevant schemes to decide whether it must provide them post-transfer and if so in what form.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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