Private Members’ Bills receive Royal Assent
Three Private Members’ Bills, backed by the government, received Royal Assent on 24 May 2023:
- Neonatal Care (Leave and Pay) Act 2023
- Protection from Redundancy (Pregnancy and Family Leave) Act 2023
- Carer’s Leave Act 2023
All three give additional leave entitlements (paid and unpaid) to affected employees. Although secondary legislation is needed to implement the legislation, employers will need to update their relevant policies as a priority. We will be issuing new policies for YEAR clients as part of their retainer.
Ethnicity pay gap reporting
The government has published guidance regarding ethnicity pay gap reporting following its decision not to make it mandatory. In 2020, the ONS published figures that indicated that pay rates differed between employees of different ethnic groups, namely employees of Pakistani origin earning less per hour than a comparable white British group. In comparison, employees of Chinese origin earned more. The statistics also showed a pay gap disparity between older and younger ethnic workers, with the pay gap being larger for those aged 30 years and over, than for those aged 16 to 29 years old, and also between men and women.
The guidance will help employers understand what data they need to collect, how to calculate and understand any pay disparities, and how to address those disparities. This is not mandatory but many employers may benefit from undertaking this exercise, not least given the importance of an organisation’s approach to EDI and ESG and the impact on its reputation.
The government has launched a review of the current whistleblowing framework to investigate if it provides sufficient protection for whistleblowers. The principal lines of enquiry include:
- Who is covered by whistleblowing protections. For instance, the current legislation does not specifically refer to those without an employment status, such as company directors.
- How prescribed bodies are to respond to disclosures, including guidance on best practice.
- The guidance available.
Moves to strengthen protection for whistleblowers have been introduced via Private Members’ Bills but neither have received government support pending the outcome of the review.
Economic Crime and Transparency Bill
If passed, this will create a new corporate criminal offence of failure to prevent fraud, with an unlimited fine for those organisations found guilty. Organisations will be liable for employees, or agents, who commit a specific fraud or are guilty of false accounting, designed to benefit the company, or another entity to whom that individual provides services on their employer’s behalf. The law will apply to large corporates and partnerships (defined as having two of three characteristics: >250 employees, >£36m annual t/o, or >£18m total balance sheet assets). Organisations must show they had reasonable fraud prevention procedures (still to be defined) in place in order to mount a reasonable defence.
Was an employee’s pregnancy motivation for her dismissal?
Alcedo Orange v Mrs Ferridge-Gunn
This case demonstrates the importance of not jumping to what seems to be a cut and dried conclusion. Shortly after starting a new job, Mrs Ferridge-Gunn discovered she was pregnant. Eight days after having told her line manager she was pregnant, and following two days of pregnancy-related sickness absence, she was dismissed. Mrs Ferridge-Gunn arrived at the logical conclusion that her dismissal was directly related to her pregnancy – not least as her line manager had made unsympathetic remarks about her suffering from morning sickness, and subsequently brought a claim for discrimination. In response, her employer contended that it was her poor performance, failure to meet her targets, and poor attitude to training that led to her dismissal and that her pregnancy was not a factor in the decision. Mrs Ferridge-Gunn lost her claim for automatic unfair dismissal but the tribunal found that that her employer had failed to prove that the decision to dismiss was not related to her pregnancy and upheld the claim of pregnancy discrimination.
Alcedo appealed. The EAT reviewed the decision-making process behind Mrs Ferridge-Gunn’s dismissal and found that it was not clear who the decision-maker was – her line manager who had made her feelings about the pregnancy clear, the owner of the business, or both of them jointly. It was down to Mrs Ferridge-Gunn to prove that her line manager was motivated by the fact she was pregnant to push for her dismissal. The EAT has remitted the claim back to the tribunal to consider who was the decision-maker and whether her pregnancy motivated their decision.
The EAT directed the tribunal to consider the principles set out in Reynolds v CLFIS (UK) in which it was held that “the correct approach … is to treat the conduct of the person supplying the information as a separate act from that of the person who acts on it.” Any decision that leads to a dismissal must be transparent and properly documented, not only as a matter of good practice but also in the event of a discrimination claim.
Calculating pay for accrued but untaken statutory holiday on termination of employment
Mr S Connor v Chief Constable of the South Yorkshire Police
This case confirms that care should be taken when calculating accrued but unused holiday upon the termination of employment. Mr Connor was employed by the Chief Constable of the South Yorkshire Police for some 17 years and was, prior to the termination of his employment, paid an annual salary in monthly instalments. Mr Connor had been absent from work for a period of over 12 months leading up to the termination of his employment and had exhausted his sick pay entitlement.
When calculating the payment due to Mr Connor for accrued but unused annual leave, his employer relied upon the following clause in his contract of employment. “Employees may, on termination of employment, be entitled to payment for untaken annual leave or for other accrued time off. […] Payment will be based on 1/365th of annual salary for each day’s leave.” For the duration of Mr Connor’s employment, he had received the equivalent sum for weeks of annual leave and working weeks and so, when his employer used the above formula to calculate the pay due, the resulting sum was less than Mr Connor would have received, had he used his annual leave entitlement.
The EAT held that, when undertaking calculations for payment for accrued but unused statutory annual leave, workers must not be paid less than the usual amount they would have received for working. No relevant agreement (including the contract of employment) could override this obligation. Instead, the EAT held that the formula set out at 14(3) of the Working Time Regulations 1998 should be used to undertake the calculations.