Our monthly employment law update brings you the latest top picks of employment law developments that may affect your business.

Remember though, we’re always here to answer any questions you have and to help you navigate the wondrous world of employment law in managing your people!

This month we cover:

1. Rights of pregnant working and new parents in Redundancy to be extended.

2. New rights for workers with caregiving responsibilities.

3. Plans to replace GDPR legislation.

4. Ban on exclusivity clauses in contracts.

5. Recent case law with takeaways for your business:

*Dismissal for redundancy was unfair due to unfair selection.

*A non-contractual benefit did transfer under TUPE.

1. Rights of Pregnant and New Parents in Redundancy to be Extended

The government has recently backed a private members' bill that would allow it to introduce regulations giving pregnant workers and new parents more protection in redundancy situations.

As it stands today, any employee facing redundancy whilst on maternity, adoption or shared parental leave must be offered a suitable alternative role if there is one and given priority.

The new regulations will extend this protection to cover the period from when a woman first tells her employer she’s pregnant until 18 months after the birth and in addition cover mothers who suffer a miscarriage before notifying the employer they are pregnant.

It’s not yet known when these regulations are intended to come into force.

2. New Rights for Workers with Caregiving Responsibilities

Legislation to introduce the right to one week’s unpaid leave every year (taken in periods of half a day or a day) for workers with caregiving responsibilities will be backed by the Government. The right will be available from day one of employment.

Eligible employees will be able to use the leave to provide care or to arrange care for someone dependent upon them for long-term care as a result of a disability, old age, illness or injury requiring at least 3 months of care.

It doesn’t appear that there will be a requirement for the employee to provide any evidence regarding a request for the leave but there are likely to be notice requirements they’ll need to abide by.

Again, the timescale for implementation is unclear but I think it’s likely to be sometime in 2024.

3. Plans to replace GDPR legislation

The government has announced plans to create bespoke data protection legislation to replace the current GDPR legislation. Details and a timescale will be revealed in time.

4. Ban on Exclusivity Clauses

From 5th December 2022 you will no longer be allowed to include exclusivity clauses (i.e. a clause which says the employee can’t work for another employer) in the employment contracts for lower-paid workers.

These clauses are already banned in zero-hour contracts but will now also be banned in the contracts of any worker whose weekly income is at or below the Lower Earnings Limit (currently £123 a week), so check your contracts and decide whether you need these clauses at all if you have them and in any case, make sure you delete the clause where you’re offering a lower paid worker.

5. Case Law with Implications

5a. Dismissal for redundancy was unfair due to Unfair Selection.

In the case of Mogane vs Bradford Teaching Hospitals, an Employment Appeal Tribunal (EAT) has ruled that a nurse who was dismissed for redundancy on the basis that her fixed term contract was due for renewal before that of her colleagues was unfairly dismissed.

The EAT decided that using the expiry date of the fixed term contract as the selection criterion for the redundancy, and that decision being made without any prior consultation was wrong as it put Ms. Mogane into a selection pool of ‘one’ and made her redundancy a fait accompli.

Takeaways – What does this mean for employers?

This case is a good reminder that selection criteria for redundancy should be very carefully considered and that meaningful consultation, including consulting on how employees will be selected for redundancy, is vital for a redundancy process to be considered fair.

5b. A non-contractual benefit DID transfer under TUPE.

In a TUPE situation, “all rights and obligations arising under or in connection with the employment contract” transfer from the old employer to the new one.

But does this include discretionary benefits like employee share plans?

In this case, the Employment Appeal Tribunal ruled ‘yes’.

The employee in this case (Mr Gallagher) was part of a share incentive scheme with his old employer where he would obtain shares in the employer's parent company. There was nothing stated in the employment contract, but plan rules stated that it was a non-contractual benefit. The new employer said that it wasn’t going to provide a share incentive plan but it would instead pay a one-off compensation payment.

Mr Gallagher complained to an employment tribunal stating that because of the TUPE transfer he should be able to participate in an equivalent share incentive scheme with the new employer.

The Employment Appeal Tribunal agreed with him, stating that even though it was a non-contractual benefit, it was part of his total financial package and arose "in connection with" his contract of employment, meaning that the right did transfer to the new employer under TUPE.

The result was that the new employer was ordered to put in place a share incentive scheme that was ‘substantially equivalent’ to the old scheme.

Takeaways – What does this mean for employers?

This case shows that even discretionary benefits which are not contractual such as share schemes can transfer under TUPE, as they could be considered as arising "in connection with" the employment contract.

For share schemes, this can create mayhem for new employers who might not be able to implement an identical scheme. However, where this is the case, the new employer must put in place a scheme which is "substantially equivalent" to the old scheme.

However, there may be an ‘out’ in these cases. For example if the share plan rules state that the employer has the right to amend or withdraw the scheme then as the scheme would transfer to the new employer on its existing terms, then the same right to amend or withdraw the scheme would arguably apply to the new employer too.

Disclaimer

The intention of this update is to give general information only and isn’t intended to be an exhaustive statement of the law. Although we’ve taken care over the information, you should not rely on it as legal advice. We do not accept any liability to anyone who does rely on its content.