Welcome to the next edition of Employment Law Matters, our quarterly update on key issues in employment law. Every three months, we will send you a selection of the most important developments for employers in case law and legislation, including practical takeaways for employers as well as things to look forward to in the coming months.
CM Murray LLP are leading specialist employment law advisers to multi-national companies and senior executives. If you have any topics you would like us to cover in our regular updates, please do get in touch.
Flexible Bank Holiday Policies
The recent King’s Coronation meant that many UK employers afforded their workforce a third long weekend in May, allowing them to enjoy the three-day break occasioned by the additional holiday.
Whilst many employees benefitted from this additional bank holiday, not all were necessarily legally entitled to it.
There is no statutory right for employees to take bank holidays off work, and any employee entitlement must be ascertained from the wording of their employment contract:
- If the employment contract stated that the employee is entitled to a certain amount of leave days plus all public/bank holidays, this is a contractual right, and the employee is automatically entitled to this extra bank holiday
- If the employment contract stated that the employee is entitled to a certain amount of leave days including all public/bank holidays, this is a contractual right; however, this bank holiday will be taken from the allotted overall total of leave days
- If the employment contract stated that the employee is entitled to a certain amount of leave days plus or including eight public/bank holidays, there is no contractual right. Many employment contracts may also refer to the “usual bank holidays” or even specify what those usual bank holidays are. The employee has no automatic right to the additional bank holiday in this case, irrespective of the fact that most employers elected to grant this to their staff
Once employers were clear as to where they stood with respect to their legal obligations under the employment contract, many had regard to how they had treated the additional bank holiday which was awarded for the Queen’s Platinum Jubilee last year. Although it would be premature to consider a ‘custom and practice’ argument at this time, an entitlement to receive bank holiday as a day’s leave may be established over time if it could be shown that the employer had a long-standing custom of acting in this way, and the employee knew about and expected to receive this entitlement.
In a month with three bank holidays, it is unsurprising that the issue is currently topical for employers. A recent poll by Ovo Energy showed that almost three quarters of workers would prefer flexibility about whether they took bank holidays off, considering that this would allow them to better attend family, cultural and religious events. Being mindful that ‘fixed’ bank holidays do not suit everybody, employers are increasingly adopting flexible bank holiday policies. One such employer is Grant Thornton, who adopted a flexible holiday system in 2022, in order to meet their overall objective of creating a more inclusive workplace for staff, particularly those of non-Christian faith who wish to celebrate their own religious festivals. Noting that Deloitte and PwC have also recently adopted flexible bank holiday policies, this is undoubtedly an area which employers will be keeping a close eye on in order to ensure their policies are appropriate and in line with market standard.
The Worker Protection (Amendment of Equality Act 2010) Bill
The Worker Protection (Amendment of Equality Act 2010) Bill, recently had its second reading in the House of Lords with Government support, and if passed it would:
- make employers liable for third party harassment of workers, unless the employer can show it had taken reasonable steps to prevent it; and
- create a positive duty to prevent sexual harassment
However, it has been reported that ministers are planning to drop the bill because Conservative peers have raised concerns about the potential for costly legal action to be taken against employers. As a result, the government has been urged to protect vulnerable workers and not delay the opportunity to strengthen laws surrounding sexual harassment in the workplace.
The then-Government’s response to its consultation on the issue of sexual harassment in the workplace in 2019/2021, agreed that a new duty to prevent sexual harassment at work would be introduced. This has been reflected in the proposed Bill and was seen as an important and symbolic first step. Despite the rumours that the Bill will be shelved, employers should still be aware of these important changes, and if implemented, employers should be prepared and ready to comply.
Increased Vento Bands
With effect from 6 April 2023, there has been an increase to the Vento bands in line with RPI. The Vento bands set the levels of compensation that can be awarded for injury to feelings in discrimination, harassment and victimisation cases in employment tribunals in the United Kingdom.
The lower band (for less serious cases of discrimination) is now £1,100 to £11,200. The middle band (for cases that do not merit an award in the upper band) is £11,200 to £33,700 and the upper band (for the most serious cases of discrimination) is £33,700 to £56,200. In exceptional cases, tribunals are able to make awards exceeding the top of the upper band.
New employment law measures announced
In a policy paper called “Smarter Regulation to Grow the Economy”, the Government has announced a number of noteworthy proposed changes to key employment legislation.
The most significant of the proposals is to introduce legislation to limit the duration of post termination non-compete clauses to three months. It appears this will apply only to non-compete clauses and not to other restrictions – such as confidentiality and non-solicitation clauses.
In the same paper, changes are envisaged to the Working Time Regulations 1998 and the information and consultation obligations in the Transfer of Undertakings (Protection of Employment) Regulations 2006.
These changes will be introduced “when parliamentary time allows”, which could be a long way off – but if they do become law it will be a major change to the ability of employers to limit the activities of former employees.
Economic Crime and Corporate Transparency Bill
New legislation currently working its way through Parliament is likely to create criminal liability for corporate entities that fail to prevent fraud, false accounting or money laundering. If passed, the legislation is likely to come into force in late 2024 and will make it easier for organisations to be prosecuted for fraud committed by employees or third parties from which the organisation benefits. There will be a defence of having taken reasonable steps to prevent fraud, so robust policies and regular training will be key to minimising the risk of liability.
Retained EU Law Bill
The Government has rowed back from plans to impose a “sunset” on all EU-derived legislation at the end of 2023.
The so-called “post-Brexit bonfire” had received significant criticism across the political spectrum for the speed with which it was being imposed and the risk of important legislation falling away by default, introducing a huge amount of uncertainty for business.
Instead, the Government plan to provide a list of 600 laws the government wants to replace by the end of the year.
If you would like to discuss any of the topics covered in this update in more detail, please contact Partners Merrill April or David Fisher, both of whom specialise in employment and partnership law issues for multinational employers, senior executives, partnerships, LLPs, partners and LLP members.