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Flexible Working, Tech Sector Mass Redundancies, Age Discrimination and the Future for Employers Post-Brexit – Employment Law Matters: Edition 2

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 Working

On 5 December 2022, the Government published a response to the ‘making flexible working the default’ consultation. In its response, the Government confirmed its intent to introduce secondary legislation to implement the right to request flexible working as a day 1 right. This means employers should be aware that employees will no longer be required to complete 26 weeks continuous service before qualifying for the right to make a flexible working application.

The Government also introduced the following measures which will be delivered through support for a private member’s bill entitled ‘Employment Relations (Flexible Working) Bill’, which Labour MP Yasmin Qureshi introduced:

  • A requirement for employers to consult with the employee when they intend to reject a flexible working request.
  • Allow 2 statutory requests in any 12-month period (increasing it from the current 1).
  • Require a decision period of 2 months in respect of a statutory working request (rather than the current 3 months).
  • Removing the existing requirement that the employee must explain the effect that the change applied would have and how that effect may be dealt with.

This bill aims to provide employees with greater flexibility and control over how, when and where they work with the intention of increasing productivity and wellbeing.

So, when can employers expect to see these changes implemented?

The Government has not established a definite timeline for the secondary legislation, instead stating that the day 1 right will be introduced “when parliamentary time allows”.

The primary legislation, the Employment Relations (Flexible Working) Bill, is now at the Report Stage in the House of Commons and the next sitting is on 23 February 2023.

If it becomes law, one area which will need to be looked at is an employer’s recruitment policy and in particular the thorny issue of whether it would be discriminatory to ask employees at interview (or after they have accepted an offer) whether they intend to apply immediately for flexible working. Where the employer believes the role will not be suitable for such a work pattern, this will need to be made very clear, with appropriate reasoning and evidence to support it.

Employers will also need to consider updating their training for managers who undertake recruiting to ensure they are fully aware of the barriers to employment for diverse candidates and their legal obligations not to discriminate.

Head-hunters and recruiters should also be careful not to make promises to candidates which the prospective employer may not be able to fulfil.

Mass Redundancies in the Tech Sector

In November 2022, Twitter, Meta and Amazon have instigated their plans to reduce costs by implementing mass redundancies across the globe. Despite the potentially fair reason to axe thousands of jobs, the tech giants’ approach to redundancies remains questionable.

In many countries, the law requires employers to inform and consult its employees in respect of proposed redundancies and notify a relevant body (if applicable) in advance of the first dismissal. Twitter has allegedly failed to notify the Employment Development Department (the USA, CA) and consult its employees in advance of redundancies resulting in a class action. According to Elon Musk, the affected employees received more than what Twitter was required to pay. Meta has also supposedly offered enhanced redundancy payments to the 11,000 laid off employees. Unsurprisingly, Amazon is set to follow the same approach by offering additional compensation for job losses.

The shift in the culture following the P&O redundancies in the UK suggests that employers are likely to offer enhanced payments rather than deal with redundancies appropriately, seemingly inured to potential reputational damage and risk of litigation. 

Case Law Update

Bathgate v. Technip UK Ltd

Mr Bathgate had been employed by Technip Singapore Limited as a Chief Officer for approximately 20 years, when his employment was terminated by way of a voluntary redundancy agreement. At the time of signing the agreement, it was unclear whether Mr Bathgate would be entitled to receive an additional payment in June 2017. This was because the company had not yet decided how to interpret the redundancy agreement according to the historic collective agreement to which it referred.

In early March 2017, Mr Bathgate’s employer decided that he would not receive the additional payment because he was aged 61 or over. However, this decision was not communicated to him until June 2017. As a result, Mr Bathgate raised a claim for direct and/or indirect age discrimination. The parties agreed the discriminatory act took place after his employment had ended, and that Section 108 of the Act therefore applied.

Section 108 EqA extends protection from discrimination and harassment to relationships which have terminated, including those between employers and employees. This ongoing protection applies provided the alleged discriminatory act, omission or harassment:

  1. arises out of and is closely connected to the former employment; and
  2. would contravene the Act if it had occurred during the employment relationship.

The EAT ruled that Mr Bathgate’s claim could not succeed, and this was because he had worked outside UK and European Economic Area waters on a Bahamas-registered ship for the majority of his employment and so he was not entitled to raise an action under the EqA. Nonetheless, the EAT had no difficulty accepting that the EqA extended protection for post-employment claims to any and all former employees who had worked in the UK (or in UK or EEA waters, as well as on ships registered in the UK) for the majority of their careers.

Technips’s decision not to make the additional payment to Mr Bathgate because of his age had not been made when the agreement was signed. Notwithstanding that fact, Technip argued that, as the agreement listed “direct or indirect discrimination” and “age discrimination” claims as having been waived, the particular complaint had been validly identified and Mr Bathgate had accordingly surrendered his right to raise these claims. However, the EAT did not agree.

The EAT stated that before an employee could validly waive their rights to a statutory claim, it was essential for an actual complaint, or at least the grounds for an actual complaint, to exist. Since, in Mr Bathgate’s case, his eventual claim “depended on discussions whose outcome was unknown, the parties could not settle any future complaint of age discrimination”.

The Future for Employers Post-Brexit

On 23 June 2016, the UK referendum returned a 51.89% percent vote in favour of leaving the European Union (EU). The UK subsequently left the EU on 31st January 2020 after signing a Withdrawal Agreement on 24 January 2020. The Withdrawal Agreement covered separation issues with the UK withdrawal from the EU to ensure a smooth transition period for the UK. This included implementing the transition period during which the EU treated the UK as if they were a Member State in the months leading up the formal exit.
During this ‘transition period’, multinational employers operating in the UK largely maintained “business as usual.” After much uncertainty surrounding whether a Brexit trade deal would be reached and what this deal would contain, this transition period came to an end on 31 December 2020 with the EU-UK Trade and Cooperation Agreement in place.
Following the end of the transition period, a new category of UK law was created under the European Union (Withdrawal) Act 2018. This Act works to retain specific EU-derived domestic legislation, save and convert directly applicable EU legislation into UK law, and save and convert most of the EU rights (such as directly effective rights in EU treaties) into UK law. The purpose of this was to ensure legislative continuity and stability within the UK legal system immediately following the exit from the EU as, without retained EU law, there would have been significant gaps where policy areas were formerly governed by EU law.
Now, the UK Parliament is considering the Retained EU Law (Revocation and Reform) Bill 2022 which proposes to end the special status of retained EU law in the UK and enable the Government to amend, repeal and replace all retained EU law. The Government, in its proposal, stated that retained EU law was never intended to sit on the statute book indefinitely and that by ending the special status of retained EU law, it will be reclaiming the sovereignty of parliament.
What does this mean for employers? In an employment law context, the introduction of this bill could allow the Government to make changes to the law in the UK in a way that diverges from mainland Europe. Specifically, it would open the door to the potential repeal or amendment of the Working Time Regulations 1998, the Transfer of Undertakings (Protection of Employment) Regulations 2006 and some of the UK’s anti-discrimination legislation.Employers should pay close attention to the bill which is anticipated to receive Royal Assent around April/May 2023, with the Government targeting a 31 December 2023 deadline for the revocation or amendment of the retained EU law.

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.