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Labour’s Employment Proposals; New NDAs Legislation; Updated Guidance on Pregnancy, Adoption & Maternity Rights & Flexible Working Act Becomes Law – Employment Law Matters: Edition 8

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

Labour’s employment proposals

The Labour party launched its election Manifesto on 13 June 2024, which confirms its ambitious plans to reform employment law if elected. Billed as “the biggest upgrade to rights at work for a generation”, the reforms encompass a number of key policy areas including increased day-1 rights, ending “one-sided flexibility”, increased family-friendly rights, increased trade union roles, equality and diversity, and workplace rights for a bigger pool of people. We outline several of the key proposals below:
Qualifying periods and time limits:
The most radical proposal is the abolition of a qualifying period for unfair dismissal claims (which is currently 2 years). Despite the qualifying period going up and down depending on the party in government over the years, it has never been less than six months. If this proposal was implemented, it would mean substantial changes for employers in recruitment processes and use of probationary periods, as well as a significant increase in unfair dismissal claims.
Single worker status:
Currently, individuals are classified as either ‘workers’, ‘employees’, or ‘self-employed’ and each category has a different set of legal rights and taxation obligations. Labour has proposed the creation of a single status of ‘worker’ for all but the genuinely self-employed. This would extend many workplace rights to a far larger pool of people. However, it is likely to be very difficult and complex to implement in practice.
Ban on “fire and hire” and zero hours contracts:
Zero hours contracts will be banned and new rights will allow workers to work regular shifts based on the hours worked in the previous twelve weeks. Workers would also receive compensation for cancelled or curtailed shifts.
Family-friendly rights:
Labour have proposed a raft of family-friendly reforms, including making it unlawful to dismiss a woman for six months after her return from maternity leave (expect in specific circumstances), review of parental leave with a view to making it a day-one right, review of carer’s leave with a view to making it paid, and further reforms to the flexible working legislation to ensure “flexibility is a genuine default”.
These are just some of the reforms Labour have proposed (look out for our more detailed article on the proposals, to be published shortly) and as they stand, the proposals represent the most employee-favourable changes to the law for decades. The Labour party has indicated its intention to start the legislative process to implement the reforms within 100 days of entering government.  However, due to the need for full consultation and parliamentary processes, as well as the sheer volume of proposals, it is likely to be a while before we see such reforms implemented, whilst others may be significantly amended or not go ahead at all.

New legislation on NDAs

In the final days before Parliament was dissolved for the general election, the Victims and Prisoners Act 2024 was passed. It is perhaps an unlikely place to find legislation relevant to employment law, but in fact contains the first statutory intervention in relation to non-disclosure agreements since they came so heavily under the spotlight as part of the #MeToo movement more than five years ago.

Section 17 of the new act protects the rights of victims of crime to make disclosures to certain persons or authorities and renders void any agreement which seeks to prevent such disclosures. Permitted disclosures for these purposes include disclosures to the police, lawyers, regulators, medical professionals, victim support and the immediate family of the victim (but not a disclosure made in order to release information into the public domain).

The new provision does not amount to a ban on NDAs in cases of sexual harassment or otherwise, but does mean that any confidentiality provision contained in a settlement agreement where a criminal act has potentially taken place (for example, serious sexual misconduct) will need to include clarity around permitted disclosures. Some concerns were raised about the potential confusion between this regime and the “protected disclosure” regime under the whistleblowing legislation, but the government has sought to make clear that this new provision does not impact on the whistleblowing regime.

The provision will not make a huge amount of difference to many employers in practice given the changes we have seen to the use of NDAs in recent years and the lengthy carveouts routinely (and rightly) added to confidentiality clauses in settlement agreements to provide clarity and certainty for those signing. However, employers will need to pay particular attention to confidentiality clauses in cases involving potentially criminal behaviour.

CheckYourNDA – Online Tool:
Are you concerned whether the NDA you are drafting is ethical? Is it enforceable and in line with best practice? CM Murray LLP’s free, anonymous online tool provides a transparent traffic light system, outlining potential risks, guidance and suggested improvements. Click here to check your NDA.

EHRC releases updated guidance for employers on pregnancy, adoption and maternity rights

A number of employment law changes took effect on 6 April 2024, including several changes to maternity, adoption and parental leave rights. The Equality and Human Rights Commission has updated its guidance on Pregnancy, Adoption and Maternity rights aimed at helping employers to understand their obligations under relevant legislation.

The guidance sets out in clear, simple terms what employers should be thinking about before, during and after parents take leave. For example, in addition to setting out the rights that employees have whilst on maternity leave, the guidance highlights other rights that may be relevant to parents returning from leave such as flexible working requests, which have become a day one right as of 6 April 2024.

In addition to setting out the minimum statutory entitlements employees have, the guidance offers ideas for employers who may want to offer enhanced contractual entitlements in line with best practice.

Key changes:

  • Protection from redundancy for people who are pregnant or are on or returning from maternity, adoption or shared parental leave has been extended. Employers must prioritise offering alternative roles to people who are pregnant or are on or have recently returned from maternity, adoption or shared parental leave who have been selected for redundancy. Failure to do so will result in the dismissal being automatically unfair. This protection begins from the time the employer is notified of the pregnancy and has been extended to last for 18 months from the date of birth or adoption (placement).
  • Paternity leave may now be taken in two separate blocks of one week any time in the first year after birth (or adoption placement).

ACAS Code on Flexible Working

On 6 April 2024, the Employment Relations (Flexible Working) Act 2023 became law and made changes to the way in which flexible working requests must be treated by employers. It remains the case that the right is only to request flexible working arrangements – there is no absolute right to work flexibly.

The key change is that the Act has removed the requirement for employees to complete 26 weeks continuous service before qualifying for the right to make a flexible working application – employees now have the right to make a statutory request for flexible working from the first day of their employment. In addition, the new legislation also introduces the following measures:

  • Employees can make 2 statutory requests in any 12-month period (increasing from 1)
  • An increase in the employer decision period of 2 months in respect of a statutory working request (rather than 3 months)
  • Removing the requirement that an employee must explain the effect that the change applied would have and how that effect may be dealt with

Together with this legislative change, ACAS has published an updated flexible working Code of Practice (the “Code”) and additional guidance with the aim of fostering flexibility for employees and setting out good practice for employers when faced with a flexible working request.

The Code outlines that statutory requests are expected to be handled in a ‘reasonable manner’. What constitutes a reasonable manner will vary on a case-by-case basis, but employers should carefully consider the effect and impact of the requested change. It is key for the employer to be aware that, if rejecting a flexible working request, this must only be done where there is a genuine business reason for the decision not to allow the application.  

The Code provides the following examples of genuine business reasons which are set out in the Employment Rights Act 1996:

  • The burden of additional costs
  • An inability to reorganise work amongst existing staff
  • An inability to recruit additional staff
  • A detrimental impact of quality
  • A detrimental impact on performance
  • A detrimental effect on ability to meet customer demand
  • Insufficient work available for the periods the employee proposes to work
  • Planned structural changes to the employer’s business 

In situations where an employer makes the decision to reject a flexible working request, the Code stipulates that the employee must be consulted with before the decision is finalised in order to ensure that the application is fully understood before a final decision being made.

Any decision must be confirmed to the employee in writing and without unreasonable delay. The new legislation has introduced a two-month period for deciding requests which includes the time allowed for an appeal.

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.

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