Employment Update - January 2025
Key employment and business immigration developments for employers
In the News
Preventing sexual harassment
The Welsh Rugby Union (WRU) has signed a legal agreement with the Equality and Human Rights Commission (EHRC) to improve its workplace culture and its measures to protect staff from discrimination and harassment. This follows an independent report in 2023 that found aspects of WRU's culture were sexist, misogynistic, racist and homophobic and not properly challenged.
Under the agreement, the WRU has committed to introduce mandatory DEI training for all employees, board members, management and senior leadership, as well as training on harassment and dealing with complaints of sexual harassment for people managers. The WRU has also committed to review its use of non-disclosure agreements (NDAs), given concerns about an over-reliance on NDAs to silence employees.
This follows similar agreements reached by the EHRC with IKEA and McDonald's in 2023. The cases highlight the powers of the EHRC to enforce equalities legislation, in particular the new duty to prevent sexual harassment which came into force in October 2024. Employers who have not done so already should ensure they have conducted a risk assessment and have appropriate measures in place to prevent workplace sexual harassment, including policies and training for staff at all levels.
The case is also a reminder that employers should consider carefully the use of confidentiality provisions and NDAs when settling claims of harassment, particularly sexual harassment, following increasing concerns that these are used too frequently to silence victims.
Immigration Radar
Sponsor licences
The Home Office and the Department of Health and Social Care have announced measures to crack down on visa abuse which could affect all employers who are licensed immigration sponsors. Employers who repeatedly breach visa rules or commit serious employment law breaches (such as failing to pay national minimum wage) will be barred from sponsoring overseas workers for at least two years. Currently employers can be barred for a maximum of 12 months in these circumstances.
In addition, all employers will be prevented from passing on the costs of visa sponsorship to skilled workers. Currently the immigration skills charge cannot be passed on to workers, but other visa costs can. Many employers seek to clawback sponsored visa fees from employees who leave within a certain period – it is not yet clear how these measures will impact on such clawback arrangements.
Travelling with expired Biometric Residence Permits
All current Biometric Residence Permits (BRPs) expire on 31 December 2024 as part of the Home Office's ongoing transition to eVisas. However, in order to maintain a smooth transition to a digital immigration system, the Home Office have announced that expired BRPs will continue to be accepted as valid evidence of permission to travel to the UK until at least 31 March 2025, provided the individual continues to have valid immigration permission beyond this date.
Case Watch
Objections to TUPE – who is responsible?
The employee in this case was a bus driver at a garage that was approximately a 15-minute walk from his home. His employment was due to transfer to a new service provider after his employer lost the contract to service his bus route. However, the employee objected to the transfer as it would have meant commuting to a new garage that was over an hour from his home. He insisted on being made redundant, but his employer told him that was not an option. He was instead given the option of resigning or remaining with his current employer on increased hours, neither of which were acceptable to him. A question arose as to whether his employment transferred or came to an end and, if so, whether it was a dismissal or a resignation.
The Employment Appeal Tribunal ruled that the employee's employment came to an end, and he was to be treated as having been dismissed by his original employer. The employee had objected to the transfer, which meant his employment could not transfer to the transferee. Further, he had objected in circumstances where the transfer would have involved a change in location to his material detriment. In these circumstances, his employment ended on the date of the transfer and this was to be treated as a dismissal by the transferor.
Employees can object to their employment transferring under TUPE to a new employer. Normally an objection is treated effectively as a resignation – the employee's employment comes to an end at the date of the transfer without any obligation on the employer or employee to provide notice and no unfair dismissal claim. However, where the transfer involves a substantial change in working conditions to the employee's material detriment – such as a transfer to a new workplace which is no longer convenient for the employee – the employee can treat themselves as having been dismissed by their employer. In such circumstances, the employee can bring an unfair dismissal claim. Such a dismissal is likely to be unfair as the main reason for it is the transfer. Outgoing employers on a TUPE transfer need to be aware of such risks and, where possible, seek indemnity protection from the incoming employer (or underlying client in an outsourcing situation, most likely at the outset when their initial contract was entered into).
LONDON UNITED BUSWAYS LTD V DE MARCHI
Redundancy consultation – is it genuine?
The employee in this case worked for a recruitment consultancy as part of a team of 16 people servicing a single client. The employer decided to reduce the size of the team when the client's requirements halved. Before putting anyone at risk, the employer scored the 16 employees against selection criteria which had been provided by its US parent. It was then decided that the company needed to lose two of the 16 roles. As the employee scored the lowest, he was put at risk and ultimately made redundant after a couple of individual consultation meetings. He brought an unfair dismissal claim, arguing that his redundancy consultation was unfair. He complained that the scoring exercise had been conducted before any consultation, so the decision had effectively been made. He also said that he was not informed of his scores until he appealed his redundancy.
The Employment Appeal Tribunal (EAT) initially ruled that the redundancy was unfair. It said that as a matter of good industrial relations, there should have been some form of "general workforce consultation" to discuss the selection criteria and ways of avoiding redundancies while the redundancy proposals were at a formative stage. However, on appeal, the Court of Appeal disagreed. The Court said that in an individual redundancy consultation, there is no requirement for "general workforce consultation". The Court agreed that it was bad practice to carry out the scoring before the consultation had started. However, that did not necessarily make the redundancy unfair. What mattered was whether the employer was given the opportunity to comment on the selection criteria and scoring, and whether the employer would have been prepared to reconsider if it was persuaded to do so during consultation. The Court held that, overall, including the appeal, there had been a fair redundancy consultation.
In a redundancy consultation, the safest option is for the employer to consult over the proposed selection criteria with all employees potentially at risk before conducting any scoring exercise. However, that may not always be possible or desirable in practice. Announcing proposals and putting all affected employees at risk may unsettle staff, including those who will not be made redundant, and may cause some to be demotivated or even look for another job. For these reasons, employers sometimes take a commercial approach by selecting first and consulting later. This case confirms that, while not best practice, it is still possible to have a fair redundancy consultation in these circumstances. However, it is vital that during consultation, employees who are provisionally selected for redundancy are given the opportunity to comment on the selection criteria as well as their scores, and that the employer is prepared to change the criteria or scores if persuaded to do so.
Where 20 or more redundancies are proposed, the employer has a duty to consult with trade union or elected employee representatives about the redundancy process and ways to avoid redundancies. This case confirms that no such general workforce consultation needs to take place where fewer than 20 redundancies are proposed. However, these issues should be covered in individual consultation meetings.
DE BANK HAYCOCKS V ADP RPO UK LTD
New Law
Statutory family friendly pay
The Department for Work and Pensions has published its planned increases to statutory payments. From April 2025, the weekly rate of statutory maternity, adoption, paternity, shared parental and shared parental bereavement pay will increase from £184.30 to £187.18 per week. This increase needs to be formalised in an Order which must be laid before Parliament.
Statutory sick pay
The Department for Work and Pensions has also indicated that from April 2025, the rate of statutory sick pay will increase from £116.75 to £118.75. This increase also needs to be formalised in an Order which must be laid before Parliament.
Separately, the Government plans to remove the current waiting period and earnings threshold for statutory sick pay, so that it would become payable to all workers regardless of earnings from day one of absence. These measures are contained in the Employment Rights Bill and are likely to be implemented in 2026.
Neonatal leave and pay
A new entitlement to up to 12 weeks' neonatal leave and pay for parents of premature babies is to be introduced under legislation passed by the previous Government. The new right will apply where a baby starts neonatal care (lasting at least seven days) within 28 days of being born. This new entitlement is expected to come into effect in around April 2025.
Duty to prevent fraud
On 1 September 2025, a new corporate criminal offence of failure to prevent fraud comes into force. The offence will apply to employers in all sectors and will catch large organisations which satisfy two or more of the following conditions: (i) more than 250 employees; (ii) more than £36 million turnover; and/or (iii) assets of more than £18 million. Under the new law, employers will be liable for fraud committed by an employee, agent or other associated person for the organisation's benefit, where the employer did not have reasonable fraud prevention procedures in place. On 6 November 2024, the Government published guidance on what reasonable fraud prevention procedures might look like. Ahead of the offence coming into force in September 2025, employers should ensure they have appropriate procedures in place, building on existing procedures for the prevention of bribery and tax evasion. For more details, please see our briefing.
Watch this Space
Financial services diversity and inclusion
In September 2023, the Financial Conduct Authority (FCA) published a consultation on proposals for a new regulatory framework relating to diversity and inclusion (D&I) in the financial sector. The proposals incorporate non-financial misconduct into the Conduct Rules, fit and proper assessments and guidance on regulatory references. Under the proposals, larger firms would also be required to develop a D&I strategy, set D&I targets, report and make disclosures on D&I metrics and incorporate D&I into the firm's governance. The FCA has now announced that it will publish final rules on non-financial misconduct in early 2025. Further work on the remaining diversity and inclusion proposals should follow later in 2025.
Community Engagement
- In 2024, Travers Smith participated in the Single Homeless Project (SHP) festive giving by donating over 230 Christmas gifts for people living in SHP's hostels.
- In recent weeks, our team has been involved in a variety of pro bono work for organisations such as Refugees at Home, the Impact Investing Institute and Cyanoskin.
Our Work
Since the last Employment Update, our work has included:
- advising on the departure of a member from an LLP including considering post termination restrictions and settlement arrangements
- advising on TUPE protections for a second generation outsource service provider
- advising on grievances and data subject access requests arising out of a redundancy exercise
- advising a client on hiring employees from competitors
- supporting on the acquisition and integration of two asset management businesses
- advising a listed client on executive changes across multiple jurisdictions
- advising a large international bank on the defence of a complex discrimination claim
- advising a UK travel company on a contentious executive exit.
