May 2024 Newsletter

Upcoming changes ahead – Consultations on TUPE and new rules on Tip Management

May 2024 KLG Newsletter

Case Law Update – Matthews v. CGI IT UK Ltd [2024]

Unfair dismissal:In a rare case, the Employment Appeal Tribunal (EAT) has ruled that dismissal was fair despite the employer not adhering to any formal dismissal process. The claimant had been at risk of redundancy, but the process was halted after he successfully filed a grievance claim about being placed at risk. The grievance also included allegations that his line manager had undermined and scapegoated him, but these allegations were not upheld.

Following this, the employer made efforts to mend the relationship with the claimant and to keep him employed, but the claimant, who was on sick leave at the time, refused to cooperate. The Employment Tribunal (ET) found that the claimant imposed unreasonable conditions for his return to work, became confrontational, and threatened further grievances, tribunal claims, and referrals to the employer’s ethics team. A more senior line manager considered that the relationship had broken down so much that it was incapable of repair, and the claimant was dismissed without a warning and with no right of appeal.

The EAT found that in all the circumstances, this did not constitute an unfair dismissal, although the EAT acknowledged it was an unusual and rare case. As such, prudent employers should nonetheless continue to follow a dismissal process as this remains an essential part of a fair dismissal, other than in truly exceptional circumstances.

Government consults on clarifications to TUPE

The government has announced a consultation seeking views on proposals to clarify two aspects of TUPE legislation:

1. Making it explicit that TUPE does not apply to limb (b) workers and is applicable only to employees.

A first instance employment tribunal decision had created uncertainty as to the scope of application of TUPE to workers. The consultation, therefore, proposes amending the definition of “employee” within TUPE to explicitly state that limb (b) workers do not fall within the scope of protection of TUPE.

1. Where a business or service transfers to multiple buyers or service providers, TUPE will require that the whole (not part) of an employee’s role transfers to a single employer (rather than having their employment split between multiple buyers or service providers).

The consultation highlights the risks involved when employees are required to work across multiple sites and the complexities related to dividing employees’ terms and conditions among multiple employers. It remains unclear how this proposal would be implemented in practice.

This consultation is open until 11 July 2024.

Tronc and Tips

Tips are a significant employment benefit, particularly in the hospitality sector, as many employees are on minimum wage, and tips serve as a massive motivating factor, resulting in happier guests and improved service overall.

However, many employers find it challenging to manage and distribute these tips. There are new updates and legislation coming into place regarding tips and the tronc system, and this will require businesses to review their current procedures and ensure fair management of tips within the business. A code of practice on the fair and transparent allocation of tips has now been published and laid before parliament. It is expected to come into force on 1 October 2024.

Read more about this in our blog here.

Consultation of sexual harassment guidance update

The Equality and Human Rights Commission intends to open a six-week consultation in early summer on its revisions to its technical guidance on Sexual harassment and harassment at work. This update is to align with the changes introduced by the Worker Protection (Amendment of Equality Act 2010) Act 2023 (Act), which will take effect on 26 October 2024. The new legislation:

• Imposes a new mandatory duty on employers to take reasonable steps to prevent sexual harassment of their employees.

• Grants employment tribunals a new power to uplift an employee’s compensation by up to 25% where an employer has breached that duty.

The final guidance is due to be published in September 2024 aims to clarify the measures employers should take to comply with the mandatory duty. These measures are likely to include clear policies, comprehensive training for staff and managers, appointing workplace champions, conducting regular surveys, and providing multiple methods for reporting concerns.

Artificial Intelligence (AI)

The TUC (Trades Union Congress) has published a draft Artificial Intelligence (Regulation and Employment Rights) Bill. Although legislation in this area is not anticipated soon – the government has indicated it will legislate in due course once the risks are better understood – this draft may serve as a valuable foundation for debate and policy development.

Paternity Bereavement

Legislation to introduce a right to leave for a father or male partner following the death of the mother or primary adopter of their child is progressing through the legislative process. The latest draft of the proposed legislation clarifies that it aims to provide for 52 weeks of leave during the first year of the child’s life.

Fire and rehire

This practice involves dismissing an employee and offering them a new employment contract on different terms to effect changes in their terms and conditions if the employee has not agreed to those changes.

The statutory code of practice on dismissal and re-engagement will be implemented in July 2024. Legislation has also been introduced to Parliament to stipulate that the 25 percent uplift for failing to follow the code will apply to protective awards when there has been a failure to consult collectively.

The new Code is intended to provide practical guidance for employers who are proposing to make changes to employees’ terms and conditions and where agreement to those changes cannot be reached.

The Code recognises that dismissal and re-engagement may be needed but sees this as a last resort; the emphasis in the Code is on employers taking all reasonable steps to explore alternatives and to engage in meaningful consultation, and not raising the possibility of dismissal unreasonably early, or using it as a threat. If agreement on a way forward cannot be reached through consultation, the Code requires the employer to re-examine its proposals and to contact Acas for advice before raising the prospect of dismissal and re-engagement.

By Suraj Purohit.

Employment Paralegal at Kalra Legal Group

29/05/2024