Employment in the news | June 2024 | Hogan Lovells

Contents

• General election fever
• Rules on non-disclosure agreements
• Pool of one redundancies
• Considering re-deployment before dismissing for ill-health

General election fever

“Fever” may be stretching a point. But the main political parties all released their manifestos during June, so we’ve got a better idea of the changes we might see once votes are counted and the next government formed in July.

Thinking about the three largest UK-wide parties, Labour was quickest out of the blocks in announcing its employment proposals. We covered the key proposals in last month’s newsletter and in this article discussing some of the political implications.

Employment policy features much less prominently in the Conservative manifesto, although the party commits to maintaining the national living wage at two-thirds of median earnings, overhauling the current “fit note” process to help people remain in or return to work and implementing minimum service requirements in response to strikes in public services. The most controversial suggestion is to amend the Equality Act to clarify that the protected characteristic of sex refers to someone’s biological sex. There’s no mention of imposing limits on the length of post termination non-compete restrictions, so it’s unclear whether that idea would progress.

The Liberal Democrats’ manifesto emphasises the rights of carers, committing to the introduction of paid carer’s leave and to making the status of carer a protected characteristic under the Equality Act. Employers would have a duty to make reasonable adjustments for employees with caring responsibilities. In addition to the existing right to two weeks’ paternity leave, fathers and partners would be entitled to a further month’s paid leave. Paternity pay for the full six composite weeks of leave would be increased to 90% of normal earnings. All parental pay and leave would become a day one right and large employers would be required to publish their parental leave and pay policies. Neonatal leave would be introduced as planned.

Further diversity initiatives under a LibDem administration would require large employers to monitor and publish data on gender, ethnicity, disability and LGBT+ employment levels, pay gaps and progression and to have “aspirational” diversity targets. “Everyone” would have a new right to flexible working, and every disabled person would have a right to work from home, unless there were significant business reasons why this was not possible.

Next steps

• Await the election results on 5 July 2024!
• Once the result is known, prepare to engage in consultation about how policies could be implemented in practice, bearing in mind some of the political drivers behind the proposals.

Rules on non-disclosure agreements

Earlier this year, the Ministry of Justice said it would take steps to ensure that non-disclosure agreements could not be used to prevent victims reporting crimes. That commitment was implemented through the Victims and Prisoners Act 2024, which received Royal Assent just before Parliament was prorogued.

Under the Act, a clause that purports to stop a victim disclosing information about criminal conduct to specified people will be void. The Act covers disclosures to:

• Those with law enforcement functions, such as the police;
• Qualified lawyers, where the disclosure is to seek advice about the conduct;
• Those in a regulated profession, such as medical professionals, to victim support services or to the victim’s child, parent or partner, where the disclosure is made to obtain professional support; and
• A regulator for the purposes of co-operating with the regulator.

Non-disclosure agreements can still be used to prevent someone from making a disclosure where the primary purpose of the disclosure is to release information into the public domain.

Next steps

• The Act is not yet in force, but it seems likely that it will take effect at some point, regardless of the election outcome.
• In practice, settlement agreements drafted by solicitors will already carve out disclosures of the type listed in the Act, because of existing regulatory obligations.
• Employers may want to review settlement agreement templates to ensure that they remain enforceable once the Act comes into force.

Pool of one redundancies

The EAT decision in Valimulla v Al-Khair Foundation is another example of the tribunals’ recent focus on fair individual redundancy consultation, this time in the context of a “pool of one” dismissal.

Mr Valimulla was employed as a fundraising officer for a charity, liaising with local schools and mosques. During COVID, the charity sustained a downturn in contributions and decided that it needed to make redundancies. It identified Mr Valimulla as being at risk of redundancy. Fundraising officers performing similar roles in other locations were not placed at risk. The employer held individual redundancy consultation meetings with Mr Valimulla but confirmed his redundancy. A tribunal rejected his unfair dismissal claim, accepting that there was a genuine redundancy situation and that the employer had followed a fair procedure.

On appeal, the EAT pointed out that tribunals should scrutinise an employer’s reasoning with care, in particular how the employer has approached the question of the proper pool for redundancies. In this case, it was unclear whether the employer’s need for employees to carry out work of a particular kind had ceased or diminished generally, or only at the place where Mr Valimulla worked. Unless the tribunal investigated that issue, it could not decide whether the employer had properly applied its mind to the selection process, whether it had acted within the range of reasonable responses and whether a “pool of one” approach was fair. That involved considering the employee’s role, how it was similar to or different from other fundraising roles, whether the employer had considered pooling and its ultimate rationale for using a “pool of one”.

It was also clear that the employer’s approach to consultation was flawed. Consultation is only meaningful if it takes place in relation to a provisional proposal and gives the employee a chance to provide feedback, comments or observations that the employer considers with an open mind before taking a decision. Here the consultation took place only after the employer had decided to use a “pool of one”. The key issue in the case – why the employer identified Mr Valimulla as at risk of redundancy but not fundraising officers at other locations – was simply not discussed. The consultation that had taken place could not therefore be meaningful and the dismissal was procedurally unfair.

Next steps

• There have been several recent cases stressing the importance of meaningful consultation in an individual redundancy situation.
• Meaningful consultation includes the opportunity for an employee to comment on the employer’s proposed selection criteria before a redundancy becomes a “done deal”.
• Employers should think particularly carefully before embarking on “pool of one” redundancies and must be able to explain the rationale for a pool of one and why that approach was reasonable if challenged.

Considering re-deployment before dismissing for ill-health

Bugden v The Royal Mail Group Ltd is a reminder of the importance of considering whether to re-deploy an employee before dismissing them for attendance reasons.

In 2019, Royal Mail dismissed Mr Bugden under its absence management procedure after he had 297 days of absence over a four-year period. Some but not all of his absences were disability related. He claimed unfair dismissal, failure to make reasonable adjustments and discrimination arising from a disability. The tribunal dismissed his claims, finding that the dismissal was for some other substantial reason and fair. It was justified and did not reflect a failure to make reasonable adjustments because the non-disability related absences would have led to dismissal in any event.

Mr Bugden appealed, arguing that the tribunal had failed to consider whether the employer had explored redeployment as an alternative to dismissal. That was relevant to fairness and would also have been a reasonable adjustment. Even though he had not raised that issue during the tribunal hearing, he was a litigant in person and the tribunal should have raised the point with the parties itself.

The EAT accepted that argument in relation to the unfair dismissal claim. It is well established that the possibility of redeployment is relevant to whether a dismissal arising from ill-health absence is within the range of reasonable responses. Royal Mail’s own attendance management policy said that it would try to identify a suitable alternative role wherever possible for an employee who was unable to undertake their normal role. The tribunal should have raised the question of whether the employer had considered redeployment as a matter of course, even if the parties had not done so. The EAT remitted the unfair dismissal claim for the tribunal to canvass that issue.

The position in relation to the disability claim was different. Although the claimant was now arguing that redeployment to a role away from his manager would have had an impact on his disability related absence, that was not a suggestion that “shouted out” from the evidence before the judge. A suggestion that his mental health may have worsened following a particular conversation with his manager and a complaint about micromanagement did not make it incumbent on the tribunal to raise the possibility of an adjustment that the claimant had not argued for at any stage. That was particularly the case given Mr Bugden’s overall picture of ill-health absence, not all of which was disability related.

Next steps

• The employee will not necessarily succeed in his unfair dismissal claim on remission. It’s at least possible that dismissal was inevitable in light of his overall absence record, regardless of whether redeployment had been considered.
• Having said that, the employer will incur further time and expense in defending the claim. It could have avoided that situation if it had proved to the tribunal that it had followed its absence management policy to the letter.