Monthly Highlights – UK Employment Law – January 2024

In this month’s instalment, our team discuss:

• Changes to paternity leave that will come into force on 8 March 2024.
• A substantial ruling by the Court of Session which held that unknown future claims can be settled if clearly identified in a settlement agreement.
• Changes to the Code of Practice on preventing illegal working: Right to Work Scheme for employers.
• The Government’s consultation to reintroduce fees in the Employment Tribunal and Employment Appeal Tribunal.
• The ACAS draft Code of Practice on requests for flexible working.

Draft regulations to amend statutory paternity leave.

The government has published draft legislation of the Paternity Leave (Amendment) Regulations 2024. The regulations will come into force on 8 March 2024 and will apply to children born or placed for adoption on or after 6 April 2024.  The key changes are that fathers and partners will:

• Be able to take paternity leave any time in the 52 weeks after the birth or adoption (rather than within eight weeks of birth or adoption).
• Only need to give 28 days’ notice of their intention to take paternity leave (rather than 15 weeks before the expected week of childbirth - although notice of entitlement must still be given 15 weeks before birth).
• Be able to take two-weeks paternity leave as two separate one-week blocks (rather than having to take two weeks together).

Key takeaways:

• Employers should review and update their paternity leave policies to ensure compliance with the changes.

Unknown future claims may be settled under Equality Act 2010 if clearly identified.

In the case of Bathgate v Technip Singapore PTE Ltd, the Scottish Court of Session ruled that unknown future claims arising under the Equality Act 2010 may be waived in a settlement agreement provided that the types of claims are clearly identified.

Facts:

• The claimant signed a settlement agreement in January 2017 as part of a redundancy exercise.
• Under the settlement agreement, the respondent agreed to pay notice pay, enhanced redundancy pay, plus an “additional payment.” The additional payment was to be calculated in accordance with the terms of a collective agreement and to be paid in June 2017. However, the collective agreement provided that additional payments were only to be paid to officers under the age of 61. As the claimant was aged 61 on the termination date, the respondent did not pay the additional payment.
• The claimant argued that the failure to make this additional payment was post-employment age discrimination and brought a claim in the Employment Tribunal.
• The Employment Tribunal held that the settlement agreement constituted a full and final settlement of all the claimant’s claims. Indeed, the settlement agreement listed various types of claims, including age discrimination, and included a waiver excluding “all claims…of whatever nature (whether past, present or future).” The Employment Tribunal therefore held that the claim could not proceed as a result of the waiver.
• The claimant appealed against the Employment Tribunal’s decision, arguing that the Equality Act 2010 does not permit settlement of claims before they have arisen, and that the waiver was limited to claims which were known to the parties.
• The Employment Appeal Tribunal agreed, finding that future claims that had not arisen at the date of the settlement agreement cannot be settled.
• The respondent appealed the Employment Appeal Tribunal’s decision.

The Court of Session’s findings:

• The Court of Session disagreed with the Employment Appeal Tribunal. It held that the wording of the settlement agreement did prevent the claimant from bringing a claim for age discrimination.
• Further, it was satisfied that future claims which an employee does not have knowledge of may be settled if the wording of the relevant waiver is “plain and unequivocal”.
• It also held that “it was clear that the agreement was intended to cover claims of which the parties were unaware and had not accrued” at the time of entering the settlement agreement.

Key takeaways:

Whilst the Court of Session’s judgment is not binding in England and Wales, it could be highly persuasive, subject to any appeal by the claimant to the Supreme Court.

This decision is undoubtedly good news for employers as it makes it easier to achieve a “clean break” with employees after termination. However, employees and their advisers will likely focus on the specific claims that are being settled in the agreement, and this may result in push back on clauses that try to settle all future claims.

It is also important to note that this case relates to claims under the Equality Act 2010. Nevertheless, it seems unlikely that a different outcome would be reached in respect of the settlement of future claims under the Employment Rights Act 1996.

The Home Office publishes updated statutory Code of Practice for employers on preventing illegal working.

The Home Office recently published an updated version of the statutory Code of Practice on preventing illegal working. The updated code will come into force on 13 February 2024. It sets out the prescribed checks employers should conduct to avoid a civil penalty in the event of illegal working.

The key changes to note are that the maximum civil penalty will increase from £15,000 to £45,000 per illegal worker for a first-time breach, and the maximum penalty for repeat breaches will increase from £20,000 to £60,000 per illegal worker. There is, however, scope for a fine to be reduced if it is a first time fine and payment is made in full within 21 days.

Key takeaways:

Employers should ensure that they are conducting right to work checks on every employee in accordance with the updated code. Employers can avoid civil penalties by establishing a statutory excuse by undertaking right to work checks pursuant to the code.

Therefore, we recommend employers review their internal right to work check policy and ensure their process meets the requirements of the updated code. Staff who are responsible for right to work checks should, where necessary, receive training on how to carry out the checks correctly and how to keep an adequate record of undertaking such checks.

In addition, employers should endure they conduct follow-up checks in accordance with the updated code on employees whose permission to work in the UK is time limited.

Employment Tribunal Fees

The Government has launched a consultation paper on reintroducing fees for bringing claims in the Employment Tribunal and the Employment Appeal Tribunal.

Employment tribunal fees were squashed back in July 2017 after the Supreme Court held them to be unlawful on the basis that they were “inconsistent with access to justice”. However, the consultation paper provides that the proposal to reintroduce fees is “to relieve some of the cost to the general taxpayer” and to “incentivise parties to settle their disputes early through ACAS without the need for claims to be brought to an Employment Tribunal”.

The consultation paper proposes that a fee of £55 would be payable by a claimant on bringing a claim to the Employment Tribunal (the fee would remain £55 in the event of a multi-claimant claim, with the multiple claimants being treated as a single entity) and a fee of £55 would be payable by the appellant upon lodging an appeal in the Employment Appeal Tribunal.

The consultation will run for a period of 8 weeks and will close on 25 March 2024.

ACAS Code of Practice on requests for flexible Working

ACAS has published a draft code of practice on flexible working. The draft code incorporates the changes made to flexible working laws which will come into force on 6 April 2024 (see here for further information on the changes).

The draft code provides guidance to employers and employees on:

• Making a flexible working request;
• Considering a flexible working request;
• Consulting with the employee;
• Communicating a decision to the employee about the request; and
• Handing an appeal.

If approved, the draft code is expected to come into effect in April 2024.