Guaranteed hours under the Employment Rights Bill – dealing with seasonal work.

Posted on May 9, 2025 by Darren Newman

Under the right to guaranteed hours set out in clause 1 of the Employment Rights Bill an employer will have to make an offer to a worker of guaranteed hours based on some assessment of the hours that the worker has actually worked over the course of a reference period. We don’t yet know who this will apply to, what pattern of work will be required to trigger the offer or how the offer will have to reflect the hours that have been worked. All of those matters are left to later Regulations. But we can say that some sort of offer will have to be made based on the work done over the reference period. 

But what if the reference period is a not a typical period of work? What if it coincides with a busy time where lots of hours are available and the period following the reference period will not be so busy? How is the employer to honour the commitment to the guaranteed hours if those hours are no longer available? 

Take an outdoor catering business. Perhaps the owner has a number of street food vans that can attend sporting events and festivals. In May to September there is something on almost every day and the crowds are huge. Their workers are offered almost as many hours as they would like to work. Then in late September the weather breaks and the work tails off. There are no more summer parties and just a few events per week. No-one needs to be made redundant – the need for employees is the same, but there are fewer hours available. Would the employer still be obliged to make an offer of guaranteed hours based on the hours worked over the busy period or would there be some way of taking the variable nature of the business into account? 

The issue arose in the House of Lords during the latest committee stage debate on the Bill. Lords from the Conservative and Liberal Democrat side worried that employers would be locked into an unsustainable pattern of work. 

Speaking from the back benches, Labour peer Lord Hendy KC (an absolute Titan of UK employment law) made a rather surprising point. He said:

First, the noble Lord, Lord Hunt, suggested that employers would get locked into guaranteed hours. I remind him that all contracts of employment may be varied by mutual agreement or, if not, they can be terminated and there can be re-engagement on fresh terms. (Hansard 8 May 2025, Col 1707)

I mean that is true – currently. But the Bill also makes it automatically unfair to dismiss people and then reengage them on fresh terms. So that particular avenue will be closed off if the workers involved are employees and have the right not to be unfairly dismissed.

Using temporary contracts

Speaking for the Government Baroness Jones of Whitchurch concentrated on the use of limited term contracts to address the issue. She said: 

 Under the guaranteed-hours provisions, it is reasonable for an employer to enter into a limited-term contract with a worker if the worker is needed only to perform a specific task and the contract would terminate after that task has been performed—for example, waiting at tables at a wedding—or the worker is needed only until an event occurs or fails to occur, after which the contract would terminate. This could include a worker covering another worker who is on sick leave or a worker needed only for some other kind of temporary need that would be specified in regulations, the contract expiring in line with the end of that temporary need…

We are aware of fluctuations in demand for seasonal workers, and we will take this into account when designing the regulations on the definition of temporary need. This is a novel right and, by defining temporary need in regulations, we will be able to react dynamically to changing employers’ practices and respond to circumstances where employers identify genuine temporary needs that are not covered by a specific task or the occurrence of an event. (Hansard 8 May 20205, Col 1711) 

The reference to ‘temporary need’ here is in relation to the new S.27BB of the Employment Rights Act 1996 that the Bill introduces. It sets out a number of requirements in relation to the guaranteed hours offer that an employer must make when a qualifying worker has worked in excess of their existing guaranteed hours over the course of a reference period. The section provides that the guaranteed hours offer must propose the removal of any term providing for the contract to terminate ‘by virtue of a limiting event’ (for example, after a period of time or when someone returns from maternity leave). 

This stops the employer getting around the new right by making a guaranteed hours offer but including a term that limits the new contract to a temporary period. There is an exception however if, on the day the guaranteed hours offer is made, it would be reasonable for the contract to be entered into as a limited-term contract. One circumstance in which this would be reasonable is where the employer reasonably believes that there is only a temporary need ‘of a specified description’ for the worker to do work under the contract. It is here that Baroness Jones sees the Government stepping in with Regulations to provide that ‘temporary need’ will include work subject to seasonal variations in demand. 

I am not sure we need Regulations to tell us what temporary need means, but that’s a side issue. The point is that an employer will be allowed to hire seasonal workers on temporary contracts which will not be made permanent by the obligation to make an offer of guaranteed hours. 

All of which is fine – but rather misses the point. What if the employer does not have a temporary need for workers but a continuing need for workers whose hours will vary with customer demand? Our catering business does not want to engage people on three-month contracts over the summer and then make them redundant. It wants to continue employing them for the whole year and give them some extra hours in the summer. Will that still be legal when the provisions on guaranteed hours are brought into force? 

It is difficult to say at the moment because we still don’t know who the new rules will apply to – how many hours a week do you need to be guaranteed in order to be outside this regime? I wrote about this issue last year and we still don’t have an answer. But unless the threshold is set so low that trade unions will be absolutely up in arms, I don’t see how the Government can square this circle through Regulations. Employers will simply have to recruit additional temporary staff for busy periods rather than give extra work to existing employees. They could perhaps offer additional temporary contracts to existing staff so that they are employed under two separate contracts to do the same work – but with the temporary contract covering the additional hours. But I can’t see our owner of street food vans being keen on that solution. 

Dodging the right altogether

Another way might be to avoid the obligation altogether by agreeing additional guaranteed hours during busy times of the year. This would work by regularly updating the contract so that it guaranteed as many hours as were likely to be available in the coming weeks or months. So someone who is generally employed on a zero hours contract could during a busy period be offered a contract that guarantees a certain amount of hours during that period. At the end of that period the hours would automatically return to normal. The guaranteed hours offer is only required where the worker works in excess of the hours guaranteed by the contract. So if the employer were to offer a variation in contract that increased the hours that were guaranteed between May and September before reverting to a zero hours arrangement thereafter then the right would not apply. During the busy period the workers hours would not exceed their guaranteed hours. 

I think that is an ingenious solution (though I say so myself). But it is generally not a good idea for the Government to introduce legislation that requires people to come up with ingenious solutions. It also seems unlikely that the average owner of an outside catering business is going to be well placed to arrange a regular amendment to contractual terms to suit the fluctuating needs of the business. I am also not sure what the average worker in a business like that would make of regular requests to vary the contract on a temporary basis. But it’s the best I can do with the materials available.

Not worth the effort?

Let’s not beat about the bush. The right to guaranteed hours under the Employment Rights Bill is an absolute nightmare. It’s provisions are just too complex and will not work. I am not allergic to complexity – it has its place in employment law – but on this issue we need something much more simple and straightforward. The new right is aimed at protecting some of the most vulnerable and low paid workers in the country who often have no workplace representation. They need to understand what their rights are and have an effective means of enforcing them. Any Tribunal claim arising from a breach of this right is likely to be low value – we may be talking about a zero hours worker who should have been guaranteed 8 hours a week at not much more than the minimum wage. Claimants will not be in a position to hire lawyers to help them make sense of the complexities of the law. Even if a large number of employees brought a multiple claim, each one would still vary on its facts with each worker being covered by a different reference period and being entitled to an individual offer based on the hours they happened to work. This will not be like those large-scale claims involving equal pay where everyone’s case is essentially the same. 

Any cases that are brought will then go before some poor overworked Employment Judge who will have to hear them on the same day as a bunch of cases on holiday pay or deductions from wages and will have to try to help unrepresented parties make sense of 20 pages of statute and God knows how many pages of regulations. I have sympathy for those judges – but what about th parties? How long will it take for a vulnerable worker to go from the day when they should have been offered a contract to the day when a Tribunal awards them whatever multiple of a week’s pay is eventually decided upon as the remedy? Who would consider all of that to be worth the effort? This is an absurd way of addressing the genuine problem of insecure work. If it ever comes into force (and I have my doubts) it is likely to be more honoured in the breach than the observance. 

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Will ‘Good’ Employers Welcome the Employment Rights Bill?

Posted on March 14, 2025 by Darren Newman

The Employment Rights Bill has now passed its House of Commons stages and is headed for the House of Lords. It has roughly doubled in size since it was first introduced in October 2024. Most of the amendments made are technical – they take up a lot of pages but they don’t do anything interesting. Some, however, make significant changes to the way in which the Bill’s provisions will operate and I will be writing more about those in the weeks ahead. 

The Bill is, I think, the biggest single piece of new employment law legislation we have ever seen. Excluding consolidation measures like the Employment Rights Act 1996 we have never seen a single piece of legislation attempt to do so much in the field of employment law. Neither the Industrial Relations Act 1971 or the Employment Protection Act 1975 come close in my view. New Labour’s Employment Relations Act 1999 is just not in the same league. The 2025 Act will be in a class of its own. 

Reading the House of Commons debates at Report Stage and Third Reading one argument that really struck me was concerned with how much employers support the Bill. This seemed to really matter to MPs. Essentially the Conservative argument was that this Bill is opposed by employers because it will expose them to more costs and restrictions that will inhibit growth.  Labour’s argument was that good employers should welcome the Bill because they are already doing the things that the Bill requires. Andy MacNae the Labour MP for Rossendale and Darwen said:

“Up until now, good employers have always felt the risk of being undercut by unscrupulous and short-term disruptors looking to make a quick buck. This is a real and serious issue—I have experienced it in business, and many other business owners have raised it with me. Businesses doing the right thing should not be disadvantaged, yet weak and outdated employment legislation has left them exposed. This Bill levels the playing field. Good employers can keep on doing what they do, knowing that their competitors can no longer undercut them by, for instance, employing a majority of their staff on zero-hours contracts, not giving holiday pay, firing and rehiring or just underpaying.” (Hansard, 12 March 2025, col 1142)

This is essentially the same argument that I remember being played out in the New Labour days of the late 90s. Keeping the CBI and the employer’s lobby broadly on side was a key priority and there was essentially an unwritten deal. The Government would consult the business lobby and take their specific objections to new legislation seriously. In return businesses would not throw their toys out of the pram and would make broadly sympathetic noises about the aims of the Bill and the importance of acting reasonably and working in partnership with trade unions (social partnership was all the rage in the late 90s).  A similar process seems to be at work with the Employment Rights Bill today.

It’s all very well – but I don’t really buy it. Employers aren’t supposed to like employment law. It isn’t really meant to help them. If we scrapped the law of unfair dismissal altogether, would the business community really object to that? Would the ‘good’ employers really feel they were being undercut by the ‘bad’ employers who sacked their staff without good reason? Perhaps. But I think most would welcome the freedom that not having to worry about tribunal claims would bring. After all, they could still behave as reasonably as ever and attract and retain talented employees who appreciated the security of working for an employer that would not dismiss them on a whim. 

I just don’t find the ‘undercutting’ argument all that compelling. If we are concerned about a level playing field then the real issue is the number of employers who feel able to ignore legal requirements that are already in place because the Employment Tribunal system is stretched to breaking point. Creating new rights for workers is all well and good but if it takes two years to get to a hearing those rights are not worth much. Those employers who do their best to comply (and I think that is most of them) are likely to feel resentful when they see that other employers can get away with flouting the law because there is no effective way for workers to enforce it. The Employment Rights Bill does try to address enforcement issues – and gives the Secretary of State some interesting new powers. But it remains to be seen whether these will be backed up by the resources needed to make them effective. 

Employment law – when it works – is essentially a restriction placed on managerial discretion. It limits what an employer is allowed to do in terms of recruitment, dismissal and the way in which it treats and rewards its workforce. Good employers would indeed say that they would never want to discriminate or behave unreasonably, but they would have to be positively saintly to welcome the scrutiny of employment tribunals

And even if employers were happy for there to be some basic level of legal protection for employees they could not possibly be happy with the sheer volume and detail of UK employment law. It is at the very best an inconvenience to them. And I positively refuse to believe that any employer will read the new provisions on guaranteed hours inserted by Clause 1 of the Employment Rights Bill and rejoice at the Government’s approach. That would be downright perverse.

None of this is an argument against employment law. I am very much in favour of it and think that in many areas it should go further than it does. Employment law is about balancing the competing rights and interests of employers and employees. But its starting point is the massive inequality of bargaining power between an employer and an individual employee – and that means that balancing the scales involves giving employees rights and placing restrictions on employers. As a result any individual measure will seem one-sided and it is asking too much of employers – even the ‘good’ ones – to expect them to welcome it. The real question is whether the benefits conferred on employees justify the corresponding burden placed on employers. The extent to which the Employment Rights Bill passes that test is something that I think I am going to be talking about a lot over the next four years. 

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Are pubs about to ban people from talking about ‘transgender rights’?

Posted on January 14, 2025 by Darren Newman

Honestly my heart sank when I saw this morning’s front page of the Times:

I don’t think that pubs are going to do this – but let’s look at what the Times is saying:

Pubs could ban customers from speaking about contentious beliefs such as religious views or transgender rights over fears of falling foul of Labour’s workers rights reforms.

The government has been warned by the equalities watchdog that rules could “disproportionately curtail” freedom of expression and be applied to “overheard conversations”. 

The Times is reporting on the written evidence submitted to the Commons Committee currently considering the Employment Rights Bill – which extends an employer’s liability for harassment to unwanted conduct from ‘third parties’ such as clients, customers and members of the public. 

Reading the Times article, I would say that they are overstating the Commission’s concerns, but not by that much. You can read the Commissions full evidence here, but the section on third party harassment concludes:

While we support the prohibition of third-party sexual harassment, we believe the UK government should undertake further analysis to understand how to balance third parties’ rights to freedom of expression under Article 10 and employees’ protection from harassment and right to private and family life provided under Article 8 of the European Convention on Human Rights. This should also take into account any additional complexity that may arise if the third party is expressing a philosophical or religious belief that is protected under the Equality Act 2010. (para 6.10)

On balance I am more irritated by the Equality Commission than by the Times. Here is a meaningful extension of the right not to be subjected to harassment in the workplace and it appears that the Equality Commission is against it because it raises human rights concerns. Really?

Here is where they are coming from. Imagine a scenario in a pub where a member of the bar staff overhears a conversation between two customers discussing their religious beliefs about trans rights. The member of staff happens to be trans (or a committed gender critical feminist, the argument is the same either way), is upset by what they hear and complains to a manager. The manager responds by asking the customers to leave – with the result that their freedom of expression is being curtailed.  Rather than face such a risk, employers may feel they have to prevent any conversations on sensitive topics relating to religion or philosophical belief.

The Equality Commission is therefore calling for further analysis from the Government to understand how the rights of the employee to be protected from harassment can be balanced with the rights of the customers. 

I really don’t think that is going to help. The law already provides for that balance in a number of ways.

First of all there is a reasonableness threshold to the whole question of harassment. It is certainly true (and this is not new) that conduct that is simply observed or overheard by the claimant can amount to harassment even if it is not directed at them. But the nature of the conduct – and the fact that it consisted of a private conversation – is certainly a relevant consideration in deciding whether someone has engaged in ‘unwanted conduct’ having the purpose or effect of violating someone’s dignity or creating an offensive or hostile environment. How loud are the customers being? How are they expressing themselves? What sort of language and vocabulary are they using? These factors will also come into play in deciding whether the conduct in question can reasonably be regarded as having the effect required to make it harassment (see S.26(4(c) Equality Act). This is an objective standard of reasonableness applied by Tribunals. It is sometimes said that in harassment what matters is the perception of the victim – and that is true to an extent. But it is not the only consideration. The conduct must also meet a certain level of seriousness. Overall, in the context of overheard conversations between people who are not fellow employees, the threshold for establishing harassment is likely to be quite high.

The other consideration is that an employer will only be liable for third party harassment if it has failed to take all reasonable steps to prevent the harassment from taking place. 

In fact (and here’s a nerdy point) under the provisions inserted by the Employment Rights Bill, the claimant in a third-party harassment case will have to demonstrate that the employer has failed to take all reasonable steps – the burden of proof will be upon them rather than the employer. This is different from other harassment cases where the employer has to establish a defence by demonstrating that it has taken all reasonable steps to prevent the harassment (see S.109(4) Equality Act). 

What steps will be reasonable will of course vary with the situation. One important question may be the extent to which the employer is able to control the environment in which the conduct takes place. For example, it is much easier to see how an employer can protect an employee from being harassed by a customer using a contact centre than from a member of the public passing an employee who is cleaning the street. Sometimes there will not be much that an employer can do other than to support the employee and assist in reporting serious cases to the appropriate authorities. Even environments that the employer controls can present challenges. Think of a care home where a vulnerable resident subjects one of the workers to racial abuse. The employer may not be in a position to insist on the resident leaving. Nor can a local authority necessarily refuse support to a vulnerable person or child because of the way they speak to members of staff. 

One factor that will certainly be relevant in deciding what reasonable steps can be taken is the right to freedom of expression. This is already something that employers have to grapple with in the workplace and while an employer’s liability for third-party harassment does raise fresh issues, I’m not sure it makes things harder. An employer has a reasonable amount of control over how its employees behave in the workplace and has more scope for limiting their freedom of expression than it has in relation to customers in a bar or restaurant. There is therefore less that an employer can reasonably be expected to do in that environment to protect employees from overhearing things that may upset them. 

I really can’t envisage employers actively policing the subjects that their customers choose to discuss. I would gently suggest that any bar or restaurant that actively seeks to ban certain topics of conversation is getting a bit carried away, Nevertheless there will be circumstances in which a reasonable employer might be expected to ask customers to leave if what they are doing amounts to the harassment of staff. Any good employer will be doing that anyway! That may be seen as limiting a customer’s freedom of expression – but I’m not sure how much of a human rights abuse it really amounts to. As with most of employment law – it all just depends. It’s a matter of common sense.

It strikes me as odd that the Equality Commission should be advising the Government to conduct more analysis about how these issues will play out. Surely that is their job? Aren’t they best placed to explain to employers how to make sure that the potentially conflicting rights are balanced appropriately? Shouldn’t they be coming up with practical steps that employers can take to protect employees without violating the Human Rights of customers? If they produced a Code of Practice on the issue – a short and practical guide to the steps that employers should be taking, rather than the 300 page behemoth already in place – then Tribunals would be obliged to take that into account in reaching their decisions. If the Commission feels that they can’t do that then they should say so. But in that case, what are they actually for? 

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More thoughts on “Fire and Rehire”

Posted on January 9, 2025 by Darren Newman

Back in November I wrote about the Employment Rights Bill and its proposal to ban the practice of ‘fire and rehire’. I suggested that the very narrow ‘financial difficulties’ exception that the Bill currently contains would present real problems for employers who need to make contractual changes for reasons other than an imminent financial crisis. I proposed an amendment adding ‘technical or organisational reasons’ to the grounds on which an employer could – where the need for the variation could not reasonably be avoided – impose the change through fire and rehire.

The Bill is currently in its Commons Committee stage which goes through the Bill clause by clause – although some clauses are dealt with rather more briskly than others.  The Committee has also invited written evidence from experts and stakeholders which it publishes alongside its debates. 

I was very flattered to have my argument about fire and rehire quoted in the evidence submitted by Prof Alan Bogg and Michael Ford KC. Their evidence is an absolute ‘must read’ for anyone who is really interested in the detail of the Bill and the impact that it will have. 

But they do make a couple of points about my argument that I’d like to have another go at addressing. 

Flexibility in employment contracts

In my original post I had put forward a number of scenarios where an employer might reasonably feel the need to change terms and conditions. They covered technical and organisational changes that might result from new technology or the changing needs of the client for whom they are providing a service. Alan and Michael suggest that many of these issues could be addressed by an employer without falling foul of the new provision on fair and rehire: 

“The existing law giving employers ample flexibility to run the business is likely to address many situations without the need for “fire and rehire”. The employee is also under a duty to obey lawful and reasonable instructions, and this will include instructions related to the timing and organisation of work. Employment contracts are incomplete by design, leaving employers with the necessary residual authority to change organisational practices through managerial prerogative without affecting contractual terms.” (para 26)

They quote the 1984 case of Cresswell v Board of Inland Revenue in which employees argued that it was a breach of contract for their employer to instruct them to use a computerised system for the administration of PAYE and to refuse to allow them to continue operating the system manually. The High Court held that an employee is expected to adapt to new methods and techniques introduced by the employer. While the employees in question may have suffered some loss of job satisfaction the jobs themselves remained the same – though done in a slightly different way. 

I don’t think Alan and Michael’s argument – or the Cresswell case – meets the point I was making. It is certainly true that there is an inherent flexibility in an employment contract – with the employer controlling how the work is to be done and the employee being under a duty to obey reasonable instructions. Alan and Michael say ‘this will include instructions relating to the timing and organisation of work’ but working hours are usually the subject of specific terms in the contract and are not always flexible. There is certainly no case law suggesting that an employer has the general right to require an employee working Monday to Friday to adapt to a seven day rota just because of the changing needs of the business. Such a change will almost always require a contractual variation. If no agreement can be reached, then what should the employer do?

“Financial Difficulties”

My critique assumed that the exception to the rule against fire and rehire was limited to cases involving financial difficulties threatening the viability of the business as a whole. Alan and Michael suggest that it may be wider than this. They say: 

“In circumstances where only some activities of the business are seriously affected, s.104l(4)(a) envisages that it is sufficient that the financial difficulties were affecting the employer’s ability either “to carry on the business as a going concern” or “otherwise to carry on the activities constituting the business”. This suggests that different activities of the business can be disaggregated and considered separately. If an employer is forced to change the working practices in part of its activities to retain a commercial contract to provide that service to a third party, as in Darren Newman’s first example above, that action might be justified as preventing or mitigating financial difficulties in the immediate future for that specific business activity.” (para 27)

I’m not convinced by that. If the exception were to apply whenever just a part of the employer’s activities were affected then I think the clause would refer to ‘any of the activities of the business concerned’ rather than ‘the activities constituting the business’. As I read the clause it is simply avoiding a technical argument that in some sense the business is still a going concern (perhaps because of investments it holds)  even if it has had to shut down its operations. The phrase ‘the activities constituting the business’ read to me as the whole of its activities constituting the whole of its business. 

I also think that the use of the word ‘financial’ is significant. Of course any difficulty face by a business will be likely to have financial implications but I don’t think that means that any difficulties are ‘financial difficulties’. That phrase to me has overtures of a cash flow crisis rather than, for example, the commercial impact of losing a contract because the employer can’t adapt to the client’s requirements.

If the Government does not intend to the exception to be as limited as I am suggesting then I think an amendment clarifying that would be very welcome – otherwise this is the sort of question that will be hanging over us for years as it makes its slow and majestic way through the courts. 

Variation clauses

An interesting and important point that Alan & Michael make relates to variation clauses. They refer to the case of Bateman v Asda Stores in which the EAT upheld the validity of a broad variation clause tucked away at the back of a staff handbook.  They recognise that the restriction of fire and rehire practices will lead to a greater reliance on such clauses in the future and suggest that “The pre-emptive inclusion of a provision to ban such wide flexibility clauses would be a prudent step for the legislator” (para 31).

On this point I do agree. I think there is a real danger that those employers in a position to do so will start to include very wide-ranging variation clauses in employment contracts in order to avoid having to worry about their inability to force through any necessary changes in the future.  Of course, as was acknowledged in Bateman, any such clause would be subject to the implied term of trust and confidence – it would not allow employers to introduce changes that were calculated or likely to destroy the employment relationship. But variation clauses could give employers a very wide discretion to introduce changes that would otherwise have required the employees’ consent. This would certainly run counter to the intention behind the Bill.

If a restriction on variation clauses were to be imposed, however, it strikes me as even more important to provide more flexibility for employers to introduce changes driven by technological or organisational concerns or at least to clarify just what sort of situation the ‘financial difficulties’ exception is aimed at addressing. 

In reality, I doubt the Government will even consider the sort of amendments I have suggested. They would be accused of giving in to the employer’s lobby and they have already been criticised from the left for the extent to which they have done that on other aspects of the Bill. The most likely outcome is that the ban on fire and rehire will come into force in the form it currently has in the Bill.

As I pointed out in my last post, this is one of those areas of the Bill that will be ready for implementation as soon as it is passed. It does not require further Regulation to make it law, although it is possible that the Government will want to wait until it has issued a revised code of practice on the issue. Such a Code could not, however answer the key question about what the exception to the ban on ‘fire and rehire’ will actually cover.

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Implementing the Employment Rights Bill

Posted on January 7, 2025 by Darren Newman

The employment law issue that will dominate 2025 is the Employment Rights Bill – which at some stage in the Spring or summer will become the Employment Rights Act 1996. The Bill is huge, both literally and in terms of its importance. It is the most wide ranging and important single employment law measure since the 1970s. I’m very excited about it. 

And it has been introduced really quickly. In its election manifesto the Government promised to legislate for its “Plan to Make Work Pay’ within 100 days of coming into office. They hit that deadline – just – but at a cost. The Bill was published before the consultations that would normally take place on how particular provisions would work and without taking the time that is needed to consider how to translate the political promises made in opposition into workable legislation. 

As a result, the Employment Rights Bill is a work in progress. More than 100 amendments have been made to the Bill during its Commons Committee Stage and there are likely to be more before it completes its Parliamentary stages. But there are also a lot of details that will need to be filled in later through Regulation. According to the Delegated Powers Memorandum published by the Business Department there are 82 Regulation-making powers in the Bill. 

That’s a lot. 

They cover a full range from entirely technical matters to major questions of policy that have simply not been decided yet. 

As a result, although the sheer volume of reforms proposed by the Bill might strike many employers as overwhelming, it is important to realise that they will not all be implemented at once. When the Bill is given Royal Assent that is really just the beginning. We will see a series of commencement orders bringing individual provisions of the Act into force as a well as further consultations and draft regulations aimed at fleshing out the missing details in the Act itself. This is a project that will run throughout this Parliament. In the Next Steps document published alongside the Bill the Government acknowledged that the majority of the reforms in the Bill will take effect ‘no earlier than 2026’. Actually, I suspect that while Labour has kept its promise to introduce legislation within 100 days of taking office, there will be parts of the new Act that will still not be in force by the time of the next election.

In terms of planning for the changes to come I think we can generally assume that those measures that do not rely on further Regulation will be implemented first, perhaps as early as the summer of this year. 

The main exception is the abolition of the unfair dismissal qualifying period. Schedule 2 of the Bill repeals s.108 of the Employment Rights Act where the qualifying period is to be found. That in itself requires no further Regulations, it could just take effect and although employers might be unhappy, the law would make perfect sense. However there is also a power to make Regulations modifying the application of the right not to be unfairly dismissed during an ‘initial period of employment’ which we expect to set out a ‘lighter touch’ to reasonableness during a probationary period. The Government clearly intends to use this power and will only remove the qualifying period once it has come up with Regulations dealing with the initial period of employment. They are currently suggesting that the change will not take effect until autumn 2026. 

But leaving aside the unfair dismissal qualifying period, here are the Employment Rights Bill measures that will be ready to be implemented once the Bill gets Royal Assent:

  1. The repeal of the Workers (Predicable Terms and Conditions) Act 2023 
  2. The measures repealing almost all of the Trade Union Act 2016 
  3. Reform of the statutory union recognition procedure
  4. The enhanced right to request flexible working so that any refusal by the employer must be ‘reasonable’
  5. The removal of the three-day waiting period for Statutory Sick Pay 
  6. The requirement for employers to consult any recognised trade union about the allocation of tips and gratuities
  7. The enhanced duty to prevent sexual harassment requiring an employer to take ‘all’ reasonable steps
  8. Making employers liable for the third-party harassment of employees 
  9. The categorisation of sexual harassment allegations as public interest disclosures
  10. The removal of the ‘at one establishment’ test in the collective redundancy consultation threshold
  11. The duty to notify the Secretary of State of collective redundancies affecting a ship’s crew (closing a loophole highlighted by the P&O case) 
  12. Dismissal for failing to agree a variation of contract (or the “banning of fire and rehire”). I think the importance of this change has not yet been fully grasped in much of the commentary I have seen. This is a big one)
  13. The new right to a statement of trade union rights – although provision is made for Regulations setting out just what an employer has to include in that statement so it seems the intention is to issue detailed Regulations before the requirement is imposed. 
  14. The right to paid time off for trade union Equality Representatives
  15. The increase in Employment Tribunal Time Limits from three months to six
  16. Changes paving the way for the Government enforcement of employment rights related to agency workers, sick pay, holiday pay, the National Minimum Wage Gangmasters licencing  and Modern slavery. 

On the enforcement issue it is worth noting that although the powers given to the Secretary of State do not need further Regulation in order to come into effect, the SoS does need to appoint enforcement officers and an Advisory Board. There are budgetary considerations here so let’s see how quickly these appointments are actually made.

Although all of these measures will in theory be ready to go from the time of Royal Assent onwards it would be surprising if they were all brought into force on the same day. I would expect them to go through in batches from the summer or autumn of this year through to 2026. 

At the same time the Government will need to start moving on the measures that need further Regulation before they can be implemented. This will usually involve a consultation exercise where the Government will have to produce a detailed document setting out what its proposals are and then give interested parties about 12 weeks (usually) to respond. The Government then needs to formulate its response – a process which can take several months even when the Government is keen to push the measure through – before it lays Regulations before Parliament.

So with that in mind – here are the measures where further consultation and Regulation is needed before they can be brought into force

  1. The Right to Guaranteed Hours Extensive regulations are needed to define the scope of the new right, determine when it applies, and determine how the offer from the employer must be framed.
  2. Reasonable Notice of Shifts / Cancellation of Shifts / Payment for Cancelled Shifts Regulations here are needed to describe the kind of contract that the right applies to. Regulations are also needed to determine the presumed length of the notice required and the cap on the compensation that can be awarded.
  3. Statutory Sick Pay (removal of lower earnings limit) The amount of SSP is set as the lower of £116.75 and ‘the prescribed percentage of the employee’s normal weekly earnings. So Regulations are need to know what the abolition of the LEL means for the calculation of SSP for low paid workers. 
  4. Parental Leave  (qualifying period) The Bill amends  S.76 of the Employment Rights Act 1996 so that Regulations for parental leave can no longer specify a qualifying period. However, the current Regulations (the Maternity and Parental Leave etc Regulations 1999) are not revoked or amended by the Bill. Those Regulations will have to be amended anyway to address other issues raised by the Bill so we can expect the qualifying period to be removed at the same time as the other amendments. 
  5. Paternity Leave (qualifying period / leave following shared parental leave) Same issue here  as with Parental leave, but this time we are talking about the Paternity and Adoption Leave Regulations 2002 which will need to be amended separately to remove the qualifying period and allow leave to be taken after shared parental leave.
  6. Bereavement Leave The Bill replaces the current right to parental bereavement leave with a general right to bereavement leave of at least two weeks in the case of parental bereavement and one week in the case of other bereavements. But the details of the right will need to be set out in separate Regulations. 
  7. Dismissal During Pregnancy or Following Family Leave.  The Bill introduces a Regulation making power to deal with the dismissal of pregnant employees and those on or recently returned from family leave – amending the current powers that relate to redundancy. What the new rights actually entail is left entirely to Regulations.
  8. Public Sector Outsourcing: protection of workers. The Bill makes detailed provision for regulations and a code of practice dealing with the working conditions of workers on contracts outsourced from the public sector. All of the detail of the new right will have to be consulted on and set out in new Regulations. 
  9. Equality Action Plans. The Bill introduces a power requiring employers of 250 employees or more to publish action plans in relation to gender equality. All of the detail will be contained in those Regulations.
  10. Information Relating to Outsourced Workers The Bill allows the rules on gender pay gap reporting to be extended to require employers to disclose the employment agencies that supply them with workers. Regulations will be needed. 
  11. School Support Staff Negotiating Body / Adult Social Care Negotiating Body.Schedule 3 paves the way for the setting up of a negotiating body setting terms and conditions for non-teachers in education and current clause 29 allows for another covering the Adult Social Care Sector. But this needs extensive consultation and further Regulation before they can actually be set up. 
  12. Right of Trade Unions to Access Workplaces. The Bill introduces a right for unions to seek access to a non-unionised workplace and envisages a complex procedure for negotiating an access agreement and bringing in the Central Arbitration Committee where agreement is not reached. The full mechanics of this will need extensive consultation and detailed Regulations. 
  13. Blacklists. The Bill creates a Regulation-making power enabling the SOS to tighten up the law against maintaining blacklists of trade union members and activists. 
  14. Electronic Balloting for Industrial Action. The Bill repeals the Trade Union Act 2016 provision (never used) for a pilot scheme allowing electronic ballots. It then emphasises that this does not affect the existing power under S.54 of the Employment Relations Act 2004 to make Regulations about the permissible means for conducting union ballots. I have to admit that power had completely passed me by. The Government clearly intends to use this existing power to allow for electronic industrial action ballots, which is technically not a measure reliant on this Bill at all.
  15. Detriment on Grounds of Industrial Action. The Bill introduces a new right not to be subjected to a detriment for taking part in industrial action. However the new right states that an individual must not be subjected to a detriment ‘of a prescribed description’ so in order for the right to come into force we need Regulations telling us what detriments count. 

Just from a practical point of view I would not be surprised if it is well into 2027 before some of these become law and perhaps later. The Government can’t consult on all of these issues at the same time, they will have to pace themselves. When it comes to some of the big structural changes – such as the negotiating bodies for adult social care and in relation to staff in schools – I think the Government will be doing well if it manages to get them up and running before the next election. 

There will also be some areas where coming up with workable Regulations proves to be more difficult than the Government currently expects. I am very sceptical about the ‘right to guaranteed hours’ that takes up the first dozen or so pages of the Bill. There are 15 specific regulation making powers relating to this right alone and I struggle to see how the Government can knock this mess of a provision into workable shape. With so much else to be getting on with, I wonder if this measure might just get lost along the way? 

On the whole there is no reason for employers to feel overwhelmed by the changes just yet. My thoughts are with those interested parties that will be responding to the many consultations that they will see over the next year or so.  

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Guaranteed hours – who will qualify?

Posted on December 5, 2024 by Darren Newman

How many hours do you have to work before you are no longer on a ‘low hours’ contract?

The question is crucial to the right to guaranteed hours contained in the Employment Rights Bill currently at the Committee Stage in the House of Commons. As I have previously set out, this is a complicated right under which a worker who works in excess of their guaranteed hours over a reference period is entitled to be offered a contract reflecting the hours that they have worked. This right continues to apply to them – with subsequent reference periods resulting in further offers of guaranteed hours – for as long as the worker qualifies for the right. 

But who qualifies? The Bill says that those employed on a zero-hours contract qualify (a concept already defined in the Employment Rights Act) but also any worker who, over the reference period, is entitled to be offered a number of hours of work ‘not exceeding a specified number of hours’ (page 2, line 30). 

The right to guaranteed hours set out in the Bill leaves many things to be specified by Regulations, but this is surely the most important of them. The Government has to decide how narrow or how wide this new right is going to be. 

For example, if the threshold was set at three hours per week then the right would not amount to much. Most employers would simply guarantee workers three hours of work and would not have to give the matter any further thought.  If the threshold were to be set at 20 hours per week then that would be a completely different matter. Most part-time workers would be in scope and employers would have to monitor any additional hours they worked very carefully – offering them guaranteed hours whenever their working pattern met whatever criteria as to number and regularity that the Government eventually comes up with. This will operate as a ratcheting mechanism, increasing the workers guaranteed hours over time until they reach the threshold.

So depending on where the Government sets that threshold, the right to guaranteed hours could either be a token right of no real significance, or the most fundamental shift in the regulation of working time since the Factories Acts of the nineteenth century. I for one am quite curious as to where on that spectrum the Government will eventually land. 

The issue was debated in the Commons Committee stage on 3 December. In response to a probing amendment from the opposition suggesting a 2-hour threshold, the Minister Justin Madders referred to the retail sector and said:  

People who work in that sector can be on guaranteed hours of 16 hours a week but still face insecurity. Equally, a lot of the people that we are trying to help here have no guaranteed hours at all. There is an argument that anyone below full-time hours—again, there is a debate about what that means—could be within scope. (Column 198)

He stressed that this was all a matter for consultation, but it seems that at this stage at least the Government does not intend the right to guaranteed hours to provide a token entitlement to a minimum number of hours work per week. The threshold is likely to be set at a significant number.

That raises a further issue that the Government will need to consider. Regulations will set out the criteria to be met in order to trigger an offer of guaranteed hours. This will not, I assume, simply be an average of the hours they have worked in the reference period. The right is aimed at workers who regularly work in excess of their guaranteed hours. It would be completely unworkable if one busy week involving 40 additional hours of work required the employer to increase the guaranteed weekly hours as a result. Rather, the criteria set out by Government will deal not just with the number of hours worked but also the regularity with which they are worked. For example, they could provide that the worker must work more than five hours above their contracted hours in at least seven weeks out of the twelve-week reference period. 

But how can the Government prevent this from merely setting a limit on the number of hours an employer will offer a worker? Whatever threshold is set, wouldn’t this incentivise the employer to say ‘uh-oh, this employee is getting close to the limit, we’d better avoid offering any additional work until the next reference period starts’? Will the new right have the perverse effect of limiting the work offered to those on insecure work? 

It may be that Government would regard employers being deterred from offering additional hours to some employees as a fair price to pay for the general increase in the security and predictability of work that the new right would bring. There are always trade-offs.  But it does look as though current Government thinking is that the right to guaranteed hours is going to be a significant new provision that goes well beyond merely tackling ‘exploitative’ zero-hours contracts. If that is so, then its impact will be complex and hard to predict. 

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Employment Rights Bill – increasing time limits for tribunal claims

Posted on November 28, 2024 by Darren Newman

The Employment Rights Bill is about to reach the stage when the Commons Committee considers proposed amendents. Some of these are proposed by the opposition but I don’t think we need to spend too much time on them. They are proposed for the purposes of prompting debate but will almost always be withdrawn without a vote. In some cases the Government may accept that a particular member has a point, but usually that means them undertaking to present a properly drafted amendment of their own at the Report Stage. 

What we need to be on the lookout for are Government amendments. These will almost certainly be passed and they show the development of Government thinking as the Bill progresses. Many of them are purely technical – fixing typos or tying up loose ends. Other are mote substantive and can even introduce completely new measures. 

This week the Government has tabled a huge raft of amendments (Government amendments are the ones proposed by Justin Madders, Minister at the Department of Business and Trade). A good number deal with the right to guaranteed hours – making it even more complex. I am starting to think that the Government might be in trouble with this provision. It is simply too complicated to be workable. It leaves a great deal to be sorted out in later Regulations, but as the Employment Lawyers Association says in its written evidence to the committee secondary legislation does not tend to simplify primary legislation. Might we see a re-think as the Bill progresses?

One completely new reform inserted by these amendments is an extension of the limitation period for bringing an employment Tribunal claim from three months to six. This is a significant change – doubling the time that an employee has to decide whether or not to bring a claim against their employer. 

There was no mention of this when the Bill was published – although Labour’s policy document ‘Make Work Pay’ did indicate that it was something the new Government would do. I suspect that the reason it was not in the original bill is that the change takes a lot of detailed drafting – changing the word ‘three’ to ‘six’ in (I counted) 115 different places. These range from the obvious claims in the Employment Rights Act 1996 to the rather more obscure Fishing Vessels (Working Time: Sea-fishermen) Regulations 2004. I suspect it has taken until now to complete the list of measures affected. 

I think this change has to be welcomed – although employers may well regard it as one more way in which the balance of employment law is being tilted away from them. The fact is that a three-month time limit for what might be a significant legal claim is absurdly low. It made sense when many employment rights were introduced in the 1970s and it was assumed that a case would be heard within a few weeks of it being brought. But with many claimants waiting more than a year to get to a full hearing, the need to put a claim in within a three-month is hard to justify. The Law Commission recommended this change back in April 2020 so the idea has not simply been plucked from the air.

Will the impact be more claims or fewer? There is an argument that giving people six months before having to make a claim gives claimants longer to seek a resolution to their dispute rather than being hurried into issuing Tribunal proceedings. My view is that this effect will be outweighed by the people who are no longer prevented from bringing a claim in time because it takes too long to organise legal advice or because they were seeking an internal resolution first. A victim of harassment for example might well seek to resolve matters internally through the employer’s grievance process and not think of making a claim until that is exhausted. In many cases it is then already too late. There will, I think, be more claims as a result of this change.

Of course, there are circumstances in which the time limit for bringing a claim can be extended. The pursuit of Acas early conciliation can typically put the deadline back by a month or so (its complicated, don’t ask). The Tribunal may also choose to extend the deadline. In a discrimination or harassment claim they can do this when they consider that it would be ‘just and equitable to do so’. In an unfair dismissal claim (among others) they can do so only when it was not reasonably practicable for the claim to have been brough within the time limit. That is a much stricter test and in 2020 the Law Commission – in addition to recommending an increase in the time limits to six months – recommended that all Tribunal claims should be subject to the ’just and equitable’ test for an extension. There is no sign of the Government moving in that direction yet – but there is still time for more amendments to be tabled

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Defining ‘sex’ in the Equality Act

Posted on November 25, 2024 by Darren Newman

[Added: April 2025
Well the Supreme Court Decision is out and they have allowed the appeal and ruled that for the purposes of the Equality Act 2010, sex is determined biologically and not be reference to a Gender Recognition Certificate. I’m not a fan of the decision but we are where we are. I have written about what the Supreme Court held and why here: https://hrcentre.uk.brightmine.com/commentary-and-insights/the-definition-of-a-woman-the-legal-meaning-and-practical-implications-of-the-supreme-court-ruling/167641/]

This week the Supreme Court will hear the case of For Women Scotland Ltd v The Scottish Ministers. FWS (a campaigning organisation) are arguing that statutory guidance issued by the Scottish Government about the effect of the Gender Representation on Public Boards (Scotland) Act 2018 is unlawful. The guidance says that a woman includes someone born male but who now has a gender recognition certificate describing them as female. 

The case is not really about the 2018 Act, which only applies in Scotland. It is really about the meaning of ‘male’ and ‘female’ in the Equality Act 2010. This is because the 2018 Act was originally held to have gone beyond the powers of the Scottish Government by specifying that all trans women were women. This adopted a definition of the protected characteristic of sex that went beyond the Equality Act 2010 in which sex and gender reassignment are treated separately. As a result of that case the Scottish Government issued new guidance saying that woman had the meaning given to it by the Equality Act, but went on to say:

In addition, in terms of section 9(1) of the Gender Recognition Act 2004, where a full gender recognition certificate has been issued to a person that their acquired gender is female, the person’s sex is that of a woman, and where a full gender recognition certificate has been issued to a person that their acquired gender is male, the person’s sex becomes that of a man.

FWS are now challenging this part of the guidance arguing that it is incorrect. Their application to have it struck down was rejected by the Court of Session and will now be heard by the Supreme Court.

So the question is this: when The Equality Act 2010 refers to sex – to the question of whether someone is male or female – is it limited to biological sex or does it also refer to someone with a gender recognition certificate (GRC)? In other words, is a trans woman with a GRC treated as being of the same sex as someone who is biologically female? 

The argument that the Scottish Government’s guidance is right to say that she is has the advantage of being short and straightforward. S.9(1) of the Gender Recognition Act 2004 says:

Where a full gender recognition certificate is issued to a person, the person’s gender becomes for all purposes the acquired gender (so that, if the acquired gender is the male gender, the person’s sex becomes that of a man and, if it is the female gender, the person’s sex becomes that of a woman).

(emphasis added)

S.9(3) of the Act says that this provision is subject to provisions made in any other enactment, so the Equality Act 2010 could have expressly disapplied it – but did not. On that basis, the argument goes, the concept of sex in the Equality Act encompasses both the sex into which someone is born and also the sex that they are deemed to be once they have a GRC.

The arguments against this interpretation are long and complex. That doesn’t mean that they will fail. The Supreme Court would not have agreed to hear the case if they thought there was no point worth arguing. FWS has very helpfully made its written case publicly available. They don’t need to do this so it would be churlish to complain about the font it is written in or the extent to which it uses italics (less is more guys) – but reading it did make my head swim a bit.  It sets out a number of problems contradictions and anomalies that it says result from including individuals with a GRC as being members of the sex aligned with their gender identity.

I have to say that the problems that are relied on in the written case seem rather abstract and theoretical to me. I struggle to see how treating a trans woman with a GRC as a woman for the purposes of the Equality Act 2010 presents any real practical difficulty. 

Take direct discrimination for example. This depends not on the identity of the victim but the reason for the treatment complained of. It is direct sex discrimination to treat someone less favourably because they are a woman or because they are not a woman. But the Tribunal only has to decide what was going on in the mind of the discriminator. Whether the victim is actually a woman or not (and by what criteria you judge that question) doesn’t matter. The same goes for harassment. If there is unwanted conduct ‘related to’ the protected characteristic of sex or conduct of a sexual nature then that is enough if the conduct has the required effect on the victim. There is no need for a tribunal to decide whether or not someone with a GRC is either a woman or a man – the question does not arise. 

Indirect discrimination is slightly different. There we are looking at an unjustifiable ‘provision criterion or practice’ which places people who share a protected characteristic at a particular disadvantage. The question could arise as to whether a trans woman with a GRC shares the characteristic of being a woman with those who were born female. But it is hard to envisage a circumstance where the issue of whether such trans women should be counted as women would make a difference to the outcome. In their written submissions FWS argue:

For example, height requirements (such as used to be imposed for service in the police) would be likely to place women at a particular disadvantage. However, when men are included within the definition of woman, the nature of any actual disadvantage will inevitably be reduced (page 19)

The fact that the best example they can come up with is a condition that is no longer used is telling I think. But even if that requirement were still in effect I very much doubt that the whole population of trans women with a GRC would be sufficient to skew the statistics to the extent that women would no longer be disproportionately disadvantaged by a height requirement. 

Equal Pay raises an interesting question. To claim Equal Pay an employee must identify a comparator of ‘the opposite sex’. Suppose a trans woman with a GRC is paid less than a man. As I understand the FWS argument, she should not be able to claim equal pay because her male comparator would not be of the opposite sex. I have to say that the idea that a trans woman would be prevented from claiming in such circumstances strikes me as wrong. Surely if she has a GRC she should be accepted as being of the opposite sex of her male comparator? It is true that this means that a trans man with a GRC could not claim equal pay citing a man as a comparator – but would a trans man even want to bring such a claim?

What about occupational requirements? Part 1 of Schedule 9 of the Equality Act allows an employer to insist that a job should be done by a woman in circumstances where the nature or context of the work makes it an occupational requirement – and insisting on recruiting a woman is a proportionate means of achieving a legitimate aim. Suppose a man sought to challenge the employer’s use of that exception and argued that because a trans woman was given one of the available roles that meant that ‘being a woman’ was not really an occupational requirement? In theory I suppose the question of whether trans women counted as women under the Equality Act would then arise – but I really can’t see any Tribunal getting tangled up in that. Surely they would just say that irrespective of the legal definition of a woman, the employment of a trans woman in a role does not on its own show that being a woman is not an occupational requirement?

It would then follow that a trans man with a GRC could be lawfully excluded from a role reserved for women – but I’m not sure who would really find that objectionable. Imagine a trans man who has gone to the trouble of obtaining a GRC trying to get a job reserved exclusively for women and suing for sex discrimination when he is turned down. It just seems incredibly unlikely. The same principle would hold for shortlists for political parties or other forms of permitted positive action. 

Note that the Equality Act does allow an occupational requirement to exclude trans people when it is a proportionate means of achieving a legitimate aim to do so (Schedule 9, para 3). So if the employer thought that a job could only be done by a woman but could not be done by a trans woman and could justify that choice then that too could be lawful. Defining trans women as women would not make a difference to that argument.

The same is true for the provisions relating to single sex accommodation and facilities. These can be reserved for women but does that mean that such services must not exclude trans women with a GRC? The Court of Session pointed to provisions which allow discrimination based on gender reassignment in such services where that is a proportionate means of achieving a legitimate aim. FWS argue in their written case that the Court was wrong about that and that employers or service providers would not be able to make that distinction– but I have to admit that I can’t quite follow their argument. It’s at page 40 of their written case so have a look for yourself and see what you think. 

[Edit: I’ve just had another look at this and I think I get it now! – see the PS at the end of the post]

I do see a potential issue with the rules on associations. Schedule 16 of the Equality Act allows for associations to be restricted to people who share a protected characteristic. So a lesbian support group could lawfully exclude people who were not lesbians. FWS argues that a trans woman with a GRC who is attracted to women would have to be accepted as a lesbian if the Equality Act treated her as a woman. I think that is probably right – there is no exception in the Act allowing for gender-reassignment discrimination in such a case. But is that position obviously objectionable? I do not want to speak for others but I suspect that there may be disagreement among lesbians as to whether a trans woman attracted to women should be regarded as a lesbian or not.  I also very much doubt that the Supreme Court will want to be drawn into ruling on the legal definition of a lesbian.  

One issue that was relied on in the Court of Session relates to maternity discrimination. Section 18 of the Equality Act says that “a person discriminates against a woman if… in relation to a pregnancy of hers” the person treats her unfavourably (emphasis mine – obviously). This section (and the similarly worded S.17 which deals with non-work cases) clearly refers to the claimant as being a woman. But what if a trans man had a GRC and was pregnant? If the guidance issued by the Scottish Ministers is right, he would be a man rather than a woman and so, the argument goes, unable to claim pregnancy discrimination.

I want you to imagine the look on the Employment Judge’s face as you explain that your employer client was not guilty of pregnancy discrimination because the employee they dismissed for being pregnant had a gender recognition certificate which meant that they were not a woman and therefore barred from claiming. In its written case FWS says that this argument would have to succeed (pages 34/35). The Court of Session disagreed. with that reasoning, saying that what matters in that scenario is the fact of the pregnancy and the use of the term ‘woman’ in that context could be given a purposive interpretation so that a trans man with a GRC could still claim. My instinct is that the Court of Session is right about that. But in any event I suspect the Supreme Court would not want to make a definitive ruling on such a hypothetical case. 

And that, I think, may be a key point. We should remember that this case is about statutory guidance given by the Scottish Government about a Scottish Act dealing with gender representation on public boards. I struggle to see the Supreme Court being keen to engage in a lengthy legal analysis of hypothetical discrimination claims – unlikely to arise in practice – in order to decide whether that guidance is accurate or not. I think the most straightforward approach is to say that the guidance is lawful – because it is in accordance with the clear wording of the Gender Recognition Act and that although Parliament could have qualified that wording in the Equality Act it chose chose not to do so. If that means that there are some potentially difficult cases that may then arise in the interpretation of the Equality Act then we can wait for an actual case to crop up in real life before deciding the point.  

One of the really great things about the Supreme Court is that cases are livestreamed. I will certainly be watching (here) and it may be possible to get a sense of what the Court thinks as the arguments play out. It is also perfectly possible that as the argument unfolds I will realise that I have missed a key point that could affect the outcome.  If that happens I’ll write a postscript below.

Postscipt

As I mention above, in response to a comment below I have had another think about the issue of gender reassignment discrimination in relation to service provision.

Suppose a service provider objects to providing intimate care to a trans woman with a GRC. Could they object to doing so on the grounds of gender reassignment? Under paragraph 28(1) of Schedule 3 of the Equality Act they would have to argue that doing so is a proportionate means of achieving a legitimate aim. But their actions would have to relate to one of the following ‘matters’

(a)the provision of separate services for persons of each sex;

(b)the provision of separate services differently for persons of each sex;

(c)the provision of a service only to persons of one sex.

I think that FWS must be arguing that since the trans woman with a GRC would be deemed to be a woman, the service provider could not claim that refusing to serve her was something done in relation to the provision of a service only to persons of one sex.

I accept that there is something to that. But it is surely it would at least be arguable – if such a case arose – that the conduct at related to the provision of same sex services? It certainly does in the mind of the service provider. I am sure that any lawyer representing a service provider in such a case would mount a spirited argument to that effect. FWS, however, regards such an argument as completely impossible – which seems rather defeatist. On balance I don’t think this changes my overall view that the Supreme Court is unlikely to want to get entangled in ruling on such hypothetical cases – but we shall see.

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Fire and Rehire – Unintended Consequences of the Employment Rights Bill

Posted on November 15, 2024 by Darren Newman

The Employment Rights Bill is about to enter into the part of the Parliamentary process where the Government will consider amendments. This is not something it needs to do in order to ensure the Bill is passed. With a huge majority the Government does not need to worry about political opposition. Anyone who wants to advocate for a particular amendment needs to persuade the Government that it is genuinely a good idea. And there is no point in arguing against the grain of the Bill itself. You might think that abolishing the qualifying period for unfair dismissal is the wrong thing to do or that the Trade Union Act 2016 made a number of sensible reforms that should be kept in place. But there is no point in advocating for such positions – those ships have sailed. 

But there may be areas where the Government could be persuaded that the Bill as currently drafted will not achieve its aims or will have ‘unintended consequences’. Those two words are very powerful. If you want a Government to change course you need to give it a ladder to climb down and ‘unintended consequences’ do just that. The policy is right, the Government will say, but the current draft runs the risk that there will be unintended consequences that will undermine that policy and so a change needs to be made. 

As it happens, I think I have a genuine example of unintended consequences that merit an amendment to the provisions on fire and rehire. I’ve written about those provisions already, but in brief the Bill will make it automatically unfair to dismiss someone for refusing to agree to new terms and conditions or in order to replace them with someone (or rehire the same person) doing substantially the same work but on different terms. 

In the policy paper ‘Labour’s Plan to Make Work Pay’ we read this:

It is important that businesses can restructure to remain viable, to preserve their workforce and the company when there is genuinely no alternative, but this must follow a proper process based on dialogue and common understanding between employers and workers. 

So how is that policy translated into the Bill? An exception is created (see page 33, line 11 of the Bill) if:

the reason for the variation was to eliminate, prevent or significantly reduce, or significantly mitigate the effect of, any financial difficulties which at the time of the dismissal were affecting, or were likely in the immediate future to affect, the employer’s ability to carry on the business as a going concern or otherwise to carry on the activities constituting the business, and 

in all the circumstances the employer could not reasonably have avoided the need to make the variation.

I argued in my previous post that this was a very narrow exception. Having spoken to many employers since about the circumstances in which they may need to seek a variation of contract I think it is clear that the exception is simply too narrow. Consider these scenarios:

  • an employer is a contractor providing after-school activities to a local authority. When the contract comes up for renewal the contractor is told that under the new contract those activities will be required at other times of the day including mornings and lunchtimes.
  • an employer is providing support services running Monday-Friday and the client informs them that this needs to change so that the services are also available at weekends
  • an employer undertakes a new contract handling personal data which for security reasons cannot be accessed by employees working at home so that those working remotely will have to come into the office to work
  • A manufacturing firm invests in new machinery that will increase productivity but only if shift patterns are changed so that the plant runs seven days a week rather than five.  

You get the point. In all of these cases the employer would have a strong case for seeking changes to contractual terms. Not necessarily to make them worse, but changing the provisions on working time or location to meet the new requirements of the business. But none of these reasons for seeking the employee’s agreement to a variation would meet the test of ‘financial difficulties’ that would ‘in the immediate future’ affect the employer’s ability to operate as a going concern. 

You might look at those scenarios and think of alternative ways in which the employer could achieve its objectives. But suppose there was no realistic alternative? The Bill as currently drafted would make it automatically unfair to dismiss any employees who did not agree to the change. What is a law-abiding employer to do in those circumstances? Would a contractor have to just lose the contract and make employees redundant? That would not be straightforward as a new contractor would probably inherit the employees under TUPE – on their current terms and conditions – and face exactly the same problem. Would the manufacturer simply have to make do with its current machinery and not seek to improve productivity?

These are the unintended consequences of confining the exception to cases of ‘financial difficulties’. A sensible amendment would be to add ‘technical or organisational reasons’ to the exception. 

An amendment along these lines would not undermine the overall impact of the new right. Dismissal would still only be lawful when the employer ‘could not reasonably have avoided’ the need to make the variation. This test is significantly more restrictive than the current test of reasonableness in unfair dismissal cases. The Bill would still contain provisions saying that even if the exception is met the Tribunal must consider the extent to which employee representatives were consulted about the change and what the employer was offering the employee in return for agreeing to the change (page 33, lines 25-40). 

Even with the change that I am suggesting the provisions on fire and rehire will amount to a significant new right that will prevent employers from forcing through a change in terms and conditions except in cases where there there is no realistic alternative. Limiting the exception to financial difficulties will result in severe unintended consequences that I think the Government will ultimately want to avoid.  

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The Employment Rights Bill – Closing the ‘Woolworths’ Loophole

Posted on October 21, 2024 by Darren Newman

In my last post I was trying to make sense of 11 pages of densely-worded text in the Employment Rights Bill. For this post I have set myself the easier task of explaining the implications of removing just three words from the law on collective redundancy consultation. 

Clause 23 of the Bill removes the words ‘at one establishment’ from S.188 of the Trade Union Reform and Employment Rights (Consolidation) Act 1992. To understand why this is important we need to look at what S.188 does. 

Section 188 of the 1992 Act provides that when an employer is engaging in a large-scale redundancy exercise, it must first consult with a trade union or other employee representatives with a view to reaching an agreement about ways to avoid, reduce or mitigate the effect of the redundancies that are being proposed. The consultation must start at least 30 days before the first dismissal takes effect – or 45 days where 100 or more dismissals are proposed. A failure to consult in accordance with the statutory requirements may result in those employees who are dismissed being given a ‘protective award’ of up to 90 days’ pay. That award is quite separate from any compensation for unfair dismissal and is intended to be punitive. Employees who have lost nothing at all as a result of being dismissed – who have walked straight into a better paying job and pocketed a redundancy payment – will still be entitled to a protective award if the employer has failed to consult. 

The duty to consult is (currently) triggered by the employer proposing to dismiss as redundant 20 or more employees at one establishment over a period of 90 days or less. Over the years, the courts have had some trouble with the concept of an ‘establishment’. The word is taken from the EU Collective Redundancy Directive which we obviously no longer need to worry about, but it has always been a niggling problem that there isn’t a clear definition of what an establishment is. 

The amendment made by the Employment Rights Bill is prompted by the closure of Woolworths in 2011. The collective consultation procedures were held not to have been followed but not all of the employees were given a protective award. About 4,500 of them missed out because they worked in branches of Woolworths that had fewer than 20 employees. It was held that each branch was an establishment in its own right and so the duty to consult only applied where 20 or more employees were being dismissed from a particular branch. You can see why many people would regard that as an unsatisfactory result. 

The effect of the Employment Rights Bill in removing the words ‘at one establishment’ will be that future closures of multi-site businesses will require consultation whenever the total number of redundancies across the whole business reaches 20 or more over a 90-day period. That would mean that in a future ‘Woolworths’ case all of the affected employees would be included in the consultation, not just those employed at sites of 20 or more.  To that extent we might regard the change as merely closing a loophole. But there are also unintended consequences that large-scale employers are going to struggle with. 

Imagine a nationwide company with sites across the UK. It proposes to restructure the sales team in its Southampton branch with the result that there will be 12 redundancies. The employer will have to behave reasonably in selecting the employees to be dismissed and will have to engage in a consultation process to avoid any findings of unfair dismissal – but the specific duties under S.188 will not apply because the total number of redundancies is less than 20. If at around the same time the company is merging two offices in Wales with the loss of a further 7 jobs then the nothing changes as the threshold will still not have been reached. But if the Aberdeen office then decides to reduce the number of its admin staff then the employer will find that it is proposing to dismiss 20 or more employees. If the dismissals are spread over a period of no more than 90 days then the duty to consult will apply. 

The problem for the employer is that each location is engaged in a completely separate redundancy exercise that may not be coordinated in any way. Does it have to carry out one single consultation exercise or can it carry out three separate ones? What if the 20 employee threshold is only triggered by the last proposal and some dismissals have already taken effect? Does that mean that all the dismissed employees will be entitled to a protective award? Section188(3) says that where consultation has already started in respect of some employees then their numbers are not treated as part of the total. But if the initial proposal was for just 12 redundancies then collective consultation would not have started.  So as a result of an office reorganisation in Aberdeen the employer may find that it has already acted unlawfully. Is that fair? 

These issues could in theory arise under the current law but only if the employer is conducting a series of uncoordinated redundancy exercises at the same establishment. But once redundancies can be aggregated across different establishments in different parts of a business and spread over the whole country, then these are certainly questions that many large employers will need to consider. Some of the case law that follows might lead to some surprising results. 

My suggestion would be an amendment providing that genuinely separate redundancy exercises – not driven by a common underlying business reason – should not be aggregated in this way. The Woolworths loophole would still be closed, but employers would not be caught by surprise when a series of separate redundancy exercises happened to occur within the same 90-day period. 

On the other hand, the Government might well believe that nudging employers towards consultation is a good thing. One consequence of the removal of the ‘at one establishment’ requirement is that large employers may feel obliged to engage in formal collective consultation when they are proposing fewer than 20 redundancies – just in case further redundancies occur elsewhere in the business. I don’t think this Government would see that as a bad outcome.

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