Employment legal update #66 | November 2023

1. Code of Practice on Flexible Working

Acas has launched a consultation on updates to its Code of Practice on Flexible Working. The new draft Code reflects both significant shifts in the ways of working since the current Code was published, and anticipated changes to the law. The Employment Relations (Flexible Working) Act, expected to come into force next year (see below), will make changes to the statutory process for making a flexible working request, including making it a ‘day one’ right.

2. Shared parental leave

A report has been published analysing the extent to which shared parental leave (SPL) has achieved its original objectives. Take-up remains very low with only 1% of employee mothers and 5% of employee fathers or partners taking SPL following the birth or adoption of their child. Take up varies: it is high for fathers and partners in central government organisations, predominantly female workplaces and organisations with a trade union presence. Parents taking up SPL and ShPP are more likely to be older, white, highly qualified, working in large organisations, on a high income, and have progressive gender role attitudes compared to those who do not take these up.

3. Statement of Changes to the immigration rules

The government has published its Statement of Changes to the immigration rules, which were implemented from 17 July 2023 onwards. Key points are:

• From September 2023, the holders of “pre-settled status” under the EU Settlement Scheme will automatically have their leave extended by two years, without the need for them to apply to extend.
• The Home Office will attempt to grant them settled status automatically after five years of continuous residence in the UK if it can determine from the records available to it that the requirements are met.
• Addition of some jobs in the construction and fishing industries to the shortage occupation list.
• Removal of the right for international students attending courses starting on or after 1 January 2024, to bring dependants to the UK unless they are on postgraduate courses currently designated as research programmes.
• Removal of the ability for international students to switch out of the student route into work routes and start work before completing their studies.

4. The Employment Relations (Flexible Working) Act

The Employment Relations (Flexible Working) Act has received Royal assent but is not expected to come into force until July 2024. It changes key requirements of the right to request flexible working and the main changes are as follows:

• Employees will now be able to make two flexible working requests within any 12-month period (an increase from 1 per year now).
• Employers will have to deal with flexible working requests within 2 months (currently 3 months) of receiving them unless there is a mutually agreed extension. This change will ensure that requests are handled promptly, and employees receive a timely response.
• Employers will no longer be able to refuse a request outright without having first consulted with the employee. However, there is no specified minimum requirement for this consultation process, leaving it open to interpretation by employers.
• Employees will no longer be required to explain how their flexible working request may impact their employer or propose how any potential issues arising will be addressed. This change reduces the burden on employees when submitting their requests and leaves it up to employers to manage the change within the working environment accordingly.

Worker status

In Plastic Omnium Automotive Ltd v Horton the EAT looked at the constituent parts of the requirements for someone to be a worker (as opposed to an employee or self-employed) and held that an individual who provided services via a service company was not a worker under the relevant section of the Employment Rights Act. The tribunal had found that the individual was not an employee, but a worker. The putative employer argued that he was neither.

There was a written contract between the claimant’s service companies and Plastic Omnium for the provision of the claimant’s services to it. There was no provision for a substitute. The claimant provided services under these successive agreements to Plastic Omnium for over eight years, during the entirety of which he was fully integrated into the business.

The individual was a program manager and treated much the same as other programme managers who were directly employed. He had a company laptop, access to the company premises, attending training days alongside the company employees and had the same level of autonomy whilst providing services as directed by the company. Plastic Omnium had at one point asked if he would become an employee and be directly employed but he had refused. Periodically the parties had reviewed the agreement and there was no suggestion that it did not accurately reflect the position in practice.

The claimant alleged that he was an employee, or alternatively a worker, of Plastic Omnium, and thus entitled to holiday pay. An employment tribunal found that the written agreement reflected the true agreement between the parties and held that the claimant was not an employee. However, the tribunal held that he was a worker, having identified that the issue was whether Plastic Omnium was a client or customer of the claimant’s service companies and concluded that he was “clearly subordinate and dependent”. Plastic Omnium appealed.

The statutory definition of a worker is:

• There must be a contract between the worker and the putative employer, whether express or implied.
• The contract must require personal service.
• The other party to the contract is not the customer or client of any business undertaking or profession carried on by the individual.

The EAT held that the tribunal had not looked at the crux of this case which was that the contract was not between the claimant and the putative employer, Plastic Omnium, but was between the service companies and Plastic Omnium. While whether Plastic Omnium was a client or customer of the claimant’s business was relevant, this should be determined after the contractual issue was addressed.

Since the tribunal had found that the contract was between the claimant’s service companies and Plastic Omnium, and reflected the parties’ true agreement, the EAT concluded that there was only one legally correct outcome; and allowed the appeal, substituting a finding that the claimant was not a worker.

Substantial award for gender critical discrimination

The case of Forstater v CGD Europe and others came before the tribunal for a remedies hearing following a finding of liability in a separate liability hearing. The claimant was found to have suffered direct discrimination on the grounds of belief when her Visiting Fellowship was not renewed, and she was not offered an employment contract because she had expressed gender critical beliefs which some colleagues found offensive. The case had also come before the EAT to determine whether her gender critical beliefs were a philosophical belief under the Equality Act and the EAT had decided that they were.  In total she was awarded over £100,000 in compensation. This comprised the following:

• A finding that the case was at the top of the Vento middle guidelines band for injury to feelings because the discriminatory acts demonstrated that the respondents did not want to be associated with her and this affected her status, both internally and in the wider professional world. She was awarded £25,000 for injury to feelings.
• £2,000 for aggravated damages as a result of public statements made on behalf of the respondents which were found to be oppressive and amount to high-handed conduct.
• £14,000 for loss of earnings as a result of the non-renewal of her Visiting Fellowship.
• £50,000 for the loss of a chance of being offered, and accepting, employment and a loss of earning capacity.
• Interest in the amount of £14,778.47.

Total compensation awarded was £105,778.47. The award was not grossed up as the claimant was not an employee for the purposes of IT(EP)A.

Employer’s belief that employee working whilst off sick could be “something arising” in consequence of a disability

Pilkington UK Ltd v Jones is an EAT decision on whether or not the employer’s belief about activities being carried out by the employee whilst signed off sick resulting in detrimental treatment, could be something arising in consequence of a disability for the purpose of the Equality Act.

The employee developed a shoulder condition sufficiently serious to permanently prevent him from undertaking manual work, which was his job. He was signed off sick until such time as he had recovered sufficiently to undertake a non-manual role. Whilst he was off sick it came to the employer’s attention that he appeared to be engaging in physical activities with a farmer friend of his, and private surveillance showed that he was handling sacks of potatoes. The employer, believing him to be engaged in secondary employment when he was off sick, sacked him for gross misconduct and he brought a claim for disability discrimination under the Equality Act on the basis that he had been unfairly treated because of something arising in consequence of his disability (the employer’s belief that he had been undertaking physical activity while signed off sick). The tribunal found in his favour and the employer appealed to the EAT.

The EAT dismissed the appeal, commenting that there are two aspects of causation under the relevant section of the Equality Act. Firstly, something arising from the disability, which required an objective analysis; and secondly, a consequential treatment that is unfavourable, which requires a subjective consideration. Following analysis, the EAT determined that the tribunal had found that he had been sacked substantially because of his sickness absence and the employer’s erroneous belief about his disability, which satisfied the requirements of the Equality Act.