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Out with the old, in with the new?
The Labour Party’s “New Deal for Working People” was originally announced in 2021, with promises to introduce day one rights for all workers, end fire and rehire, and ban zero hours contracts. “Delivering A New Deal for Working People”, published at the end of May, gives a clearer idea of what a Labour government might mean for worker rights.
- Labour is still committed to introducing legislation within 100 days of taking office. However, it would conduct a full and comprehensive consultation process, which implies that legislation may be amended as it goes through Parliament. In particular, a Labour government would “consult in detail” on whether to remove the existing distinction between workers and employees.
- “Exploitative” zero-hours contracts would be banned and workers would have the right to a contract that reflects their average working hours over a twelve-week reference period, as well as reasonable notice of and compensation for changes to shifts or working time.
- Proposals on “fire and re-hire” appear to have been watered down. Businesses should be able to restructure where this is necessary to remain viable. Labour would provide effective remedies for abuse of “fire and re-hire” and strengthen the existing code of practice.
- Basic individual employment protections would become “day one” rights. However, probationary periods with fair and transparent rules and processes would be permitted. This suggests there may still be scope to dismiss short serving employees for performance related reasons without following lengthy processes, even if unfair dismissal becomes a day one right. Time limits for bringing tribunal claims to enforce individual rights would be increased from three to six months.
- Collective redundancy consultation obligations would be extended, with the removal of the requirement for redundancies to be at “one establishment” before consultation is triggered.
- The existing parental leave framework would be reviewed within a year. There would be additional protections for women after they return to work after maternity leave, a right to bereavement leave for all workers and paid carer’s leave could be introduced.
- Restrictions on the right to take industrial action would be repealed, including the requirement for minimum voting thresholds, and statutory recognition procedures would be simplified, including reducing the thresholds for recognition. Unions would have a right to access workplaces to recruit and organise.
- On the diversity front, it would be compulsory to produce action plans to close gender pay gaps, outsourced workers would be included in their client’s gender pay gap reporting and ethnicity and disability pay reporting would be mandatory.
Next steps
- Monitor announcements from the other political parties about their employment policies for the election.
- Prepare to engage in consultation about employment law reform after the general election, depending on the outcome.
- Businesses that rely heavily on zero-hours contracts may want to begin considering how their model would adapt to a “right to demand” fixed hours, as opposed to a “right to request”.
Enhanced paternity leave
As we reported last month, the Paternity Leave (Bereavement) Bill removes the qualifying service requirement for parents to be able to take paternity leave if a child’s mother or primary adopter dies. Employees in that situation will be able to take paternity leave even if they do not have the necessary qualifying service with their employer. They will also be able to take paternity leave after a period of shared parental leave, which is normally not permitted.
During the Bill’s third reading in the House of Commons, its sponsoring MP, Chris Elmore, confirmed bereaved fathers/ partners will be able to take up to 52 weeks’ leave during the first year of a child’s life, to allow them to be their child’s primary caregiver. Surviving adoptive and surrogate parents will have the same right. Employees exercising the right to extended paternity leave following a bereavement will have enhanced protection against redundancy and be able to take keeping in touch days.
As the Bill had cross-party support, it completed its passage before the dissolution of Parliament and received Royal Assent.
Next steps
- The Paternity Leave (Bereavement) Act will come into force at a later date; regulations will be needed to give effect to the enhanced paternity leave right.
- Employers may choose to amend their paternity leave policies to provide specifically for bereaved parents before the law comes into force.
Outsourced workers could not compare themselves with client’s employees
In Boohene v The Royal Parks Ltd the Court of Appeal overturned an earlier EAT decision that allowed outsourced workers to compare themselves with the client’s own employees for the purposes of a indirect race discrimination claim.
The Royal Parks had its own employees, who received pay of at least the London living wage as matter of policy. Day-to-day park operations, such as cleaning and maintenance, were outsourced. The Royal Parks did not require its contractors to pay their employees the London living wage. Employees on one such contract argued that this amounted to indirect race discrimination, as outsourced workers were more likely to be of black or minority ethnic origin.
Under s41 of the Equality Act, a principal must not discriminate against a contract worker “as to the terms on which the principal allows the worker to do the work”. The EAT found that s41 applied in this case. The Royal Parks effectively dictated the terms on which the contract workers were employed because it had chosen a non-London living wage tender.
The Court of Appeal upheld the Royal Parks’ appeal. Section 41 distinguishes between detriments which are the result of the terms of the worker’s contract of employment, which are a matter for the employer, and detriments imposed by the principal, such as the denial of benefits or services such as access to a canteen. On a proper analysis, this meant that complaints about contractual matters such as pay could only be brought against a worker’s employer, not the client in an outsourcing relationship.
Next steps
- The EAT decision allowed outsourced workers to compare themselves with the client’s employees for the purposes of discrimination claims, at least in some circumstances. That prospect has now receded, at least for the time being.
- Labour’s “New deal” proposals indicate that this may change in future in relation to equal pay claims. The document says “outsourcing of services can no longer be used by employers to avoid paying equal pay”.
- Although this commitment appears to apply to sex-based pay discrimination, press reports have suggested that Labour would extend the existing equal pay model to other protected characteristics. It is not clear if that represents official policy.
Discrimination claims and individual respondents
Under the Equality Act, an employer is vicariously liable for acts of discrimination committed by its employees, unless it can establish that it took all reasonable steps to prevent the discrimination. Employees can also be personally liable for such acts and it is common for claimants to bring proceedings against both an employer and individual employees. In Baldwin v Cleves School, the EAT had to decide whether a tribunal can decide not to uphold claims against individual employees if it finds an employer vicariously liable for their discriminatory acts.
Miss Baldwin was a newly qualified teacher (NQT) with a disability. During her NQT induction year, the tribunal found that there were two incidents of discrimination. The first related to attempts by her mentor to gather information about her medical condition from her PGCE tutor. The second related to a comment in an assessment from the school’s headteacher that Miss Baldwin lacked integrity, which was connected to the way in which she had reacted to the enquiries about her medical condition and was not supported by evidence.
Although the tribunal upheld the claims against the school, it rejected claims against the mentor and the headteacher. It found that although they had acted misguidedly, and in a way that amounted to discrimination, they were attempting to deal with a complex situation informally, in the belief that this would be the best way to achieve a successful outcome. Their main failing was not seeking HR support sooner.
The claimant successfully appealed to the EAT. Under the Equality Act, tribunals do not have a discretion about whether to uphold claims against individual respondents if their employer is vicariously liable for their actions. Individual liability is not ancillary to that of the employer and tribunals cannot simply choose not to find against individuals if the claims against them are made out. The EAT upheld the claims against the individual respondents as well as the employer.
Next steps
- The decision illustrates that motive is irrelevant in a discrimination claim. The tribunal clearly had some sympathy for the situation in which the employees found themselves, but that was not a reason to reject the claims against them.
- If a tribunal finds more than one respondent liable for discrimination, they are jointly and severally liable for any compensation awarded. The tribunal does not have power to apportion compensation between respondents. Although this used to be common practice, the Court of Appeal confirmed in 2013 that it is not within a tribunal’s powers.
- In practice, employers often pay any compensation awarded without seeking a contribution from employees, although this will depend on the facts of each case.
Volunteers and worker status
Groom v Maritime and Coastguard Agency in the EAT is a useful reminder about the principles to apply when deciding whether a volunteer is really a worker. Similar issues may come up when deciding whether an intern, for example, has worker rights.
Mr Groom was a member of the Coastguard Rescue Service. His membership was governed by the terms of a Volunteer Agreement, which said it was “a voluntary two-way commitment” between the parties “where no contract of employment exists”. Under the Volunteer Agreement, volunteers could claim an hourly rate for performing specified activities, plus expenses, although in practice some members did not claim payment.
When the Coastguard Rescue Service terminated Mr Groom’s membership after a disciplinary hearing, he claimed that he was a “limb b” worker and that he should have been permitted to be accompanied to the hearing by a trade union representative. The tribunal rejected his claim, finding that he did not have a contractual relationship with the Maritime and Coastguard Agency.
The EAT upheld Mr Groom’s appeal. It rejected the argument that volunteers cannot be workers or employees because the parties have no intention to create legal relations. The tribunal must consider whether there is a contract at all, and if so whether it is a contract to provide work or services to the other party, in the usual way. In this case, volunteers were entitled to remuneration in return for performing activities. The fact they had to claim the relevant sums did not mean that they were not entitled to them. The right to payment indicated that there was a contract between the parties when Mr Groom attended an activity for which he could claim payment. As he provided services personally and was not running a business, he was a worker.
Next steps
- Do not assume that calling someone a volunteer or intern means they will not have employment rights. Using the label “volunteer” does not override the clear meaning of other arrangements between the individual and the organisation.
- Take particular care if volunteers or interns receive payments other than pure reimbursement of expenses. The decision in this case demonstrates that payment is likely to be an important factor in any status assessment and indicates a contractual arrangement between the parties.
- Labour’s “New deal” proposals indicate that unpaid internships would be banned in future, to promote social mobility.
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Authored by Jo Broadbent, Ed Bowyer and Stefan Martin.
