Expert Insights into Flexible Working and UK Employment Legislation

Unlock the secrets to navigating the latest twists and turns in employment law with Helen Goss, Partner in the Employment team and Andy Whiteaker, Partner and Head of Employment, as they dissect the significant shifts set to transform UK workplaces.

Join us for an insightful dialogue as we untangle the complex web of flexible working, holiday pay calculations and how Brexit reshapes UK employment law. We'll illuminate the distinctions in entitlements between EU-derived leave and additional UK regulations, and analyse the ripple effects of the Harper Trust and Brazil case on part-year workers. 

Together Andy and Helen, we'll also explore the crucial expansions in redundancy protections for parents and the streamlined 'microtransfer' procedures in TUPE regulations, offering a lifeline for smaller business transfers and an exemption for electing employee representatives. Don't miss this comprehensive tour through the maze of rights and protections altering the employment law scene in the UK. 

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Chapters

• 1:22 Flexible Working
• 9:45 Holiday Law Changes
• 13:50 Remuneration
• 20:11 Maternity leave, adoption leave, shared parental leave
• 25:27 TUPE

Transcript

Andy Whiteaker: 0:04

Hello and welcome to the Boys Turner Employment Law podcast. My name is Andy Whittaker, I'm a partner in the employment team and I'm very happy to say that today I am joined by my fellow partner, Helen Goss.

Helen Goss: 0:15

Hi everybody.

Andy Whiteaker: 0:17

And today we are going to be talking about a number of different themes and subjects. It is the end of January as we're sat here recording this and, as a result, there are a few legislative changes that have come into force earlier on this month, and there are a few more changes that are slated to come into force over the next few months, and we thought it would be therefore a good opportunity now to have a chat about some of those changes and talk about them in a bit more detail.

Helen Goss: 0:46

Yes, well, I've done a little list, Andy. So we're going to look at the right to request flexible working, which I think is going to be quite a big thing now in this new post-pandemic hybrid working world. We're going to look at how you calculate holiday and holiday pay, which has been a bit of a thorn in quite a lot of people's sides Redundancy protection for people who are pregnant, on maternity, adoption and, in some instances, shared paternity leave, and then TUPE.

Andy Whiteaker: 1:21

OK, so I think the first topic we're going to deal with is flexible working.

Helen Goss: 1:25

Yes, so some big changes coming in, Andy, from the 6th of April. So we just need to remember that it's the right to request flexible working, not the right to have flexible working, and I think a lot of employees who make the request think that it is actually then their right to have the flexible working. But of course, the right is the right to request. So it's always been an area for potential fallout and disagreement, but certainly, since the life of this right, we have come a long way, because I think to start off with the starting point was always going to be well, no, but things really moved on , and as we do often see a lot of atypical working in terms of reduced hours, working less days, working from home, compressed hours, staggered hours, so a lot of atypical flexible working actually happening.

Andy Whiteaker: 2:23

And the pandemic has really driven this as well, hasn't it?

Helen Goss: 2:27

Yes, and I think that, if you remember, overnight we were all flexi working, weren't we? Because where the job allowed, we were working from home. And now a lot of businesses are wanting to mandate that people come into the office, perhaps more than they have been over the last couple or three years, and a lot of people are a little resistant because they've perhaps arranged their life in a certain way, particularly around childcare or care for dependents.

Andy Whiteaker: 3:00

So I guess in the past it was easier for businesses to turn down flexible working requests. There's the there's the statutory grounds upon which requests can be rejected, and it was possible for employers to identify one of those grounds, where it was the ability to organize work appropriately or to meet customer demand. It was possible to say, well, that's really going to be compromised by you, this working pattern that you're proposing, yeah, whereas of course, in the pandemic, lots of people found that it was perfectly possible to do that without impacting upon those particular issues.

Helen Goss: 3:32

Exactly, and I think that that's where now the world has moved on very significantly and our mindframes have changed. Our mindsets have changed. So we've got new ways of working, new technology, people being very careful and protective of their work life balance and, of course, now we've got some new legislation on the horizon.

Andy Whiteaker: 3:56

So what specifically is going to change then?

Helen Goss: 3:58

Right. So what is going to happen is that the right to request flexible working is going to be a day one right? So from the 6th of April so previously it was after 26 weeks of service, but now from the beginning of your employment you can make a request to work flexibly. So I think a lot of employers may be blindsided, in that they've advertised and recruited, perhaps for a full time job, and then almost immediately somebody is potentially going to be able to ask to work in a flexible manner. And, of course, tied in with that, in the past we were only able to make one request per annum, whereas now we're going to be able to make two requests in any 12 month period. If someone's got a being upon it and it keeps being rejected, then they can keep on making the request. Although I don't know how it's going to work out if you keep making the request on the same basis and having the same argument over and over again. People are going to have to consult with the employee, particularly if their request is going to be refused. Very often I've seen and I don't know if you have as well, andy that employers have agreed a trial period.

Andy Whiteaker: 5:22

Sure, yeah, thank you.

Helen Goss: 5:24

And I think that that is probably quite a sensible thing to do, although, of course, if that trial works, then it is going to be almost impossible to then come back and say that actually, no, it isn't working. And if you are going to do that, you're going to have to have some really hard evidence as to why it's not working.

Andy Whiteaker: 5:44

Yeah, it's going to be really important for both the employer and the employee to understand specifically what success and failure looks like. It is always a bit of a risk for an employer when they agree to a trial, because there's not necessarily a guarantee that the amount of effort and commitment and dedication shown by the individual during a trial period would be continued following the end of the trial.

Helen Goss: 6:11

Oh, cynical ending.

Andy Whiteaker: 6:12

I know, I know, but that is a reality, I think. So employers need to be slightly cautious about how long the trials are for and, as I said, identifying what success and failure looks like. But I think we're going to see some cases on this, in the same way that we're starting to see cases not obviously around this issue of the day one right, but just generally about the turning down flexible working requests, where we are seeing people who are being asked to come back into the office and employers being unwilling to accommodate the level of flexibility that the individuals are looking for.

Helen Goss: 6:48

Yes, I mean, I'm seeing that the argument from businesses, teamwork and collaboration. That seems to always be why we need people in the office. And, of course, perfectly good reasons, because there's an energy isn't there that's created when people are actually together physically.

Andy Whiteaker: 7:07

And I think the pendulum has swung, hasn't it? I think in the immediate post pandemic feeling, or maybe at the very commencement of the pandemic, once everyone had their IT systems up and running, there was this joy of liberation we need never go to the office again. This is fantastic, isn't it? But I think the pendulum has swung back the other way, not to a complete return to 2019. But I think for many businesses, there's a desire to get people more back in the office than perhaps be in the case for the last couple of years.

Helen Goss: 7:39

Yeah, I mean I do agree with that. But then when you read articles around this sort of thing and the issue of hybrid working, you do hear a lot of commentators saying that the businesses that are going to do well are those that do adopt a flexible approach to hybrid working, and that the main way to retain the talent in your organization or to attract the best talent to your organization is to have a form of hybrid working, so that then people feel more in control of their lives and their work life balance.

Andy Whiteaker: 8:17

I think, probably with many things employment law related, the key thing is to know what works for you and your business. So identify what it is that you're, what it is that you want to be. How is it that you want to operate your business? And make sure that's clearly communicated to your team members. And it may be that for some people they don't that doesn't work for them. They don't want a greater or less flexibility, potentially. But as long as you're clear and you communicate and you explain the reasons why you're introducing the particular patterns that you are, I think you've got a better chance of building a positive culture and having buy-in from everyone that's working with you.

Helen Goss: 8:56

Yeah, I suppose it comes down to trust, as in all things, employee engagement really doesn't it? Yeah, just one other thing I wanted to mention was the time for making a decision. Okay, so at the moment it's three months, whereas that is now going to go down to two months. So that's quite a significant drop in time from the actual point at which the request is made to hold a meeting, consider it, give your outcome and then a possible appeal. So you need to have a look at your policies, update your policies and your processes, and also have a look and see what is the attitude of the business to hybrid, flexible working.

Andy Whiteaker: 9:47

Move on to the second topic now, and I was going to lead off and talk a little bit about holiday.

Helen Goss: 9:53

Yeah, it's a big subject, Andy.

Andy Whiteaker: 9:57

It is. It is, and, as I've already said, there's been quite a few changes, some of which are reasonably technical and so I don't want to get into too much detail around there. There's been some changes in respect of obligations around record keeping. There's also been some tweaks around carrying over holiday leave into the following year, legislating specific circumstances where an employee is allowed to carry over holiday.

Helen Goss: 10:20

I thought that was quite interesting actually, because I think a lot of organizations probably already did that. So it's, for example, if someone has been on sick leave and hasn't been able to take their holiday, or situations where perhaps it's so busy there hasn't been time for them to go and take their holiday. So where some businesses have been a bit intransigent about that, they're not going to have to really really address the situation where people haven't been able to take their holiday.

Andy Whiteaker: 10:48

Yeah, and I think this is a good example of where European law has led us in a particular direction. But as a result of the departure from the European Union, what we're now seeing? Some legislation which identifies some principles that were established under European law. So, for example, there were cases in the European Court of Justice around the right to carry over in those sort of circumstances. We're now seeing that specifically codified into into UK law. So it's things that many businesses would have been aware of and would have been doing anyway, but now it's specifically showing up in in UK legislation. There's also the rules around COVID holiday pay carryover that's being repealed and actually, as you know, we're now Thank goodness, thank goodness, but we are quite a distance away from the last lockdown and impacts upon people being able to take their annual leave, so that seems to make sense to me. There's also a decision to continue to identify the difference between your four weeks annual leave and your 1.6 additional annual leave. Now, this is a bit in the weeds as to how this came about.

Helen Goss: 12:07

Sort of European holiday and English British holiday, isn't it?

Andy Whiteaker: 12:11

That's right, but the long and the short of it is that for a full time employee, you're entitled to 5.6 weeks of annual leave, which works out as 28 days for someone who's.

Helen Goss: 12:22

But that includes bank holidays, doesn't it?

Andy Whiteaker: 12:24

That does include bank holidays, but those original four weeks. So four weeks of that 5.6 emanates from European Union law, whereas the 5.6 in total is something that comes from the working time regulations. Now, one of the interesting things about the decision to keep those two forms of leave separate is around the calculation of what holiday pay looks like.

Helen Goss: 12:51

Now those of you. This is where it gets a bit complicated, isn't it?

Andy Whiteaker: 12:54

Yes, but it's okay, we can get through this.

Helen Goss: 12:57

Okay, go on.

Andy Whiteaker: 12:57

Many people will remember cases getting off for nearly 10 years ago now which looked at what holiday pay is and how it should be calculated, and what elements of pay should be included when calculating what someone's annual leave entitlement should be or what they should be paid when they take a day's holiday. And the long and the short of it is that it would be unlawful to exclude certain elements of variable remuneration, so it would not be okay to simply pay someone their basic salary, for example, if they might otherwise receive commission or certain forms of bonus.

Helen Goss: 13:33

Yes, so I can't remember the name of the case that brought that in.

Andy Whiteaker: 13:36

Well, it was Bear Scotland, that was it.

Helen Goss: 13:37

It wasn't Bear Scotland, that was it it was Bear Scotland, and there was a lot of discussion then, wasn't there about bonuses and commission payment and all those payments that were intrinsically linked to the employment?

Andy Whiteaker: 13:50

That's right, but one of the little peculiarities of it is that where there was case law establishing that you needed to include the variable remuneration in a week's holiday or in your holiday pay, that was only in respect of those four weeks that you got under European Union law and not the additional 1.6 weeks. It was a bit odd, wasn't it it? is, but that is being maintained. There was consultation about it and decision has been kept that we will have. We will retain the distinction between the four weeks and the additional 1.6. And when we're looking at paying normal remuneration, because there's now a specific definition of normal remuneration that is relevant to those original four weeks, not to the 1.6 additional. There's a slight quirk in this because over the last 10 years or so we've had all these cases which have established various forms of variable remuneration forming part of normal remuneration and therefore needing to be included. But in the guidance that's been provided by the government in respect of this new regulation, there is a suggestion that bonuses aren't included in normal remuneration.

Helen Goss: 15:04

Yes, I was going to ask you actually about bonuses, because I think where we thought it was a bonus was performance related rather than just a discretionary bonus, then it generally was included. But I agree, that's what I've seen in the commentary as well.

Andy Whiteaker: 15:19

And I think it's probably safest to carry on on that basis. If someone receives a bonus because of work they have done and it's attributable to them, my advice to employers would be to continue to include that sum in their normal remuneration calculations for annual leave, Whereas if it is something that's genuinely discretionary, it's something that's paid out to all staff. It's a flat figure.

Helen Goss: 15:44

Like a Christmas bonus, christmas bonus, something like that.

Andy Whiteaker: 15:47

I think there's an argument that that could be excluded. That's in the weeds a little bit. Another thing that's slightly in the weeds as well, but it is important is around how you pay individuals who provide services to you on an irregular or part year basis.

Helen Goss: 16:05

Yes, now that was the Harper Trust and Brazil case, wasn't it?

Andy Whiteaker: 16:09

It was, and it was a curious case in that it's its conclusions meant that someone working on a part year basis would potentially receive a higher rate of holiday than someone who worked the same number of hours that they did, albeit spread over the course of a year, and that seemed Slightly odd. I mean, the Supreme Court decided it and they're there to interpret the laws, and they concluded that was, that was how it should be done, but it did seem like a slightly strange outcome yes, I don't think anybody other than, presumably, people who worked part year thought it was a sensible outcome, did they? That's right. So what we have now is the return of the old favorite rolled up holiday pay. Yeah, I know which disappeared back in 2006, or at least it was made unlawful.

Helen Goss: 17:03

Yeah, I think you'll find in certain sectors, particularly, I don't know, construction, that sort of thing, it still did happen.

Andy Whiteaker: 17:09

Yeah, and the way that this operates is essentially, businesses take the view that it's much too difficult to try and calculate what someone's holiday pay is On a particular day when they take their annual leave, because their hours may have varied, they may have been working a lot over the last week or so, but not the weeks before then. It's quite difficult to be sure. They are HR systems that can calculate this, but it's not necessarily straightforward and also it can give you some strange outcomes as well. So many businesses just said forget that. We'll just work out what someone's holiday pay should look like in any given year On a on an assumption as to what their pay would look like, and we will just pay that to them as a supplement on top of their normal pay during that particular year. So they don't get paid an extra sum when they actually take holiday. It's just drip fed through to them during the course of the year. And although that was unlawful, actually, as you've said, helen, many people just carried on doing it because, number one, people lot of people didn't care. And number two, in many situations, even though someone might be paid a bit too much for their annual leave on one occasion, they might be paid under the odds on another occasion. Swings and rounds about, it might sort of more or less equal itself out over the course of a year. Well, where are we now? Well, as a result of Harper and Brazil, we now have the reintroduction of rolled up holiday pay. So employees are entitled to simply look at a 12 month period and say we are going to calculate from the outset what someone's and I should say this is only in respect of irregular and part time, part year work- yes. But what you can do is you can look at what their total remuneration would be over the year and then pay them 12.07% of that during the course of the year as a supplement on top of their wages, and you pay it to them when they work. You give it to them, but you don't have to give a separate sum to them every time they take annual leave, which simplifies things and seems sensible sensible and fair. To me. I think it is a practical way of trying to alleviate some of the complications that arise from trying to calculate holiday pay, removing that slightly weird outcome that arose as a result of the Harper Trust case. I think it just makes sense. I think it's a welcome change.

Helen Goss: 19:36

And I think it's important that you make sure that it's properly recorded on payslips as well, so people understand what they're being paid, how they're being paid, etc.

Andy Whiteaker: 19:46

Yeah, that's right, so helpful, I think there.

Helen Goss: 19:49

Yeah, that's good then, isn't?

Andy Whiteaker: 19:50

it. That's good, it's helpful. It's good, it is good. So the next one on our list, I think, was around redundancy, yes redundancy protection for a particular group of people.

Helen Goss: 20:11

So I think this is another piece of legislation that is a big mindset change again. So it's the new maternity leave, adoption leave, shared parental leave amendment regulations 2024. Very catchy title, snappy, due to start on the 6th of April. I think they're still in draft, so there may be some changes, but I don't think to the general principle of the protection. So this is going to give some protection in a redundancy situation to people who have notified to their employer that they're pregnant during their maternity leave and potentially for a whole period of 18 months from the start of their maternity leave, and it's also going to offer that similar protection to people on adoption leave and quite an interesting situation in respect of shared parental leave.

Andy Whiteaker: 21:06

Okay, so what's that then? What the shared parental leave? Yeah, tell me about it. I want to know this interesting situation.

Helen Goss: 21:12

Okay, I'll tell you about the shared parental leave. So, as I said, similar protections, but where a person so whether that might be the mother or the father has taken six weeks or more of shared parental leave, then that's going to result in them having 18 months worth of protection. So that's quite a long period of time, as you can see, and I'm wondering whether that's not going to make parental leave, which is so underused, more popular.

Andy Whiteaker: 21:49

Well, maybe I think my younger brother is the only person that I know personally who's ever used shared parental leave. Yes, but we know also it's kind of in the crosshairs as well both from the Conservative party and also the Labour party, so it's a recognition that the current system doesn't work very well, so we may see a change to that.

Helen Goss: 22:08

It's very complicated legislation. The rules are so complicated and we virtually never get any queries do we from clients about it. And the reason is is that virtually no clients have people who've taken up shared parental leave and that's mostly because it's not generally paid for in the same way that maternity leave is.

Andy Whiteaker: 22:30

So the mischief that this legislation or the changes to the law here are trying to address is really the appalling rates of attrition for people in the workforce who go on maternity leave and then don't come back. Don't come back, yeah.

Helen Goss: 22:47

And not generally because of their own decision not to come back. So what the protection is going to do is, when there is a redundancy situation, then the protected people are going to have first dibs, essentially on jobs that are suitable, alternative jobs that are vacant.

Andy Whiteaker: 23:09

And I've always found it slightly odd actually because I've advised employers in these sort of situations in the past where you might have someone who is heavily pregnant but not yet on maternity leave, who therefore does not have the protection, whereas you then have someone who just, yeah, they are on maternity leave, maybe they gave birth a couple of weeks before and they do have the protection. So it always seems slightly anomalous that if you're trying to protect people who are either pregnant or going through maternity leave all to do with childcare why would you not cover people both who are about to go on maternity leave as well as those that are on maternity leave?

Helen Goss: 23:49

Yes and, in fairness, a lot of people think that that protection already exists. So from the 6th of April it is going to exist. But I think it's important to remember that people who are pregnant or on maternity leave or in that period when they return, that's still covered by the protection. They can still be made redundant. So it's not a ban on making these protected people redundant. It's just meaning that where there are jobs available and they are suitable alternative roles, then these people must be considered and offered those jobs first.

Andy Whiteaker: 24:25

And in some European jurisdictions there is a moratorium. I mean if you're on maternity leave or for a period of time afterwards, you simply can't be made redundant, so you can't be dismissed. So we're not going quite that far, but hopefully this will dissuade some employers who might be tempted to engage in reorganizations shortly after someone who returns from maternity leave returns and then they find themselves shuffled out of the business.

Helen Goss: 24:50

Just two little points. Where someone has sadly suffered a miscarriage, then the period of protection will extend for two weeks from the end of the pregnancy and, as I think I said, people on adoption leave will have the same period of protection, which is when a child is placed with them. So they will have 18 months from that point. Anyway, TUPE.

Andy Whiteaker: 25:27

Yes, because. Or as the Americans say TUPE. So I love talking about TUPE, obviously because it's a fascinating subject. It is around the protection of employees in the event of either an outsourcing and insourcing or in respect of an asset sale, and it's protecting individuals, their employments, protecting them from dismissal because of the transfer and also imposing some obligations upon the transferee and the transferor to use the technical terminology to consult with employee representatives. Now, this is something that is often a bit of a bugbear for clients of mine when there is quite a small-scale transfer.

Helen Goss: 26:05

It's a bit over the top sometimes, doesn't it?

Andy Whiteaker: 26:07

Well, that's right. So there's an expector, or a requirement, I should say, for both parties to consult with appointed or elected representatives of the affected employees, and when you've only got maybe a handful, of individuals who are being transferred, it's an outsourcing or it's a small part of a business that's being sold. The necessity to go through a process of electing representatives when you've got five or six people and you could just talk to them all in a room seems a bit onerous, frankly, but nonetheless, that's what the regulations say and that's what the obligation is. So what we have now is sort of microtransfer provisions. So where we have businesses with less than 50 workers or we have small transfers where there are fewer than 10 workers that are affected by the transfer, then the obligation to go through the process of electing staff representatives will not apply. So still an expectation that you will provide the relevant statutory information about what's happening, what will happen to the employees post transfer, when it's like to happen, et cetera. That still needs to be provided to the employees. But you can just do that directly and you don't have to go through the process of appointing representatives.

Helen Goss: 27:25

So another sensible piece of legislation, Andy.

Andy Whiteaker: 27:28

That's right. That's right. I mean, we're long enough in the tooth to remember the glory days of the noughties when there seemed to be legislation coming at us thick and fast. Every April or September there was some new legislation for us to get our head round. That hasn't been the case over the last few years there's been a few other pressing matters that have taken up a lot of the government's time. We have seen some new legislative changes. A lot of that's been driven. A lot of these changes are driven by private members bills, so these are individual members of parliament pushing through these changes rather than it being government policy, albeit the government has supported them. We might be up for some more substantial changes as we come towards the end of this year and moving into next year, especially if we see a change of government. We'll have to see what happens in respect of various rights that have been highlighted in the Labour Green paper, to what extent they get incorporated into a manifesto and then, of course, to what extent they survive the rigors and pressures of government. But we could see some quite substantial changes on the horizon. Things like the removal of worker status and just the creation of one single status that includes both employees and workers. Also potential removal of caps on unfair dismissal awards in the tribunal and maybe even the reduction of service requirements to bring an unfair dismissal claim.

Helen Goss: 28:49

But I think, andy, that is another podcast, that is most certainly for another podcast, absolutely so.

Andy Whiteaker: 28:55

I think that probably wraps up what we wanted to talk about today. So thanks for your time, Helen. We're going to be releasing regular episodes on employment themes, so just subscribe or follow the podcast, you'll be able to listen to them as soon as they are available. So thanks everyone and goodbye.