HR and Employment Law FAQs June 2024

We now know that the next UK general election will take place on 4 July 2024. On 24 May, the Labour Party published “Labour’s Plan to Make Work Pay – Delivering a New Deal for Working People” setting out further details of the various changes it plans to make to employment law if it enters government. Many of the proposals in this new deal reflect those outlined in Labour’s earlier “New Deal for Working People” (see our e-alert here), including plans to extend protection from unfair dismissal, broaden entitlement to statutory sick pay and strengthen collective bargaining rights.

The 24-page new deal reasserts Labour’s intention to introduce some employment legislation within 100 days of entering office, while recognising that public consultation will be necessary in relation to some of its plans (for example, the proposal to move to a single employment status of “worker”). The new deal also adds timeframes to certain aspects of Labour’s proposals - for example, clarifying that all three-month limitation periods for claims in the employment tribunals would be extended to six-months, and that Labour would undertake a review of parental leave “within the first year” of taking office.

A key focus of the new deal remains on ensuring that workers are paid a “genuine living wage”. To achieve this, the new deal states that Labour would change the remit of the Low Pay Commission (so that the national minimum wage would also take into account the cost of living) and Labour would remove what it refers to as the “discriminatory age bands” which currently apply in relation to the national minimum wage.

The new deal also includes a new proposal: to change the rules which currently apply in relation to the triggering of collective redundancy consultation obligations, so that an organisation will be required to consult if it proposes 20 or more redundancies within a 90-day period across its business, even if they will be split over multiple sites (effectively reversing the Woolworths case).

Notably, however, Labour’s earlier plan to remove the statutory cap which currently applies in relation to unfair dismissal compensation awards is not referenced in the new deal. The wording in the new deal relating to the business practice of “fire and rehire” talks about “strengthening” the code of practice, rather than introducing an outright ban.

Other worker friendly protections referred to in the new deal (some of which were referenced in the earlier version) include the “right to switch off”, new requirements for employers with over 250 employees to produce “Menopause Action Plans” (much like gender pay gap action plans) and report on their ethnicity and disability pay gaps, plans to facilitate employees making collective grievances, bereavement leave for all workers and plans to encourage employers to sign up to the “Dying to Work Charter” to support terminally ill employees. Interestingly, the new deal’s outline of Labour’s flexible working plans refers to enabling working “hours that better accommodate school terms…to ensure flexibility is a genuine default”.  The new deal also states that Labour would strengthen protection for whistleblowers (including by updating protection for women who report sexual harassment at work) and “strengthen the legal duty for employers to take all reasonable steps to stop sexual harassment before it starts”.

Our policy team is continuing to liaise with the Labour Party to better understand the proposals and we will provide our Make UK subscribers with more detailed commentary on the various plans of the main political parties in due course.

In the meantime, if you are a Make UK subscriber, you can speak with your regular adviser about any general HR and legal issues you may have and/or access further information in our HRL Resources. If you are not a Make UK subscriber, you can contact us for further support on this topic or to access our resources please click here for information on how we can help your business.

 

The Responsible AI in Recruitment guidance, which was published by the Department for Science, Innovation and Technology in March 2024, aims to help employers reduce the various risks that come with the use of Artificial Intelligence (AI)‑enabled tools in HR and recruitment processes. (By way of example, during the various stages of the recruitment process - sourcing, screening, interview and selection - employers are increasingly using AI tools including facial recognition, chatbots, CV scanning software and psychometric testing.)

The new non-statutory guidance, which was developed in collaboration with various organisations such as the Information Commissioner’s Office and the Equality and Human Rights Commission, acknowledges the significant benefits that AI-enabled technologies can offer in recruitment (such as the simplification of existing processes, greater efficiency, scalability and consistency). However, it also flags that various ‘novel’ and ethical risks arise from the use of AI tools in recruitment which need to be carefully managed. Risks include the perpetuation of existing biases, discriminatory job advertising and targeting, and digital exclusion (i.e. the risk of excluding applicants who may not have the necessary skills in, or access to, technology due to disability, age, socio-economic status and/or religion, etc).

The guidance sets out factors that organisations should consider before procuring and deploying AI-enabled recruitment systems, including key questions they should ask (such as “what problem is my organisation trying to solve?” and “is AI appropriate for the problem I am looking to solve?”). It notes the need to consider accessibility requirements (to ensure applicants with disabilities are not disadvantaged by AI tools during the recruitment process) and reminds employers of the importance of completing a data protection impact assessment.  It also refers to other “assurance mechanisms” organisations should consider implementing, such as other types of impact assessment and an AI governance framework (including weblinks to resources aimed at assisting employers to achieve these action points). 

If you are a Make UK subscriber, you can speak with your regular adviser and/or access further information in our HRL Resources.  If you are not a Make UK subscriber, you can contact us for further support on this topic or to access our resources please click here for information on how we can help your business.

PENP is the acronym which is commonly used in employment law (specifically in the context of settlement agreements and COT3 agreements on termination of employment) to refer to “Post-employment notice pay”. If you are making a “relevant termination payment” to an employee (i.e. any payment or benefit which compensates the employee for the ending of their employment, other than a statutory redundancy payment), you will be required to calculate the element of such a termination payment that constitutes “Post-Employment Notice Pay” (PENP).  

There is a statutory formula which must be applied when calculating PENP. Broadly speaking, PENP equates to the basic salary the employee would have received during any unworked period of notice.  

PENP is always subject to tax and national insurance contributions. (Any remaining balance of the termination payment, over and above PENP, can be paid tax-free up to £30,000 with any excess over that threshold being subject to income tax but not employee’s national insurance contributions.) As taxation is a highly relevant issue when negotiating and agreeing termination payments, we recommend that employers take tailored advice on the specific circumstances when agreeing a termination package with an employee.  

If you are a Make UK subscriber, you can speak with your regular adviser about queries relating to termination payments including PENP and/or access further information in our HRL Resources.  If you are not a Make UK subscriber, you can contact us for further support on this topic or to access our resources please click here for information on how we can help your business.

No, the Carer's Leave Regulations 2024 state that employees can take carer’s leave in one continuous block, or in discontinuous blocks of one or more half or whole days, up to a maximum of one week in any rolling 12-month period. To read more about carer’s leave, see our earlier e-alert. 

If you are a Make UK subscriber, you can also speak with your regular adviser and/or access further information about carer’s leave and other family rights, as well as a template Carer’s Leave Policy, in our HRL Resources.  If you are not a Make UK subscriber, you can contact us for further support on this topic or to access our resources please click here for information on how we can help your business. 

If an employee is dismissed by reason of redundancy and the employee has two or more years' continuous service, they will be entitled to receive a statutory redundancy payment. This should be calculated according to a statutory formula based on age, weekly pay and length of service. To calculate a statutory redundancy payment, you should use the following formula:

• for each complete year of service below the age of 22: 0.5 week's pay
• for each complete year of service between the ages of 22 and 40: 1 week's pay
• for each complete year of service from age 41: 1.5 weeks' pay 

When calculating how many complete years of service fall within each of the age bands, you should count backwards from the employee’s termination date, not forwards from their start date. There is a cap on a week’s pay which is adjusted annually (£700 per week from 6 April 2024) and the maximum number of years' service which can be taken into account is 20 years

The Government’s online calculator can assist with this calculation. (Note, though, that the online calculator is not able to take account of adjustments to the calculation that may be required, for example where an employee is dismissed with no notice or with less than the statutory minimum notice period, or where the employee has started but not completed a statutory trial period in an alternative role. We recommend that you seek advice on calculating statutory redundancy pay in these circumstances.)

Note too that some employers choose to offer an extra payment in addition to the statutory payment outlined above, but this is not a legal requirement.

If you are a Make UK subscriber, you can speak with your regular adviser and/or access further information about redundancy payments and related issues in our HRL Resources.  If you are not a Make UK subscriber, you can contact us for further support on this topic or to access our resources please click here for information on how we can help your business.