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Bonus clawback was not a restraint on trade

In the recent case of Steel v Spencer Road LLP (t/a The Omerta Group) [2023] EWHC 2492 (Ch), the High Court ruled that a bonus clawback provision in an employment contract did not amount to a restraint of trade.

In January 2022 Mr Steel, the claimant received a bonus of £187,500 from his employer, Omerta. In February 2023 he resigned from the company.

Mr Steel’s employment contract contained a clawback clause which required him to repay the bonus if he left or was given or gave notice within 3 months of it being paid. As a result of him resigning this activated the clause.

The claimant refused to repay the bonus back, therefore Omerta served a statutory demand on him.  The claimant appealed to the Insolvency and Companies Court (ICC) to have the demand set aside and argued that the clawback provision was an unreasonable restraint of trade. The ICC dismissed this argument, but the claimant later appealed to the High Court.

The High Court dismissed the appeal and held that:

  • The ICC was correct to  conclude that a contractual clawback provision was not a restraint to trade.  Even though a bonus scheme was conditional on the employee staying in his employment for a certain amount of time, it operated as a disincentive to resigning. The clawback clause did not amount to a restraint of trade.
Latest News

50% increase in remote working tribunal claims

The Covid 19 pandemic has led to organisations adopting a more remote, flexible approach to working.

Employment tribunal claims concerning remote working have increased by 50% from 2021 to 2022. The data showed that there were 27 claims in 2021 and 42 claims in 2022. Prior to the Covid 19 pandemic there were only 6 remote working claims.

The trend is continuing with the first half of 2023 recording 23 cases relating to remote working. The employment tribunal data shows that remote working requests are something employers will have to deal with going forward.

Latest News

ICO: Guidance on lawfully monitoring workers

The ICO research reveals that 70% of people surveyed would find monitoring in the workplace intrusive and fewer than one in five people would feel comfortable taking a new job if they knew that their employer would be monitoring them. Monitoring includes tracking calls, messages, webcam footage and audio recordings.

The guidance aims to assist employers to comply with the Data Protection Act 2018. It provides a clear direction on how monitoring can be conducted lawfully and fairly. As well as outlining legal requirements, it also includes good practice advice to help employers build trust with their workers and respect their privacy. 

ICO states that if an organisation wishes to monitor workers it must take steps which include:

  • Making workers aware of the nature, extent and reasons for monitoring;
  • Having a clearly defined purpose and using the least intrusive means to achieve it;
  • Having a lawful basis for processing workers’ personal data;
  • Informing workers of any monitoring in a way that it is easy for them to understand;
  • Only keeping data that is relevant to the purpose; and
  • Carrying out a Data Protection Impact Assessment.

Click here to access the guidance

https://ico.org.uk/for-organisations/uk-gdpr-guidance-and-resources/employment/monitoring-workers/

Latest News

National Living Wage

Following recommendations made by the Low Pay Commission, the Chancellor has promised to increase the National Living Wage. The National Living Wage is due to increase to £11.44 per hour from April 2024. The age threshold is set to be lowered from 23 to 21 in April 2024.

The National Minimum Wage rates for younger workers will also increase. These are as follows:-

•             18-20 year old rate: £8.60 (14.8% increase).

•             Apprentices and those agreed 16-17 year old rate: £6.40 (21.2% increase).

•             Apprentice rate: £6.40 (21.2% increase).

•             Accommodation offset: £9.99 (9.8% increase).

Latest News

CIPD: Employee sickness

The CIPD has published its findings of its annual health and wellbeing at work survey.

The key findings include:

  • Sickness absence- The average level of employee sickness absence rate is 7.8 days per employee. This is the highest level for over a decade.
  • Stress and mental health – Around 76% of institutions reported some stress related absences. These were related to heavy workloads and management styles. Mental health continues to be the most common focus of wellbeing initiatives which includes mental health first aid training, wellbeing champions and promoting flexible working.
  • Presenteeism and leaveism –   These remain prevalent with 87% of organisations observing presenteeism (coming to work when unwell) and 63% overserving leavesim (using annual leave to work or unwell).
  • Manager training – Only 30 % of institutions provide training for managers on how to support people with health problems to stay in work.
  • Wellbeing strategy – 53% of organisations have a wellbeing policy and the number agreed that wellbeing was on the agenda of senior leader remained high (69%).
  • Menopause and pregnancy – 24% of organisations have a menopause policy. 37% have a provision for pregnancy loss. Only 15% have a policy for menstrual health but 19% plan to propose one.

Click here to read more:

https://www.cipd.org/uk/knowledge/reports/health-well-being-work/

Latest News

Menopause discrimination

In the case of Lynskey v Direct Line Insurance Services Ltd ET1802204/2022, the employment tribunal found that the employer treated an employee unfavourably because of something arising from her disability and failed to make reasonable adjustments.

Mrs Lynskey worked for Direct Line Insurance Ltd as a tele-sales consultant from 2016 until her resignation in 2022.  In 2019 she started to experience menopause symptoms which adversely affected her work performance. Prior to this she had received good performance marks in the first four years of her employment.  In 2020, she was diagnosed with a hormone imbalance, depression and low mood and was prescribed antidepressants.

In 2020, she received a couple of customer complaints regarding her handling of a call and was given further training.  The employer carried out performance management proceedings and Mrs Lynskey received a disciplinary warning. During this process she was signed off sick and was referred to occupational health in which they advised that she was likely to be disabled. After she had received  13 weeks of sick pay she was informed that she could not receive any more sick pay. On 3 May 2022 she resigned, bringing claims for constructive dismissal and disability, age, and sex discrimination.

The tribunal upheld her claim for discrimination arising from disability and failure to make reasonable adjustments. The decision to give Mrs Lynskey an annual performance rating of requiring improvement, a formal written warning and to cease paying discretionary sick pay before her entitlement ended were found to be reasons of discrimination arising from disability. Although the company did make adjustments and provide additional support and training to Mrs Lynskey, the tribunal found that the company should have gone further.

The tribunal awarded the claimant compensation totalling £64,645, including £23,000 for injury to feelings. A £2,500 award was given for aggravated damages in relation to the company’s failure to accept that she was disabled until January 2023, and that it had constructive knowledge of her disability until the final hearing commenced in April 2023.

Latest News

Unfair dismissal and discrimination for using offensive racial term

The employment tribunal found that an employee was unfairly dismissed and discriminated against for using offensive racial term during a training session.

The claimant was a manager at Lloyds Bank. He attended a race awareness training session and was asked how he should handle a situation where he had heard someone using language that might be offensive if not used by someone of an ethnic minority. He responded by saying “the most common example being the use of the ‘N’ word in the black community”. He had used the full word.

The claimant was dismissed for gross misconduct for the use of the offensive language.  He brought a claim of unfair dismissal and discrimination arising out of disability.

The tribunal upheld the claimant’s claim for unfair dismissal. The tribunal found that context was everything. The claimant did immediately apologise after he had said the word. He had not used the word as a term of abuse, but simply to ask how to deal with the use of unacceptable language. The Bank failed to conduct a reasonable investigation and it was found that the Bank did not have reasonable grounds for believing that the claimant’s actions amounted to gross misconduct.

The tribunal also upheld the claim of discrimination arising from disability. The claimant had dyslexia, and this led him to reformulate questions and burst things out before losing his train of thought, contributing to the way he expressed himself in the training session.

This is a useful reminder to employers to investigate matters properly and to consider if their decision to dismiss falls with the band of reasonable responses.

Latest News

CIPD: Transgender and non- binary guidance

The CIPD has published new guidance on ‘transgender and non-binary inclusion at work’ to assist employers in enhancing equality, diversity, and inclusion (EDI) in the workplace.

According to the recent research carried out by the CIPD, LGBTQ+ employees are more likely to experience workplace harassment than heterosexual colleagues. 18% of transgendered employees admitted that they felt mentally unsafe in the workplace.

The guidance can help employers create a more inclusive workplace for transgender and non- binary employees. Employers can achieve this by carrying out the following:

  • Creating new EDI policies and amending existing policies to ensure they are up to date.
  • Carrying out EDI training.
  • Demonstrating through web pages and social media platforms that they are a diverse workplace to attract talent.
  • Creating an environment where everyone feels safe and accepted.
  • Avoiding sharing data about transgender and non- binary persons’ gender identity unless they have instructions to do so.
  • Making sure action is taken if an employee displays inappropriate behaviour towards transgenders and non-binary employee in the workplace.

Click here to read the guidance: https://www.cipd.org/uk/knowledge/guides/transgender-non-binary/

Latest News

ICO: guidance on processing workers’ health data

The ICO has published in depth guidance for employers on processing workers health data.  It aims to provide tips and good practice advice for employers on how to comply with data protection legislation. Health data is categorised as special category personal data and is granted enhanced protection under the UK GDPR.

The guidance explains how the Data Protection Act applies to the processing of workers health and key points to consider to ensure compliance. These include:

  • Observing the stricter requirement for processing special category data;
  • Providing employees with details about the employer’s processing of their data;
  • Carrying out a data protection impact assessment; and
  • Data minimisation and security.

The guidance looks at how data protection law applies to particular workplace circumstances. For example, managing sickness absence records and occupational health schemes. 

The guidance also has a set of checklists to help guide employers through their data protection issues whenever they need to process workers’ health information.

Click here to access the guide:

https://ico.org.uk/for-organisations/uk-gdpr-guidance-and-resources/employment/information-about-workers-health/

Latest News

Adjustments for workers experiencing symptoms of menstruation and menopause

A survey of 2,000 workers has revealed the most helpful adjustment in managing negative symptoms of menstruation and menopause in the workplace.

Of those who were surveyed, 35% said that the negative symptoms associated with menopause affected their work. 53% said that their symptoms associated with menstruation also made it difficult for them to work.

According to the survey, the most popular workplace adjustments were:

  • Fresh air;
  • Comfortable desk seating;
  • Natural light;
  • A private room;
  • Temperature controlled spaces; and
  • More focus rooms with less distractions.

This is useful guidance for employers looking to make the workplace more manageable for workers experiencing such symptoms.

Latest News

Discrimination -gendered swear words

The recent case of Fischer v London United Busways ET/2300846/2021, demonstrates that a use of a gender swearword could amount to discrimination.

Miss Fischer is a trans woman who worked as a bus driver for London United Busways (LUB). She brought a claim against the LUB for gender reassignment discrimination. One of her allegations were that one of her colleagues had called her a ‘wanker’. She argued that this was less favourable treatment because of her gender reassignment.

The claim failed because the employment tribunal found that the alleged comment had not been made. However, the tribunal implied that had the comment been made, this would have been sufficient to establish a case of gender reassignment discrimination. The tribunal recognised that the swearword that was used in this case is used to apply to men and therefore not gender neutral.

The tribunal also found that the company had not taken ‘all reasonable steps’ to prevent the gender reassignment discrimination. The reasons being that (1) the Equal Opportunities Policy was not up to date, (2) the Equal Opportunities and Harassment policies were pinned on noticeboards at the depot where only a small proportion of the drivers spend their time there; and (3) there was a lack of understanding and awareness of the LGBTQ issues across the company.

Morgan LaRoche can assist with policies, procedures and internal training to assist Companies in defending discrimination claims.

Latest News

Employer failed to make reasonable adjustments for dyspraxia

In the recent case of AECOM Ltd v Mallon [2023] EAT 104, the Employment Appeal Tribunal (EAT) found that the employer was under a duty to make reasonable adjustments for a job applicant with dyspraxia which required him to complete an online application form which put him at a substantial disadvantage.

The applicant applied for a job with AECOM Limited. He had emailed his CV to AECOM’s HR department which included information about his dyspraxia and asked if he could make an oral application due to his disability. The AECOM’s HR manager contacted the applicant to inform him that he needed to complete an online application form and that if he required assistance, he would need to contact them. The applicant was unable to complete his application form and brought a disability discrimination claim against the company for failing to make reasonable adjustments.

The tribunal upheld the applicant’s claim that he was put at a substantial disadvantage. Although the company did not have ‘actual knowledge’ of the disability, the tribunal found that they did have ‘constructive knowledge’ as they ought to have known that the applicant faced a disadvantage due to his dyspraxia. The tribunal found that it would not have been reasonable for him to explain himself further by email due to his difficulties with written communication. The company appealed the tribunal’s decision of ‘constructive knowledge’ by stating that it was flawed.

The EAT found that the company should have made reasonable enquiries into the nature of the applicant’s dyspraxia which should have involved a phone call to the applicant as his lack of responses to emails was due to his difficulty with written communication. If the company had made reasonable enquiries, they would have had knowledge of the disability to make reasonable adjustments which is an obligation under the Equality Act 2010.

This is useful guidance to employers to understand their obligations during recruitment.

Latest News

ACAS: Sickness absence management

In July 2023, ACAS updated its guidance on managing sickness absence in the workplace. The guidance covers a range of topics including:

  • Checking holiday entitlement and sick pay;
  • Fit notes and proof of sickness;
  • Time off for dependants/ parents;
  • Returning to work after absences;
  • Creating absence policies; and
  • Recording and reducing sickness absence. 

Here are some tips for employers from the guidance on how to manage sickness absence effectively.

  1. Contact during absence

Employers and employees should agree on how to stay in touch during absence and how much contact is reasonable. Employers should also inform employees who are absent about promotions, job opportunities and redundancies. This helps to maintain good relationships with employees and protect employers from discrimination complaints.

  • Return to work meetings

Return to work meetings can help identify the best way to manage sickness absence. They can help to identify any trends in absence across companies and identify underlying cause of absence.

  • Recording absence

Recording sickness absence can help employers to:

  • Find if there is a problem with absence levels;
  • Compare absence levels with similar organisations;
  • Identify the more common reasons for sickness absence in the organisation; and
  • Explore whether absence levels are highest in certain groups of employees.

Click here to access the guide: https://www.acas.org.uk/holiday-sickness-leave

Latest News

“Midlife MOT’s” for employees over 50

The Department for Work and Pensions are encouraging employers, mainly small and medium sized companies to offer so- called midlife MOT’s to help keep and support employees aged 50 and over. The proposal aims to combat the trend identified by the tech company Multiverse, which found that around 5.3 million workers over 50 are considering early retirement due to perceived skill gaps.

Click here to read more – Minister encourages employers to offer ‘midlife MOTs’ to retain older talent (personneltoday.com)

Latest News

Gender pay gap data published

The Office of National Statistics releases annual statistics on differences in pay between women and men by age, region, fulltime and part time status and occupation, as compiled from its Annual Survey of Hours and Earnings.

As of April 2023, the total gender pay gap was 14.3%. The gap among full time employees increased to 7.7% in 2023, up from 7.6% the previous year. The gender pay gap for part time employees did not change in 2023 at -3.3%.

There remains a significantly higher gender pay gap among employees aged 40 and over compared with those under 40 years. For age groups under 40 years, the gender pay gap for full time employees is 4.7% or below. For age groups of full time employees aged 40 and older the gender pay gap is much higher. The largest gender pay gap is in the age group of full time employees aged 60 years and over, where the gap is 14.2%. A significant reason why the larger pay gap for those aged 40 and over is the smaller proportion of woman in fulltime, higher paid roles.

You can read the report and view the Gender pay gap data here – Gender pay gap in the UK – Office for National Statistics (ons.gov.uk)

For advice on this and other related topics contact our employment law specialist and director Hannah Belton.

Latest News

Default flexible working to close gender pay gap

On 23 November 2023, the Fawcett Society published its findings in a report, ‘Equal Pay Day 2023: Making flexible working the default’. The report notes that, at the current rate of change, the gender pay gap will not close for another 28 years meaning that woman aged 40 and older will have reached state pension age before this happens.

The report mentions that the types of flexibility available to women, such as part time work and varied hours of work may not reflect true flexibility and can be associated with lower pay and insecurity.  In contrast, men were more likely to have access to more desirable forms of flexible work.

The report suggests that if flexibility was available in workplaces across a variety of careers and taken up by both men and women, this would lower the gender pay gap.

Click here to read more Equal Pay Day 2023: Unlocking flexible work (fawcettsociety.org.uk)

To speak to an employment law expert get in touch.

Latest News

Supporting new mothers at work

The Fawcett Society has published an employer’s guide on supporting new mother at work.

The suggestions for employers include:

  • Build a clear policy framework– This should be shared with management and employees to assist productive conversations before family leave begins.
  • Use data– This allows employers to track retention, training, and promotion.
  • Foster a positive and inclusive culture – Educate staff to build a culture that understands the challenges faced by parents.
  • Upskill managers – Compulsory management training to support returning parents.
  • Embed flexible work options– Have conversations with returning parents to find working patterns suitable for both parents.
  • Champion affordable childcare – Educate management about the pressures brought by childcare.

Click here for further guidance  Paths to Parenthood: Uplifting Mothers at Work (fawcettsociety.org.uk)

Latest News

Discrimination for gender critical views

The tribunal upheld claims by a former professor against her employer, the Open University of direct discrimination, harassment, victimisation, and constructive dismissal in relation to her gender critical beliefs.

In 2021, Professor Phoenix and others established a Gender Critical Research Network (GCRN), intended to be an academic research group promoting research into sex, gender, and sexualities from a gender critical perspective. As a result of this, she was harassed and directly discriminated by her colleagues.

The tribunal decided that Professor Phoenix was entitled to exercise her rights to demonstrate her beliefs by setting up and participating in the GCRN.   

The University did not do enough to protect Professor Phoenix from harm. It failed to produce an outcome for her grievance and refused to take down certain online statements. This constituted as harassment and the decision to terminate the grievance process after she had left was evidence of post-employment victimisation.

Latest News

ONS: Ethnicity pay gaps

The Office of National Statistics (ONS) released earnings statistics for different ethnic groups, using data from the Annual Population Survey between 2021 and 2022.

The ONS suggests that:

  • Black, African, Caribbean, or Black British employees have, consistently since 2012, earner less that White employees. In 2022, based the five-category breakdown, Asian or Asian British employees earned more than White employees, with a pay gap of negative 3.3%.
  • County of birth is an important pay- determining factor. When compared with UK- born White employees (who earned on average £14.26 an hour), UK – born Black, African, Caribbean or Black British employees earn more (£15.18 an hour), while non-UK born Black British employees earned less (£12.95 an hour).
  • Ethnicity pay gaps are potentially affected by differences in personal and work characteristics. Factors with the greatest impact are occupation, qualifications, geography, age, and sex.

Click here for more information Ethnicity pay gaps, UK – Office for National Statistics (ons.gov.uk)

Latest News

CIPD: guidance on terminal illness

The CIPD has issued new guidance on supporting and managing employees with terminal illness. Research suggests that only one third of UK organisations have specific provision regarding terminal illness.

The guidance provides assistance on how to create an inclusive and supportive culture in the workplace for those effected by terminal illness.

Click here for further guidance Terminal illness: Guidance for people professionals | CIPD