A month and even a week can be a long time in politics. In our latest Employment Essentials article, we share our top picks of the recent employment law developments from an unusually turbulent period that may affect your business.

This month our top 10 picks are:

Case law updates

  1. Redundancy - Consultation not meaningful if it takes place after decision to apply selection criteria inevitably leads to a pool of one
  2. Long-COVID and disability - two contrasting cases

Legislation, consultations & services

  1. Retained EU Law (Revocation and Reform) Bill
  2. Transport Strikes (Minimum Service Levels) Bill
  3. Monitoring at work draft ICO guidance
  4. Support with employee health and disability
  5. Plan to consult further on exit pay for local government staff

Hot topics

  1. Artificial intelligence
  2. Diversity, equity and inclusion initiatives
  3. Gender balance in the boardroom

Case Law Updates

1. Redundancy - Consultation not meaningful if it takes place after decision to apply selection criteria inevitably leads to a pool of one

In Mogane v Bradford Teaching Hospitals NHS Foundation Trust the Employment Appeal Tribunal (EAT) has held that where the choice of selection criteria has the practical result that the selection for redundancy is made by that decision itself, consultation should take place before the selection criteria decision is made. It is not within the band of reasonable responses, in the absence of consultation, to adopt one criterion which simultaneously decides the pool of employees and which employee is to be dismissed. While a pool of one can be fair in appropriate circumstances, it should not be considered, without prior consultation.

In this case, Ms Mogane and another nurse in a similar role were employed on a series of fixed-term contracts. The employer decided to use a single selection criterion for redundancy, being whose fixed-term contract expired the soonest. This meant automatically that Ms Mogane would be selected for redundancy as her fixed-term contract expired first. A redundancy consultation process then began, which included consultation regarding the possibility of alternative employment, although this was not possible and she was dismissed.

Lessons for employers:

  1. If the reason for non-renewal of a fixed-term contract is a reduction in the need for employees to do work of a particular kind, then non-renewal is a dismissal for redundancy. It makes no difference that the employee knows in advance that the contract is unlikely to be renewed because the need is diminishing.
  2. In order for an employer to consult properly, it must have an open mind and still be capable of influence about the matters which form the subject matter of consultation.
  3. Where the choice of criteria adopted to select for redundancy has the practical result that the selection is made by that decision itself, consultation should take place prior to that decision being made. This is because, in order to be genuine and meaningful, consultation must take place at a formative stage when an employee can still potentially influence the outcome.

2. Long-COVID and disability two contrasting cases

Whether an employee suffering from long-COVID symptoms may be disabled within the meaning of section 6 of the Equality Act 2010 (EqA) will, as ever, be fact specific. We now have tribunal judgments considering this question with contrasting results.

In Burke v Turning Point Scotland, Mr Burke was employed as a caretaker from April 2001. 0n 15 November 2020, he tested positive for COVID-19. Initially, his symptoms were mild. However, after isolating, he developed severe headaches and fatigue. After waking, showering and dressing, he had to lie down to recover and struggled standing for long periods. He could not undertake household activities, like cooking, ironing and shopping. He experienced joint pain, a loss of appetite, a reduced ability to concentrate and difficulties sleeping. He also felt unable to socialise. The symptoms were unpredictable; he would experience improvement only to suffer from fatigue and exhaustion again. Nine months later, he was dismissed due to ill health.

In Quinn v Sense Scotland, Mrs Quinn was employed as Head of People from December 2019. She tested positive for COVID-19 on or around 11 July 2021. She subsequently experienced fatigue, shortness of breath, pain and discomfort, headaches, and brain fog. On 27 July 2021, she was dismissed from her employment. Six weeks after her dismissal she was diagnosed with long-COVID.

Both Mr Burke and Ms Quinn brought disability discrimination claims.

Mr Burke succeeded in his claim. In his case, the employer accepted that he had an "impairment" caused by COVID-19, but denied that it was "long-term". On the question of whether Mr Burke's symptoms were likely to last 12 months or more, the employer accepted that Mr Burke was too ill to work and its letter of dismissal referenced the fact that his prognosis was uncertain and he did not know when he would be able to return. On that basis, the Tribunal concluded that Mr Burke was more likely than not to suffer from long-COVID for at least a year.

However, Mrs Quinn failed in her claim. While the impairment of COVID-19 had a substantial adverse effect on her ability to carry out normal day-to-day activities, this effect had lasted only two and a half weeks at the time of her dismissal. The substantial majority of people who catch COVID-19 do not develop long-COVID. At the time of her dismissal, there was no evidence that Mrs Quinn's condition would develop into long-COVID and last 12 months or more. Her impairment was not therefore long-term, as defined in the EqA.

Lessons for employers:

  1. As decisions at tribunal level, they are of course non-binding, though useful illustrations as to how tribunals will approach cases concerning long-COVID. It is now clear that long-COVID is a genuine condition and employers will need to be sensitive to this.
  2. Each case will turn on its own facts. Not all long-COVID cases will amount to a disability, but many are likely to meet the statutory definition. Keeping an open mind and engaging in dialogue with employees will be key.

Legislation, consultations & services

3. Retained EU Law (Revocation and Reform) Bill

On 22 September 2022, the Retained EU Law (Revocation and Reform) Bill 2022-23 was introduced to the House of Commons, and written ministerial statements were made summarising the Bill's provisions.

The Bill will end the status of retained EU law from the end of 2023 and replace it with the concept of "assimilated law".

The Bill provides for the expiry of the majority of retained EU law with effect from 31 December 2023. All retained EU law contained in domestic secondary legislation and retained direct EU legislation will expire on this date, unless otherwise preserved. The Bill will also provide for the abolition of general principles of EU law from the end of 2023. Any retained EU law that remains in force after the sunset date will be "assimilated" in the domestic statute book, by the removal of "the special EU law features previously attached to it". This means that the principle of the supremacy of EU law, general principles of EU law, and directly effective EU rights will also end on 31 December 2023.

The Bill includes the possibility of an extension of the sunset until 2026 for specified pieces of retained EU law should the government require additional time to assess whether these pieces of retained EU law should be preserved.

If the Bill is passed, it will have a potential huge impact on employment law launching us into a period of uncertainty as we wait to see what the Government will choose to retain and possibly modify and what employment rights it will simply expire in 15 months' time.

Areas of EU retained employment law include:

  • The Working Time Regulations 1998 - paid annual holiday, 48 hour working week etc.
  • Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000
  • Fixed-term Workers Employees (Prevention of Less Favourable Treatment) Regulations 2002
  • Agency Worker Regulations 2010
  • Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).
  • Maternity and Parental Leave etc Regulations 1999 in relation to unpaid parental leave

For now, we wait to see what will happen.

4. Transport Strikes (Minimum Service Levels) Bill

On 20 October 2022, the controversial Transport Strikes (Minimum Service Levels) Bill had its first reading in the House of Commons. Under the Bill, trade unions will lose their immunity from liability for industrial action if they fail to take reasonable steps to ensure that the persons required to work in order to ensure the minimum service level do not take part in the strike.

If passed, the transport services to be subject to the requirement will be set out in subsequent regulations. Unsurprisingly, Unions are fighting the passing of this legislation.

5. Monitoring at work draft ICO guidance

The Information Commissioner's Office (ICO) is developing new guidance on employment practices in stages. On 12 October 2022, the first of the guidance was published for consultation, being the draft guidance on monitoring at work.

The draft guidance covers key topics such as lawful basis for monitoring, transparency, fairness and accountability. It also provides guidance on data protection impact assessments (DPIAs), security and retention as well as specialist topics such as covert monitoring, use of biometric data, call monitoring, dashcams and device activity.

It is open for consultation until 11 January 2023.

6. Support with employee health and disability

The Government has set up a new online service, Support with Employee Health and Disability, to help employers better support disabled people and those with health conditions in the workplace.

It is aimed at smaller businesses, but any employer can access the service, which provides free advice on how to support and manage staff who may be in or out of work with a disability or long-term health condition in a "user-friendly online Q&A format".

The website is currently in test mode, with businesses and disability groups invited to have their say through a short online survey, to help shape the future of the service.

7. Plan to consult further on exit pay for local government staff

On 7 September 2020 the then Ministry of Housing, Communities & Local Government - now the Department for Levelling Up, Housing and Communities (DLUHC) - launched a consultation seeking views on proposals for reforming exit payment terms for local government workers which closed on 9 November 2020. The consultation sought views on:

  • the effects that the proposals for reform (£95,000 cap etc.) would have on the regulations which currently governed exit payments in local government, including both redundancy compensation pay and early access to pensions; and
  • the impact that the proposals for reform would have on the local government workforce.

After the consultation was launched we had the Restriction of Public Sector Exit Payments Regulations 2020 (SI 2020/1122) (Cap Regulations) implemented on 4 November 2020 and then hastily repealed with retrospective effect on 19 March 2020 by the Restriction of Public Sector Exit Payments (Revocation) Regulations 2021 (SI 2021/197), as the provisions were practically unworkable.

On 8 September 2022, a short Response was given to the 2020 Consultation. The one paragraph response states that the DLUHC "plans to consult further on exit pay arrangements for local government staff and will take account of representations made in response to the [2020] consultation in its next consultation". No timescale for the new consultation has been provided.

Hot topics

8.Artificial intelligence

The House of Commons Science and Technology Committee has launched an inquiry into the governance of artificial intelligence (AI) and published a call for evidence to the inquiry.

In the inquiry, MPs will explore how risks posed to the public by the improper use of AI should be addressed, and how the Government can ensure AI is used in an ethical and responsible way.

The inquiry invites written submissions by 25 November 2022 on topics including:

  • The effectiveness of the current governance of AI in the UK;
  • How decisions involving AI should be reviewed and scrutinised in both public and private sectors;
  • How the use of AI should be regulated; and
  • The extent to which the legal framework for the use of AI, especially in making decisions, is fit for purpose and whether more legislation or better guidance is required.

At European level, on 28 September 2022, following a public consultation, the European Commission adopted proposals to address liability in the digital age.

The draft AI Liability Directive will establish harmonised rules for AI, which will help victims (either individuals or businesses) access compensation for damage caused by AI systems. The new rules will make it easier to obtain compensation for breaches of privacy, or damages caused by safety issues, as well as where there is discrimination in a recruitment process involving AI technology (unlawful discrimination based on algorithmic processing).

The legal process for victims when it comes to proving that someone's fault led to damage will be simplified through two main features. The first is a so-called "presumption of causality", where a relevant fault has been established and a causal link to the AI performance seems reasonably likely. The onus to explain in detail specifically how the harm was caused is a particular challenge to victims due to the complexity of AI systems. A "presumption of causality" will address these difficulties, and the complexity involved in understanding and navigating AI systems. The second feature is the provision of more tools for victims seeking legal reparation. In cases involving high-risk AI, a right of access to evidence from companies and suppliers will be introduced.

The European Parliament and the Council will need to formally adopt the AI Liability Directive under the ordinary legislative procedure before it can be published in the Official Journal of the European Union and enter into force. That is likely to take some considerable time.

9. Diversity, equality and inclusion initiatives

New research by XpertHR has found that 96% of businesses will undertake diversity, equity and inclusion (DEI) initiatives over the next 12 months. Nearly nine in ten businesses (89%) plan to embed DEI into their recruitment processes.

The study of 218 organisations between June and July 2022 also found that 84% of businesses have a strategy in place or plan to introduce one. Despite this, funding for these initiatives is found to be insufficient. Only 38% of businesses have a budget, or plan to allocate one, and only 36% of those businesses consider that the budget allocated is sufficient.

Mental health and wellbeing issues were the priority focus for 90% of respondents. Among businesses with plans to allocate budgets, the priorities are mental health (78%) and race or ethnicity (72%). For 60% of respondents, disability, gender and LGBTQ+ issues were the focus.

10. Gender balance in the boardroom

On 17 October 2022, the EU Council announced that it has approved an EU Directive to enhance the gender ratio on company boards by mandating that at least 40% of non-executive director positions in listed companies be held by members of the underrepresented sex by 2026. The Directive also notes companies must provide details about the gender representation on their boards and the measures they are taking to achieve the objectives of the Directive.

The new Directive enters into force on the 20th day following its publication in the Official Journal and will expire on 31 December 2038 (Article 14). Member States have two years following the entry into force of the Directive to adopt the required national measures (Article 11).