The new law provides special protection to pregnant women and employees that are returning from certain types of family leave in a redundancy situation. The Protection from Redundancy (Pregnancy and Family Leave) Bill received Royal Assent on 24 May 2023 and became the Protection from Redundancy (Pregnancy and Family Leave) Act 2023. The Act came into force on 24 July 2023.

What protection will employees be given?

The law provides greater protection to women that are on maternity leave or an employee that is on adoption or shared parental leave in a redundancy situation. In other words, before making a woman who is on maternity leave (or an employee on adoption or shared parental leave) redundant, an employer must offer a suitable alternative vacancy to them, where one is available.

Who will be protected?

The Act extends protection to:

Expectant mothers could be provided with a period of up to 24 months protection on the basis that they:

This works out as follows:

  1. Six months’ protection during pregnancy, plus
  2. Twelve months’ protection during maternity leave, plus
  3. Six months’ protection on their return to work.

What does it mean for Employers?

Employers are not required to take any immediate actions at the moment as the Guidance regarding the implementation of the Act is still awaited. The Guidance will provide further regulation explain how the new legislation will work. In the meantime, employers should be aware of the new Act but wait for the Regulations before implementing the Act.

In the meantime, Employers should consider the implications and update their policies to ensure they are compliant with the legislation and minimize the risk of potential discrimination claims on the grounds of pregnancy and/or maternity. Employers will be required to implement processes to identify the timeframe of earlier periods of maternity leave in redundancy situations, adopt systems to identify alternative suitable vacancies across the organisation and creating a supportive environment for employees returning from family leave.

If you require any employment advice, please contact our Employment Law team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk 

 

Is it possible to waive unknown future claims with a Settlement Agreement?

In Bathgate v Technip UK Ltd [2022] EAT 155, the Scottish Employment Appeal Tribunal (EAT) held that section 147 of the Equality Act 2010 does not allow a qualifying settlement agreement to settle future claims that are unknown to the parties at the time of entering into the agreement. In other words, a settlement agreement cannot waive future claims that have not happened yet.

In the aforementioned case, Mr. Bathgate accepted voluntary redundancy and signed a settlement agreement which provided for an enhanced redundancy payout and notice payment. In addition to these payments, the agreement referred to a potential “Additional Payment” to be paid at a later stage. The Additional Payment was to be calculated by reference to a collective agreement. However, the collective agreement predated age discrimination legislation and its terms stated that the payment would only be made to employees who had not yet reached the age of 61.

Despite Mr. Bathgate being 61 at the time of signing the agreement, he was under the impression that he was due to receive the Additional Payment. When his employer decided not to pay the Additional Payment to employees who were 61 or over at the time of their dismissal, Mr. Bathgate brought a claim of age discrimination.

The settlement agreement between the parties provided that the terms were in full and final settlement, and this included waiving claims for direct and indirect age discrimination under the Equality Act 2010. The employer therefore submitted that Mr. Bathgate had compromised his right to pursue a claim and argued that Mr. Bathgate’s age discrimination claim has already been validly settled under the terms of the settlement agreement. The Employment Tribunal sided with the employer and rejected Mr. Bathgate’s claims.

Mr. Bathgate appealed the tribunal’s decision and argued that as he did not know of the age discrimination claim at the date of signing the agreement, he was unable to waive the right to bring a future claim to the tribunal. The appeal was allowed.

The employer’s reliance on the fact that age discrimination complaints had been included in the long list of claims being waived by way of the Settlement Agreement was not allowed. In other words, it did not mean that this particular age discrimination complaint had been identified in the settlement agreement. The EAT reiterated the provisions of s. 203 of the Employment Rights Act, specifically that settlement agreements should only be able to settle a particular complaint (s.147 of the Act) that has already arisen between the parties. Mr. Bathgate could not be expected to sign away his right to claim age discrimination before he knew whether he had a claim or not.

Although such a strict interpretation may be inconvenient where both parties wish to avoid future claims, the Parliament did not consider this desirable, and it had legislated to prevent it. 

 Implications and practical considerations

Although the decision in Bathgate v Technip UK Ltd and others was handed down by the Scottish EAT, the case creates a binding precedent for Tribunals in England and Wales. In light of this recent development, employers should be cautious that settlement agreements may not always achieve the desired ‘clean break’ outcome. To mitigate potential litigation risks concerning settlement agreements, employers should explicitly set out the circumstances that have led to the settlement agreement and capture any specific complaints in as much detail as possible. In any event, the employer is still left with the risk of an employee bringing a claim that exists outside the scope of a settlement agreement. Therefore, in practice, it is very unlikely for there to be a significant change in the way settlement agreements are drafted.

 Nonetheless, an employer may still wish to follow practical steps to avoid future litigations concerning settlement agreements. These include seeking a warranty from the employee to confirm that there are no additional claims that the employee is aware of and has no intention of bringing any additional claims in the future. It may also be prudent to resolve any contentious points between the parties prior to entering the settlement agreement so as to avoid the possibility of any future dispute. This includes specifying details of payments and any conditions attached to it to avoid any confusion at a later stage. In addition, if there is a gap between the employee signing the settlement agreement and the employee’s termination date, it is recommended that the employee signs a reaffirmation letter on or shortly after the termination date to re-confirm that they waive the claims specified under the agreement.

For further advice and assistance please contact our Employment Law team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk

The Coronavirus Job Retention Scheme, known colloquially as the ‘furlough leave’ scheme, will end on 30th September 2021. The scheme, which has been in place since March 2020, has been extensively used by employers throughout the UK; as of 14th July 2021, approximately 11.6 million jobs from 1.3 million different employers were furloughed. By the end of the scheme, it is estimated that the UK government will have spent up to £80 billion on payments. The latest available data shows that 1.9 million workers were still on furlough at the end of June. The Institute for Employment Studies is reporting that many employees on furlough may face redundancy at the end of the scheme. An employer contemplating redundancies would need to consider the following:

1.     Is it a genuine redundancy situation?

Section 139(1) of the Employment Rights Act 1996 confirms that a genuine redundancy situation exists if the employer:

·         Is closing the business for which the employee was employed; or

·         Is closing the specific location at which the employee was employed to work; or

·         No longer needs the employee’s role to be carried out; or

·         Needs fewer people to carry out work of a particular kind

It goes without saying that ‘redundancy’ should not be used as an excuse to dismiss an employee who has bad performance or a poor attendance record or who has committed misconduct.

 

2.     Warn the employees of the potential redundancies

An employer is required to explain the reason for the redundancy situation and the potential impact that this will have on the affected employee/s.

 

3.     Create and apply a fair selection pool (and non-discriminatory scoring criteria)

If an employer is closing a business, or only removing one role (or one specific role) from the business organisation, there will generally be little need to select which employee is to be made redundant. However, if the employer is reducing the number of employees it requires, the employer will need to be able to justify which employee is subsequently selected for redundancy. Possible selection criteria can include such things as the employee’s performance (if supported by objective data) and/or their disciplinary records etc.

 

4.     Consult with employees

If more than 20 employees are to be made redundant within 90 days, an employer’s consultation obligations are more specific and require the appointment of employee representatives with whom the employer should consult. If there are fewer than 20 employees, the employer should consult and meet with the employees directly, explaining why they have been selected for redundancy.

 

5.     Explore suitable alternative employment options.

Just because an employee has been selected to be made redundant does not mean that the employee should be made redundant. The employer should then consider whether there are any suitable alternative roles available for the employee within the business, taking in to account the skills, experience, and current terms and conditions of the employee.

 

6.   Dismissal

If, after following the above and exploring all the options, there are no suitable alternatives, an employer can take steps to dismiss the employee. The employer can invite the affected employee to another meeting and clearly explain the decision. The employer should then write to the employee to confirm the dismissal, clearly stating their termination date. An employer should also generally offer the employee a right of appeal.

An employee who will have two years’ service by the termination date and who is working their notice for redundancy is entitled to reasonable time off to look for another job.

 

7.    Redundancy Payments

An employer can either have the employee serve their period of notice, or pay the employee in lieu of them working it. The employee should also receive payment for any accrued but untaken holiday entitlement.

An employee has the right to statutory redundancy pay if they have been employed for two years or more. This amount is based on their age and length of service, at a maximum of £544.00 per week for 30 weeks. The maximum statutory redundancy pay an employee can currently receive is £16,320.00.

Some employers offer an enhanced redundancy payment under what is known as a Settlement Agreement. A Settlement Agreement confirms that the employee waives their rights to bring any claim against their employer for any alleged breach of their employment rights, usually in exchange for some enhanced payment. For a Settlement Agreement to be valid and binding, an employee must take legal advice on its terms, something on which Franklins Solicitors LLP can advise you upon.

 

If you are an employer considering making redundancies, or an employee who has been made redundant or is being offered a Settlement Agreement please contact Ben Stanton on 01908 660966 / 01604 828282 or by emailing ben.stanton@franklins-sols.co.uk.