UK Employment Law Coffee Break: Age in the workplace, EAT rules on unwanted conduct, results from our cost of living survey and AI update

Pensions Spotlight: How is the cost of living crisis affecting your employees?

Our Pensions team recently circulated a survey to assess the practical impact of the cost of living crisis on employees. One thing is clear from the results – employees are facing difficult decisions about both their working arrangements and their savings, including their pension contributions.

More than a third of respondents report that they have had staff take on other work or ask for increased hours to boost their income, or ask for changes to their working arrangements to minimise their costs (such as working from home to reduce travel costs). A fifth say that they have had employees explore early retirement or pension transfers, which may indicate that some employees aged 55 or over are considering accessing pension money to provide them with additional income.

A third of respondents say that they have had staff asking to change their flexible benefits, although not necessarily to reduce their pension contributions. Of particular concern, however, is that the same proportion report that they have had staff ask to leave the pension scheme altogether, which may indicate that, in some cases, reducing contributions was not an option. These employees risk losing valuable employer contributions, future investment returns on the missed contributions and, potentially, the right to membership of a better scheme than the default pension provided to meet the automatic enrolment requirements.

To support such employees, it may be worth reviewing messaging around the pension scheme, to reinforce the importance of contributing and to highlight any options open to those facing financial pressures.

Employers may wish to review their pension contribution structure and explore options to introduce flexibility where they are able to do so. A more flexible solution that allows employees to reduce contributions without leaving the scheme entirely may enable them to prioritise their short-term financial needs, while mitigating the impact on their retirement outcomes.

If you would like support on these issues, please contact Claire Rankin, a Partner in our Pensions team, who will be pleased to help.

Our Age event

On 4 July we will be joined by Lyndsey Simpson, founder and CEO of 55/Redefined and Gavin Parker, Industry Director, Business and Professional Services team at Barclays to launch our new report "Providing for tomorrow today: understanding an Ageing Workforce".

Join Osborne Clarke and our keynote speakers as we share the results of our research and discuss the wider implications, challenges and issues of an ageing workforce. You can register your interest here.

Can a person’s dignity be violated even when they are not aware of the unwanted conduct?

The Employment Appeal Tribunal (EAT) has recently considered whether, for the purposes of a harassment claim, an employee's dignity can be violated even when they are not aware of the unwanted conduct, or whether only unwanted conduct of which they are aware can be taken into account.

In this particular case, the employee had become aware of derogatory comments about him during the course of an internal investigation into bullying and harassment complaints made against him. As a result of the derogatory comments discovered during the investigation, the employee brought his own internal grievance and subsequent Employment Tribunal (ET) claims, including a claim for harassment.

The ET dismissed the harassment claim (and others), finding:

• the disparaging comments could only have the effect of violating his dignity and creating an intimidating, hostile, degrading, humiliating or offensive environment for him once he became aware of them.
• However, at the investigation stage, it was not reasonable for the unwanted conduct to have the proscribed effect necessary to make out a harassment claim, as it was inevitable that in the course of a bullying and harassment investigation that things would emerge that the employee would not like.

The employee appealed, arguing that a person’s dignity could be violated even when they were not aware of the unwanted conduct on the basis that "dignity" means how an individual is held in esteem by those around them and thus can be violated without their direct knowledge. The EAT disagreed finding that "If there is no awareness, there can be no perception".

On the question of whether it was reasonable for the "unwanted conduct" to have the proscribed effect of violating the employees dignity, the EAT again dismissed the appeal, finding it was not reasonable for the comments to have that effect "simply because" they arose in the context of the investigation and agreed with the Employment Tribunal's findings that an employer should not be constrained in carrying out an investigation into the allegations of bullying and harassment against an employee because matters emerging from that investigation could then be alleged by the subject of the investigation to be “unwanted conduct”.

Similarly, the ET did not believe that interviewees should be constrained from answering the questions put to them in the course of an investigation, provided they do so truthfully in accordance with their own view of the matters under investigation. Viewed in this context, it was not considered reasonable for the “unwanted conduct” to have the proscribed effect on the employee.

It is reassuring for employers carrying out internal investigations that evidence given in good faith should not, in most cases, enable a successful harassment claim to be brought.

Claims for discrimination can, however, easily arise from any evidence given or comments made that are discriminatory and come to light during the course of an investigation. It is vital that all investigations are carried out with integrity and free from bias towards any of the parties involved. It is unavoidable that some of the comments made and evidence gathered during the course of an investigation is likely to upset the person against whom the allegations are made. It is therefore important that any evidence provided is honest and free from bias or prejudice and that it is made clear to all parties that, as part of a fair process, the evidence will be shared with the employee under investigation.

AI regulation: what is the latest position?

Our latest Insight looks at the status of EU, UK and international regulation of artificial intelligence (AI) following the vote of the European Parliament on the EU's draft AI Act last week. While we continue to keep watch on the proposed regulatory developments in the UK and overseas, it is worth highlighting that AI is not currently unregulated. To take one example – in the UK, where training data or usage involves personal data, the Data Protection Act may apply and the UK Information Commissioner's Office has issued specific and extensive guidance in relation to AI. 

AI risk is not only legal and regulatory in nature but also plays into corporate governance and ethics more generally and while we await further developments from a regulatory perspective, many employers are now looking actively at the impact of AI on their workplace practices. We look here at the implications of AI in the employment lifecycle.

We are seeing increasing interest from clients on the risks and opportunities AI presents in their workplace and what training and policies are required to support this; please do contact your usual Osborne Clarke contact or Partner Olivia Sinfield if you would like to discuss this further.