UK Employment Law Coffee Break: Join us at our age event, an update on employment law in 2023 and our pensions spotlight

Age – Hindrance or an opportunity to a fulfilling career?

We hope you will join us in our London office on Tuesday 21 February 2023 when guest speaker, Lucy Kellaway, will be joined by a panel made up of guests from Osborne Clarke and global asset management business PGIM to discuss ageism in the workplace. Stereotyping older people as being "over the hill" or making disparaging remarks about young people being "wet behind the ears" is fairly commonplace. Individual experiences will certainly differ, but one thing is clear: if we are motivated by change, we can make changes happen. The seminar will run between 16.00 and 18.30 and you can register here.  

An update on employment law challenges in 2023

On Wednesday 8 February we hosted our employment law webinar looking at the challenges for HR in 2023 – if you missed it, please do watch our recording.

We are expecting a number of legislative reforms impacting employers in 2023 (see our earlier Coffee Break) and provide a short update on the latest developments below.

The Retained EU Law Bill: legislative havoc or promised post-Brexit deregulation?

As the House of Lords begins its second reading of the controversial Retained EU Law (Revocation and Reform) Bill, we look at what the bill does, what needs to happen for it to become law, and what might happen once it is law. The bill could remove thousands of laws from the statute book at the end of 2023, and provides ministers with extraordinarily wide powers to remake law across wide areas of business regulation. It is on course to be law by as early as Easter 2023. Read more on this in our Insight.

Right to request predictable working patterns

The government is supporting a private members' bill giving all workers and employees the right to request predictable working patterns once they have worked for their employer for a specified period.

This period will be set out in regulations and is expected to be 26 weeks. The government press release states that given the proposals aim to support those with unpredictable contracts, workers will not have had to have worked continuously during that period. It is proposed that employers will have the option to refuse a request for  more predictable working pattern on specific grounds, such as the burden of additional costs to make changes, or there being insufficient work at times when the employee proposes to work, and that workers will be able to make up to two requests a year.   

Redundancy protection on pregnancy and maternity

The Protection from Redundancy (Pregnancy ad Family Leave) Bill passed successfully through the House of Commons on 3 February 2022 and will now undergo further scrutiny in the House of Lords.

Under current rules employers have an obligation to offer an employee on maternity leave, shared parental leave or adoption leave a suitable vacancy where one exists during a redundancy exercise. The new legislation will extend this redundancy protection to include pregnant women as well as new parents returning to work after a relevant form of leave. It is proposed that the new right will commence from the time an individual is pregnant and last until a child is 18 months.

Strikes: minimum service levels

The Strikes (Minimum Service Levels) Bill has also now completed its committee stage and third reading in the House of Commons and is now proceeding unamended to the House of Lords.

If enacted, the bill will allow the government to make regulations prescribing minimum service levels during a strike in the fields of health, transport, education, fire and rescue, border control, nuclear decommissioning and radioactive waste management services.

Ethnicity pay gap reporting

Although legislation on ethnicity pay gap reporting was ruled out for the time being in the government's response to the Commission on Race and Ethnic Disparities report, "Inclusive Britain" in 2022, it has been reported that the government still intends to publish guidance for employers on voluntary ethnicity pay gap reporting "in due course".

New government departments

Businesses should also be aware that on 7 February 2023, the prime minister announced the creation of four new government departments. As part of this, the Department for Business, Energy and Industrial Strategy (BEIS) will be split up and a new Department for Business and Trade (DBT) created which will "support growth by backing British businesses at home and abroad, promoting investment and championing free trade". The current understanding is that the DBT will oversee employment policy and regulation.

HR Pension spotlight: duty to make reasonable adjustments for disability  

The High Court has handed down an important decision on the relationship between leaving employment on ill health grounds and the employer's duty to make reasonable adjustments for disability (Royal Devon and Exeter Healthcare Trust).

A member who was considering ill-health retirement (IHR), was given a retirement estimate which overstated his benefits. He was awarded a tier 1 IHR pension but, when given the correct – and lower – pension figures, complained that he would not have retired if he had been provided with those figures. He argued that he had suffered a financial loss of about £645,000.

The ombudsman made an award of £1,000 for serious distress and inconvenience but rejected the claim for financial loss on the grounds that he felt the member – who had been eligible for a tier 1 IHR pension because he was "permanently incapable of efficiently discharging the duties of his employment" - would have had to leave his job due to ill health in any event.

It was not necessary to consider the employer's duty to make reasonable adjustments to the member's role in view of his disability because it would not have been possible for the member to qualify for tier 1 IHR and continue in his job. In addition, the fact that the member had not qualified for a tier 2 pension (for which it was necessary to meet the tier 1 condition and be permanently incapable of (any) regular employment of like duration), meant that he was capable of some employment and could apply for another role with the employer.

The member appealed to the High Court. The High Court decided that the ombudsman had made an error in law by equating the possibility of the member applying for another job on a competitive basis with the possibility of his employer offering him an alternative role pursuant to its duty to make reasonable adjustments. "[T]here is a material difference between the possibility of an employee with a disability being offered another role, pursuant to the employer's duty to make reasonable adjustments, and the possibility of such an employee obtaining another role through a process of competitive applications. Accordingly, the fact that [the member] was able to apply for another job competitively with other applicants is not an answer to the question of whether any loss was caused to [the member] flowing from the Trust's error in providing inflated IHR estimates. In rejecting the relevance of redeployment on the basis that it remained open to [the member] to apply for another job, therefore, I consider that the Ombudsman fell into an error of law". The judge referred the case back to the ombudsman to consider whether the member had suffered any financial loss because, in reliance on the original IHR estimate, he decided not to seek redeployment in another role.

Even where correct retirement estimates are provided, a member with a disability might complain (argue that they are worse off) if they only discover the option of redeployment after they have left employment. Another common complaint is that an employee in ill health was not given the opportunity to apply for IHR before their employment ended, whether that was by choice (resigning or accepting an option such as voluntary redundancy because they felt that was their only choice), or because they were dismissed on capability grounds.

Employers should review their ill-health procedures to make sure that the possibility of IHR is flagged in all suitable cases and that redeployment is properly considered as an alternative to retirement in cases where the employee has a disability. You might like to take legal advice on this point and on any other IHR-related questions you have. Your usual Osborne Clarke contact and Claire Rankin would be pleased to help.