With Christmas approaching, the main changes in this month’s newsletter come from the much anticipated Autumn statement issued by the Chancellor, Jeremy Hunt. For any queries, please do not hesitate to contact our employment team. Happy holidays!
Employment Update 📰
Minimum wage increase
The minimum wage (also known as the national living wage) is set to increase in April 2024 to the following rates:
Age bracket Current rate New rate (from April 2024)
23 and over £10.42 £11.44
21 - 22 £10.18 £11.44
18 - 20 £7.49 £8.60
Under 18 £5.28 £6.40
Apprentice £5.28 £6.40
This is estimated to benefit 2.7 million low-paid workers. It is important that employers are ensuring that their employees are being paid at the correct rate from April 2024, to avoid claims for unlawful deductions from wages.
National Insurance to be cut
The Autumn statement has also outlined that employee national insurance contributions will be cut, with the main rate decreasing from 12% to 10% from 6 January 2024. It is anticipated that this will affect around 28 million people.
Flexible working to become a ‘day one right’ from April 2024
The Flexible Working (Amendment) Regulations 2023 were laid before Parliament on 11 December 2023. The new rights are set to come into effect for requests made on or after 6 April 2024.
The regulations remove the requirement for an employee to have 26 weeks’ service to bring a request for flexible working. The right to make a request will become a ‘day one right’. Employees will also be able to make any two flexible working requests in a 12 month period regardless of their length of service.
Redundancy protection – Pregnancy & Family Leave
The Maternity Leave, Adoption Leave and Shared Parental Leave (Amendment) Regulations 2024 have also been laid before Parliament. They will bring the Protection from Redundancy (Pregnancy and Family Leave) Act 2023 into operation. It is worth noting that the regulations are currently in draft format so may be subject to change.
Currently, parents on maternity, adoption or shared parental leave should be offered first refusal of any suitable alternative employment in a redundancy situation. The protection will be extended to cover:
- Maternity – the protected period will cover pregnancy and the 18 month period from the first day of the estimated week of childbirth. This can be changed to cover 18 months from the exact date of birth, if notice is given prior to the end of maternity leave.
- Adoption - the protected period will cover 18 months from placement for adoption.
- Shared parental leave - the protected period will cover 18 months from birth (provided that the parent has taken a period of at least 6 consecutive weeks of shared parental leave).
Carer’s leave
The Carer’s Leave Regulations 2024 have been laid before Parliament where the proposal is to make a request for up to one week’s unpaid carer’s leave in any 12 month period a day one right. The regulations are due to come into force on 6 April 2024.
Case Law Update 📢
SPI Spirits (UK) Ltd and anor v Zabelin - compensation is not always capped at what is contractually agreed.
Background
This case was recently heard in the EAT.
Mr Zabelin was employed from April 2017. In March 2020, due to the Covid-19 pandemic, the employer implemented a 30% pay cut for all employees for an initial period of 3 months. In June 2020, it was proposed that this would be extended to September 2020.
Mr Zabelin queried this and asked for further information as he did not want to agree to ‘further hardship’ without all of the required information. He stated that the cuts would be a breach of contract. He also had concerns as to the mental health of the employees and the effect that the cuts were having on them, as well as concerns with how the company was implementing such cuts, and whether they were entirely necessary. There were discissions between the parties and subsequently, Mr Zabelin was dismissed. He then brought various claims including unlawful detriment and automatic unfair dismissal for making protected disclosures.
The provisions within the employment contract stated that Mr Zabelin would be entitled to compensation of £270,000 upon termination (subject to a confidentiality and non-competition agreement). Mr Zabelin argued that his losses had been assessed at over £1.6 million pounds. The employer argued that the lower figure, as contained within the employment contract, was the ‘just and equitable’ amount of compensation that should have been awarded, as the provisions had been agreed between the parties.
Decision
The EAT decided that the employee’s compensation for both whistleblowing and automatic unfair dismissal was not to be capped at the amount stated in the employment contract.
The EAT rejected the argument that the lower amount was the ‘just and equitable’ amount of compensation to be awarded. They confirmed that holding the parties to that would be to exclude/limit the employee’s statutory employment rights, contrary to section 203 of the Employment Rights Act 1996.
It is therefore important that, when drafting contracts, employers be aware that provisions seeking to limit an employee’s statutory rights are unlikely to be upheld. Further, compensation awarded for successful claims involving whistleblowing are uncapped and therefore, if handled incorrectly, could result in a very costly exercise for an employer.
Thank you to our contributors: Phil Cookson, Desley Sherwin, Laura Hill and George Miller.