Welcome and thank you for reading our employment update - summer edition. It's been a busy first half of the year for employers with a lot to keep across. We aim to help you to stay up to date with recent changes, to summarise some of the key developments and keep a watchful eye on trends. Most recently we have taken a deep dive into the latest sickness data released by the ONS to explore the patterns and trends last year, and over the last decade. This provides an insightful look at how absence impacts businesses across the UK and Northern Ireland, as well as how trends vary by industry and evolve over time.
In this blog, we delve into the data and share some commentary on the factors that may be driving the patterns we’re seeing.
Our data analysis has been used to support a range of editorial features recently, with angles focusing on the 22.5 million sick days lost in the Southeast in 2024, the disproportionate impact on part-time workers and employee's that are in emotionally demanding sectors such as healthcare, education and administration, the rise in sickness absence among women and the fact that Gen Z workers are taking less sick days than any other. You can read further on this in articles on Southeast Business, Be Your Own, and the Brighton and Hove Economic Partnership to name a few.
Keep reading for more helpful insights.
Court of Appeal agrees with EAT that Ofsted inspector dismissed for brushing water off a child’s head was unfairly dismissed
The recent Court of Appeal judgment in Hewston v Ofsted serves as a reminder to employers of the importance of using policies to set clear workplace standards. It also shows that, if an act isn’t misconduct, an employer cannot throw other factors (such as reputational damage and a lack of ‘insight’) into the mix to bump it up. In this case, the Claimant, an experienced Ofsted inspector with a clean disciplinary record, was summarily dismissed after touching a pupil’s forehead and shoulder to remove rainwater.
Touching a pupil was not listed as an example of gross misconduct in the Respondent’s policies, there was no inappropriate motive behind the touching and the Respondent failed to provide the Claimant with several key documents during the disciplinary process, including the pupil’s complaint and the school’s report into it.
Upholding the Employment Appeal Tribunal’s finding of unfair dismissal, the Court of Appeal gave a useful restatement of the principles applying to conduct dismissals:
- Examples of gross misconduct are generally listed in disciplinary policies. If something is not included in the list, this does not automatically mean that an employer cannot summarily dismiss for it.
- However, if the act is unlisted, it will be critical to the fairness of any dismissal to consider whether the employee could reasonably expect the employer to regard the act as serious misconduct having regard to the nature of the act and the surrounding circumstances. In this case, it was held that the Claimant could not reasonably have expected the Respondent to regard the act as serious misconduct given the context.
- An employer should not be able to bump up the seriousness of conduct which is not capable of justifying dismissal just because the employee failed to show contrition. Given the conduct was not capable of justifying dismissal, the Claimant’s lack of contrition could not ‘bump up’ the seriousness of the conduct.
- Loss of trust and confidence and the risk of reputational harm can be a relevant factor in reaching a disciplinary sanction but “it cannot be a stand-alone basis for such a decision; there must at least be some misconduct”.
- Employees should be provided with copies of all documents relevant to anything in dispute in the disciplinary process prior to any decision being reached.
Employment Rights Bill - Changes to collective redundancy provisions
The current legal position on collective redundancy is fairly clear:
- Wherever an employer proposes to make 20 or more employees redundant at any one establishment within 90 days then an obligation to collectively consult with appropriate representatives is engaged.
- The length of consultation depends on the number of redundancies being made: at least 30 days for 20-99 redundancies, and at least 45 days where 100 or more redundancies are proposed. The meaning of the term ‘establishment’ has been the subject of several significant cases, the most well-known being USDAW v WW Realisation (1) Limited and Ethel Austin, better known as the ‘Woolworths case’. In this case, the ECJ looked at the question of whether each Woolworths branch was a separate ‘establishment’ or whether the business should be looked at as a whole. It decided that each branch could be treated as a separate establishment which meant that, as most branches had fewer than 20 employees, the obligation to collectively consult did not arise.
- Where an employer breached its collective consultation obligations, employees (or their representatives) are able to bring a claim for a protective award of up to 90 days gross pay (uncapped).
This all looks increasingly likely to change under the Employment Rights Bill. The Government recently published its response to its consultation on strengthening remedies against abuse of rules on collective redundancy and fire and rehire. Key points to note from the response include:
- The cap on protective awards in collective redundancy situations will be increased from 90 days at present to 180 days to encourage employer compliance.
- A proposal that interim relief should be available in claims for protective awards and/or claims for unfair dismissal on grounds of fire and re-hire (which are to be introduced in the Employment Rights Bill) will not be taken forward. The government acknowledged that this would place undue burdens on businesses and tribunals.
When the Employment Rights Bill was first published, it included a proposal to remove the concept of ‘establishment’ from the definition of collective redundancy. This would’ve meant that collective consultation would’ve been engaged whenever the total number of redundancies across a business was 20 or more, even if each site was making fewer than 20 redundancies. The proposal to remove ‘any one establishment’ from collective redundancy rules has been changed. The revised plan reinstates the ‘one establishment’ concept but allows regulations to set an alternative threshold for collective consultation to bite when redundancies occur across multiple sites. The alternative threshold is likely to be based on redundancies across the business as a whole and could be a percentage, or a higher number than 20. We will have to wait for regulations to know what this number (and/or percentage) will be.
Single enforcement body for employment rights: Fair Work Agency begins to take shape
When Labour’s Plan to Make Work Pay included a pledge to create a single enforcement body for employment rights, it constituted one of the party’s less eye-catching proposals for reform. However, as the role of the ‘Fair Work Agency’ (as it will be called) begins to take shape under the provisions of the Employment Rights Bill, what is emerging is significantly more striking than might have initially been thought. The Amendment Paper includes significant strides to increase the Fair Work Agency’s role. In particular, it will be able to:
- Bring Employment Tribunal claims on behalf of a worker if the worker has the right to make a claim but chooses not to.
- Offer claimants legal assistance for employment cases, with the cost of this being recoverable from the other side should the claim be successful.
- Enforce failure to keep adequate records of holiday pay for six years – through prosecution and potentially unlimited fines.
- Enforce failure to pay some statutory payments including holiday pay and sick pay by issuing a notice of underpayment. The amount payable in the notice must be paid within 28 days, alongside a penalty payment which must be paid direct to the government. This proposal would bring these statutory entitlements in line with the regime which is already in place to cover national minimum wage.
These are all government amendments, which means they have a good chance of making their way into the final Bill. The implications for employers are potentially huge.
It could fundamentally alter the dynamics of employment litigation in the areas covered by it. For example, an employer hoping to rely on worker loyalty or indifference to keep claims at bay may find that the FWA, seeing a worker’s reticence to claim, simply brings the claim itself. The commercial considerations involved in defending a tribunal claim where the FWA is involved will need to include the additional risk of having to pay the FWA’s costs.
It is early days, and we are a long way off these proposals taking effect. Their eventual impact is likely to be largely dependent on the level of funding and resourcing which the FWA is given to realise its powers.
Government provides clarity on the future of Statutory Sick Pay
Statutory Sick Pay (SSP) is the amount payable by employers when an employee is absent from work due to sickness. It is currently set at a flat rate of £118.75 (from 6th April 2025). There are certain eligibility requirements, including the fact that SSP is not currently payable during the first three days of absence, known as ‘waiting days’ and that those earning below the Lower Earnings Limit (LEL) - £125 per week – were not eligible.
The Employment Rights Bill proposes changes to SSP rules. In particular:
- The concept of ‘waiting days’ will disappear. Eligible employees will receive SSP from their first day of absence.
- Those earning below the LEL will now be eligible to receive SSP.
Acknowledging that the rate of SSP would need to be adjusted for those earning less than the LEL, the Government launched a consultation at the back end of last year focused on establishing what percentage of earnings should be used to calculate SSP for these workers. In its response, the Government has concluded that the appropriate percentage rate for SSP is 80% of the SSP flat rate, where 80% of an employee’s normal weekly earnings is less than the flat rate. To give a real-world example, if an employee earns £100 per week, then they earn below the LEL (and below the current weekly flat rate for SSP). Under the new rules they would be entitled to receive 80% of £100 (or £80) per week as an SSP payment.
What happens to employees when a business becomes insolvent?
Business insolvencies in early 2025 increased 11% from last year, with many companies facing financial distress. For HR professionals, understanding the employment implications of insolvency is crucial. Here’s what happens when a business goes into administration, is sold out of administration, or enters liquidation.
Administration: A temporary measure
Administration is meant to protect a company from creditors while attempting a rescue or sale. An insolvency practitioner takes control, often keeping the business running to maximise value. Employees usually stay in their roles, but redundancies may occur if cost-cutting is needed.
If 20 or more redundancies are proposed, collective consultation obligations apply, and insolvency alone is not a defence for failing to consult. Employers should follow proper processes where possible to limit liability. Redundancy procedures should be reviewed to ensure compliance.
Sale out of administration: what happens to employees?
If the business is sold as a going concern out of administration, the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) may apply, transferring employees to the new employer. However, in insolvency there are a few tweaks to the impact of TUPE:
- Employees can claim wages and holiday pay (up to 8 weeks, capped at a week’s pay per week as per statutory redundancy figures) from the Insolvency Service. Any excess liability usually transfers to the buyer.
- Normally, TUPE prevents contract changes, but in administration, terms can be renegotiated if agreed by employee representatives to help the business survive.
- Consultation with employees remains mandatory, though there is a limited special circumstances defence. HR should make every effort to consult even within tight timeframes.
Liquidation: the end of the road
Liquidation means the company ceases trading, and all employees are dismissed. Employees can claim for unpaid wages, notice pay, redundancy pay, and holiday pay through the Insolvency Service. However, payments are capped, and employees may not recover the full amount owed.
Neurodivergence: legal responsibilities of employers
Employers have legal obligations under the Equality Act 2010 to support neurodivergent employees.
Neurodivergence as a disability
Neurodivergence covers conditions like autism, ADHD, and dyslexia, all of which affect individuals differently. Whether a condition is a disability depends on its substantial and long-term impact on daily activities, such as communication and social interaction. If it meets this threshold, employees are legally entitled to:
- Reasonable adjustments
- Protection from discrimination
- Fair treatment unless objectively justified
- A workplace free from harassment
The impact of ‘masking’
Many neurodivergent employees mask their condition, appearing neurotypical while struggling internally. Government guidance confirms that coping mechanisms can break down, particularly under stress. The impact of the condition should be considered without coping strategies if it is possible that these will break down. Employers must also consider environmental factors like noise, lighting and fatigue when assessing workplace impact.
Reasonable adjustments
Employers have a positive duty to remove workplace barriers for neurodivergent employees. Adjustments might include:
- Flexible working (adjusted hours, remote work)
- Quiet spaces to reduce sensory overload
- Clear, structured communication
- Assistive technology such as noise-cancelling headphones
- Extra time for tasks or training
Every individual is different, so open dialogue is key.
Tribunal cases: getting it wrong can be costly
There are several tribunal cases which highlight the consequences of failing to support neurodivergent employees:
- Sherbourne v N Power: the claimant had Asperger’s syndrome and was required to work in an open plan setting with a busy walkway behind him; this caused him to feel overwhelmed and distracted. An employment tribunal found that there had been a failure to implement reasonable adjustments to the physical workplace.
- Borg-Neal v Lloyds Bank: Dyslexic claimant awarded £500,000 after being dismissed for using a racial slur in a training session, claiming his condition prevented him from finding an alternative phrase quickly.
- Jandu v Marks & Spencer: Tribunal ruled that failure to adjust selection criteria for a dyslexic employee in a redundancy process was unlawful. The Claimant was awarded £54,000
Summary
- Neurodivergence can be a disability - Employers must assess each case individually.
- Reasonable adjustments should be considered - Simple changes can remove barriers and improve inclusion.
- Ignoring legal duties is costly – Tribunal claims are rising, and failing to accommodate neurodivergent employees can result in significant compensation awards.
Redundancy and Re-Employment
Redundancy doesn’t always mean the end of employment. Offering alternative roles - whether before notice, during notice, or even after dismissal - can help retain talent. However, it must be handled correctly to avoid legal risks.
Before giving notice
The search for alternative employment should start early in the consultation process. If an employee accepts a new role before notice is given, there’s no dismissal—just a contract update. However, if they reject a suitable role unreasonably, they may lose their right to a redundancy payment (s141 Employment Rights Act 1996).
To withhold redundancy pay, the employer must:
- Make a formal job offer (not just a casual mention).
- Provide clear details on pay, responsibilities, and terms.
- Ensure the role starts immediately after, or within four weeks of, termination.
During the notice period
The duty to search for alternative roles continues throughout notice. If an employee accepts a new role, they enter a statutory four-week trial period (s138 ERA). If the trial fails, redundancy rights remain, unless the refusal was unreasonable.
After employment ends
Once dismissed, employers no longer have a legal duty to offer alternative roles, but re-hiring is an option. Key considerations include:
- Continuity of service - A break of over one week (Sunday to Saturday) resets employment rights.
- Redundancy pay - Rehired employees keep their redundancy pay but must build up two years’ service again for future entitlements.
- HMRC scrutiny - Rapid re-hiring may raise tax avoidance concerns; be prepared to justify the redundancy.
- Advertising new roles - If recruiting for a similar role too soon, an ex-employee could challenge the redundancy’s legitimacy. Waiting for the three-month tribunal claim window to expire is safest.
Top tips
- Put offers in writing - Include job title, salary, location, and trial period terms.
- Consider a trial period - This can encourage acceptance and clarify employment terms.
- Don’t force alternative employment - Pushing an unwanted role may lead to constructive dismissal (if the employee resigns in response to the (likely) repudiatory breach) and/or a Hogg v Dover College dismissal, in which case the employee can continue to work in the new role (with continuity of employment intact) whilst bringing a claim for unfair dismissal and redundancy pay in respect of the old role.
Handled well, alternative employment can be used to retain skills and reduce redundancies.
BBC settles discrimination claims ‘on the steps’
Settling employment disputes often boils down to ‘who blinks first’. A claim is issued. Both parties put their respective positions on the record. But what often prompts settlement of disputes are considerations that you won’t find on the face of the pleadings. For the employer - commercial sensitivities and the risk of adverse publicity. For the employee – balancing ‘having their day in court’ against the settlement sums on offer and (usually non-recoverable) costs of litigation.
Sometimes the settlement ‘dance’ is done and dusted quickly. Both parties size each other up and come to terms. However, many cases get tantalisingly close to the hearing before terms are agreed. A case in point is the recent discrimination case brought by four female news presenters against the BBC. The case settled, just a week before it was due to begin.
Four female newsreaders alleged that they had been discriminated against in a restructuring and recruitment process for lead presenters at BBC News. The i Newspaper quoted an insider who stated: “They needed to get this resolved before Monday,” an insider said. “There were witness statements ready and senior news managers would have had to account for their actions.”
The BBC said it had not accepted any liability over the claims made by the women in settling case. However, it is understood that the agreement includes an undisclosed payment to the presenters.
This case is a reminder of the different considerations at play when settling tribunal claims. It does not start and end with an exposition of the legal risks. It involves many other nuanced concepts including commercial sensitivity, preserving ongoing relationships, cost (the BBC case was listed for three weeks in the tribunal) and the potential for reputational damage. As the insider quoted in the i Newspaper stated: “There would have been claim and counter-claim between the BBC and the women in public. Then viewers would see the newsreaders back on screens. It would have been very damaging, so the settlement is better for all.”
Whenever a claim is received from an employee, the employer should take a view on each of these factors when deciding on a strategy for defending the claim.
‘Sir …that was my chair’ – are we at work or back in primary school?
And finally, a tribunal has found that forcing a senior employee to sit at a desk which was viewed as a ‘junior’ desk can amount to constructive dismissal.
A constructive dismissal occurs where an employee resigns in response to a fundamental breach of contract by the employer. Often, the breach relied upon is a breach by the employer of the implied term of trust and confidence which underpins the employment relationship.
In Walker v Robsons (Rickmansworth) Limited, the Claimant was a director at an estate agency, holding the position of branch manager. In the branch in which he worked, the back desk was informally reserved for the branch manager, with more junior employees sitting in the middle. After a period spent working at a different branch, the Claimant returned to the branch and was told to sit at a middle desk. The Claimant was upset about the desk he was given, perceiving this as the desk for the assistant manager. He resigned and claimed constructive dismissal.
The Tribunal found that moving the Claimant to the middle desk was conduct likely to destroy or seriously damage the relationship of trust and confidence. It was reasonable for the Claimant to view this as a demotion. In fact, the desk faux pas had been completely unintentional by the employer (a result of poor communication). This made no difference – the Claimant had reasonably believed that the desk move constituted a demotion and resigned in response. His claim succeeded.
Workplaces are funny places, full of their own in-jokes and subtexts. This case is a lesson to employers to make sure that they understand the particular politics at work in their workplaces, no matter how silly or trivial they may seem from the outside. It might be a special mug reserved for a certain employee or, as in this case, an unwritten seating arrangement which dictated seniority.