Littler Global Guide - United Kingdom - Q3 2022

Browse through brief employment and labor law updates from around the globe. Contact a Littler attorney for more information or view our global locations.

View all Q3 2022 Global Guide Quarterly updates   Download full Q3 2022 Global Guide Quarterly

Court of Appeal Confirms that Conduct of a Whistleblower is Separable from the Fact of Making a Protected Disclosure

Precedential Decision by Judiciary or Regulatory Agency

Authors: Ben Rouse, Associate, and Philip Cameron, Partner – GQ | Littler

On July 8, 2022, the UK Court of Appeal confirmed that the conduct of a whistleblower in making protected disclosures in an automatic unfair dismissal claim is separable from the fact of making such disclosures. This judgment means that employees who blow the whistle do not have blanket protection against dismissal when they have acted unreasonably in the manner in which they raised concerns. However, the Court of Appeal said that there were likely to be few cases where employers will be able to rely on upset or inherent criticism caused by whistleblowing as a separate and distinct reason for treatment, thus employers should tread carefully if considering this path.

Supreme Court Clarifies Holiday Pay Rules for Those on Permanent Contracts but Working Irregular Hours

Precedential Decision by Judiciary or Regulatory Agency

Authors: Ben Smith, Associate, and Philip Cameron, Partner – GQ | Littler

On July 20, 2022, the UK Supreme Court clarified the rules on calculating holiday pay for permanent employees and nonemployed workers who work irregular hours in the UK, such as term-time workers or “permanent irregular workers” (i.e., those on zero hours contracts). All employees and nonemployed workers in the UK are entitled to 5.6 weeks of statutory paid holiday per holiday year, although complex statutory rules means that how much employers should pay is difficult to calculate for Permanent Irregular Workers. Prior to this case, employers had often used a short-hand calculation to calculate paid holiday entitlement as that which accrues as hours are worked, which effectively pro-rated paid holiday entitlement to reflect the time actually worked over a year.

However, the Supreme Court concluded that this method shouldn’t be used and instead the value of the 5.6 weeks of paid holiday should be calculated using the “calendar week method” derived from statute. The calendar week method is a complex formula, but essentially requires employers to calculate an average week’s pay over a 52-week reference period ending with the start of the leave period (ignoring weeks in which no pay was received, and employers can look back up to a maximum of 104 weeks for relevant pay data) and then multiplying that average by 5.6. This decision increases the complexity of holiday pay calculations for employers in some cases and may result in anomalous outcomes where permanent irregular workers are entitled to disproportionately generous holiday pay compared to employees working full time. The government has indicated it may act to simplify holiday pay in the future, but no proposals have been made.

Court of Appeal Overturns Injunction Preventing Fire and Re-Hire of Employees

Precedential Decision by Judiciary or Regulatory Agency

Authors: Hannah Drury, Trainee Solicitor, Associate, and Philip Cameron, Partner – GQ | Littler

On July 15, 2022, the Court of Appeal (CA) overturned an injunction that had prevented a supermarket from using fire and re-hire to withdraw a right to “retained pay” that had been described in pre-contractual communications as “permanent” and “guaranteed for life”. The High Court (HC) had granted the injunction on the basis that use of the word “permanent” implied a term into the contract that the supermarket would not use its contractual right to terminate as a method of removing the employees’ right to retained pay.

On appeal, the CA held that although the supermarket had referred to the benefit as “permanent,” there was nothing to suggest that its intention had been to limit its ability to terminate the employees’ contracts. Unlike the HC, which focused on principles of fire and re-hire, the CA looked in depth at the contracts themselves and the communications surrounding the contracts to determine if the high hurdle for an implied term had been met in this case. In essence, the CA focused on the fact that an employer has an unfettered right to give notice of termination in line with the contractual notice provisions, whether or not that would deprive the employee of a “permanent” right. The remedy would lie in a claim for unfair or wrongful dismissal. This case is a useful reminder, however, that employers should be careful in the language they use when communicating with staff about the terms of their employment.

Proposed Law May Change the Future of UK’s Employment Law

Proposed Bill or Initiative

Authors: Stephanie Compson, Professional Support Lawyer, Associate, and Philip Cameron, Partner – GQ | Littler

On September 22, 2022, the Retained EU Law (Revocation and Reform) Bill was introduced into UK Parliament. The Government has said that if the bill is passed into law, it will end the special status of the “Retained EU Law,” which is a category of domestic law created at the end of the transition period of the UK exiting the EU and consists of EU-derived legislation that was preserved in UK law by the European Union (Withdrawal) Act 2018. Under this bill, the majority of Retained EU Law will be subject to “sunset provisions” so that it expires on December 31, 2023 (or June 23, 2026, if extended for specified laws), unless it is preserved in some form.

Additionally, the bill proposes to end the supremacy of EU Law over domestic UK legislation and create powers to restate, revoke or replace Retained EU Law. If the bill passes without amendment, it may have huge implications for EU-derived employment rights in the UK (such as those enshrined in the Working Time Regulations) depending on what Retained EU Laws the Government chooses to lose, keep, or change. The bill is in its early stages and has many more hurdles to get through before it becomes law. The next stage is due shortly where the bill will go for its second reading in the House of Commons and will be debated by Members of Parliament.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.