We present to you the third of our quarterly updates for 2023. As we are entering the third quarter, it has been a reasonably quiet summer with regards to employment law, there are a few upcoming changes to be aware of, which are detailed below. We hope you enjoy this Autumn edition, specifically our sections on AI and Employment Law.

Artificial Intelligence in Employment Law
AI has been at the forefront of a lot of business owners minds recently. In August, the UK House of Commons published a briefing paper on AI and employment law. It covers how AI is used in the workplace and the interaction between existing employment laws and the use of AI.

Use of AI in the Workplace
The briefing paper looks at the use of AI or other algorithmic tools by employers to manage workers, specifically in the following areas:

  • Recruitment – to devise job adverts, source candidates and filter CVs. Some recruiters also use automatically scored tests as part of their recruitment process.
  • Task allocation and performance management – including rotas and performance evaluation.
  • Surveillance and monitoring of the workforce – monitoring productivity or health and safety.

There are no specific laws that explicitly regulate the use of AI in the workplace, however, business owners should be aware that there are several areas where AI may cause issues:

  • The duty of mutual trust and confidence between an employer and employee around pay, promotion and dismissal decisions, especially where AI is used to assist in those decisions.
  • Equalities Act 2010, which prohibits discrimination by employers on the grounds of a protected characteristic (such as sex, age, race or disability). There may be the potential for bias and discrimination when using AI systems, which may replicate existing discrimination.
  • Employment Rights Act 1996, when dealing with an unfair dismissal claim, AI decisions are difficult to comprehend due to the workings of decision algorithms being hard to explain. This will pose problems when attempting to explain or justify why a dismissal was made.
  • European Convention of Human Rights places restrictions on the use of surveillance tools to monitor workers. This would include AI technologies.
  • GDPR and Data Protection Act 2018 –Employers must ensure that the use of any AI tools to collect and process employee data is compliant with the data protection legislation.

Rather than introduce new legislation, the UK government aims to strike a balance by proposing a system of non-statutory principles which will be overseen and implemented by existing regulators. These are:

  • Safety, security, and robustness
  • Transparency and explainability
  • Fairness
  • Accountability and governance
  • Contestability and redress

The UK Government actually asked Chat GPT the following question “What will be the biggest problem with AI in employment law” to which it responded:

The biggest problem with AI in employment law is likely to be the potential for bias and discrimination. Here’s why:

  • Algorithmic Bias: If historical data contains biases related to race, gender, age, or other factors, AI algorithms may inadvertently perpetuate these biases when making employment-related decisions.
  • Lack of Transparency: AI algorithms can make it challenging to understand how they reach specific decisions. This can be problematic where it’s essential to determine why a particular decision was made.
  • Legal Liability: When biased or discriminatory decisions are made by AI systems the complex legal challenge is whether the responsibility lies with the employer, the AI system developers, or both.
  • Regulatory Framework: Governments and legal systems may need to adapt and create new frameworks to ensure fairness and compliance in AI-driven employment practices.
  • Data Privacy: Ensuring the privacy of this data and compliance with data protection laws is a significant concern, as AI often relies on vast amounts of data.
  • Unintended Consequences: The potential for mass unemployment due to automation or the creation of new types of employment relationships.

If you would like to discuss how AI may affect your business, please do get in touch.

The Workers (Predictable Terms and Conditions Act) 2023 – receives Royal Assent
Millions of workers right across the country will be given more say over their working patterns thanks to new laws supported by the Department for Business and Trade.

  • Millions of workers will have a say over their working patterns as the Workers (Predictable Terms and Conditions) Bill achieves Royal Assent.
  • Government-backed law gives all workers the legal right to request a predictable working pattern encouraging workers to begin conversations with their employers.
  • Follows a wave of wins for workers after a record National Minimum Wage uplift and boosts to employment protections for parents and unpaid carers.

Workers right across the country will be given more say over their working patterns thanks to new laws supported by the Department for Business and Trade. It is expected that the measures in the Act and the secondary legislation will come into force approximately a year after Royal Assent, to give employers time to prepare for the changes.

Why have Acas been so busy over the last year?
Acas have seen a record increase in demand for dispute resolution services between 1 April 2022 and 31 March 2023, this may be due to them still playing catch up from the Pandemic. They handled over 600 collective conciliations in 2022-23, compared to 500 the year before. 649,000 calls to the helpline and 105,000 early conciliation notifications.
Susan Clews, Acas’ Chief Executive, said “High inflation, the cost-of-living crisis and staff shortages over the past year have seen workplace tensions and large-scale disputes dominate the headlines, which have led to an increase in demand for our dispute resolution services.”

On a more positive note, they also helped over 72,000 individual dispute cases avoid the need to progress to a costly tribunal. The cost of workplace conflict in Britain estimated to be £28.5bn per year, which shows the continued importance of resolving disputes early so they do not reach this point.

Qualifying for Unfair Dismissal and Future Changes
For an employee to claim unfair dismissal in the UK, they are required to have two years continuous employment. Whilst there are some grounds for dismissal will always be regarded as unfair and which do not require a qualifying period (whistleblowing, trade union membership, asserting a statutory right etc.), essentially this means that an employee who has only been continuously employed for less than two years can be dismissed – provided the employer gives notice – on a whim and with no requirement for the employer to justify the decision.

This leaves the door open for employers to act unreasonably and leaves newer employees vulnerable with no legal recourse for unfair dismissal. With the possibility of Labour being on track to form a new Government in a year’s time, we could expect to see a shorter qualifying period, reverting to one-year as in 1997, or even an abolishment of the qualifying period altogether.

Regardless of whether it’s a day one right or just a shorter qualifying period, employers should anticipate changes to the qualifying period which will strengthen employment protection rights further in favour of employees.

A reminder of the three pieces of Family Friendly legislation which received Royal Assent earlier this year, which means they have been passed into law. The implementation of these Acts will not be immediate.

Neonatal Care (Leave and Pay) Act 2023 – received Royal Assent on 24th May 2023
The implementation of the Neonatal Care (Leave and Pay) Act 2023 is estimated to be in April 2025.

The Act will introduce two new rights: neonatal care leave and statutory neonatal care pay. Both rights would require the Secretary of State to pass regulations to bring them into force and specify the details of how they operate.

The right to neonatal leave would be a day one right, available to all employees. It would apply to parents of children who spend at least one week in neonatal care. The maximum duration of the leave and how and when it must be taken would be set by regulations but would be at least one week and the period in which it has be taken would last a minimum of 68 weeks starting from the date of the child’s birth.
The right to neonatal care pay, during periods of neonatal care leave, would be available to all employees with at least 26 weeks’ continuous service and whose weekly earnings are at or above the lower earnings limit. The level and duration of pay would be set by regulations but the limit that could be claimed would be at least 12 weeks.
Carers Leave Act 2023 – received Royal Assent on 24th May 2023
This law will be enacted in 2024, by which time you’ll need to be prepared to deliver changes, to the way you offer support to all unpaid carers in your workforce.

This bill will grant employees a new entitlement to take up to one weeks unpaid leave per year to provide/arrange care for dependents with long term care needs. This will be a day one right for all employees regardless of length of service. Carers taking this leave will not need to present how or for whom it will be used for.

Protection from Redundancy (Pregnancy and Family Leave) Act 2023 – received Royal Assent on 24th May 2023
This Act is expected to take effect in April 2025. It will increase the level of protection against redundancies for new and expectant mothers. Employers are already required to provide suitable replacement roles, if there are any, as an alternative to redundancy to workers on maternity, parental, or adoption leave. Employees that fit into this category should receive preferential treatment over other workers who could be made redundant.

This new measure enables the extension of this protection to expectant women who are not yet on maternity leave and to new parents who are returning to work after taking maternity, parental, or adoption leave. Redundancy protection periods will be extended to begin on the day an employee informs her employer that she is pregnant and end 18 months after the baby is born. This will give women an additional six months of protection.

We will keep you updated on whether any of these implementation dates are brought forward.

Equality Act – proposed amendment
This amendment to address harassment in the workplace will reintroduce rights that were repealed some years ago. The Worker Protection (Amendment of Equality Act 2010) Bill will extend employers’ duties to protect against sexual harassment and reintroduce protection (and businesses’ responsibility and therefore legal liability) for third-party harassment.

It will create a statutory duty requiring an employer to prevent sexual harassment of employees and workers and make the employer liable for the harassment committed by third parties; e.g. customers, service users, clients and, in education, students. This third-party liability applies to all forms of unlawful harassment; for example, racial harassment, offensive conduct based on age, sex or disability, etc.

Where sexual harassment occurs, as well as enforcement by the Equality and Human Rights Commission, an employment tribunal will be entitled to increase compensation in an individual harassment case by up to 25%.

These are duties to prevent, which means having a policy won’t be enough. So, in addition to amending dignity at work policies, organisations must make clear what is unacceptable, enforce those standards and be able to demonstrate that action is taken to tackle these issues when they arise.

Non-compete Clauses limited to three months – proposed amendment
The UK Government has announced its intention to limit the maximum length of post termination non-compete clauses to a statutory limit of just three months.

Changes have not yet been enshrined in law, but the government has promised legislation will be brought forward when parliamentary time allows. Notice periods and garden leave will not be affected by the limit.
The government hopes the action will improve innovation and boost the economy by allowing workers to start competing businesses or move to competitors, as well as facilitating recruitment.

Other restrictions such as non-poaching and non-solicitation, will not be affected by the changes.

The Office of the Whistleblower – yet to be introduced
A private member’s bill (from the House of Lords) on whistleblowing will (if introduced) repeal the current framework in the Public Interest Disclosure Act 1998 and introduce broader protection with a bigger range of penalties. The details of these changes have yet to be finalised.

This would result in significant changes to whistleblowing and speak-up policies and processes. The bill would create a new body – the Office of the Whistleblower – which would be given investigation powers and have the authority to order redress.

Holiday pay simplification for part year workers – update
When the long-awaited Supreme Court judgment was delivered in the case of Harpur Trust v Brazel, confirming that whether a permanent worker works a full or part year they are entitled to 5.6 weeks’ paid holiday entitlement, the challenges on how this would be calculated in practice was underestimated.
Another consultation is looking at proposals to simplify holiday calculations for those workers who don’t work a full year, such as term time workers or those on zero hours.
All workers, regardless of how much of the year they work, get 5.6 weeks leave annually, which can lead to those zero hours workers getting disproportionately more holiday than year-round colleagues.
There are now two proposed changed to holiday entitlement:

  • Simplifying the allocation, so the whole of the 5.6 weeks allowance is treated exactly the same, rather than the 4 week / 1.6 week split of the current rules;
  • the consultation is referring to the previously used 12.07% calculation. This is likely to be a relief for many employers with agency staff, because the current legal framework (which requires employees to be paid based on the average of the previous 52 working weeks) leaves them in a position where employees are potentially entitled to a higher rate of holiday pay than their normal rate of pay.

This proposal would seem to also benefit employees and workers with atypical working hours, as it would ensure they receive a higher amount of pay for each pay period.

These proposed changes to holiday pay and entitlement appear to be a step in the right direction for employers and simplify the existing framework. However, certainty on this cannot be assured until further details are provided on the proposal for how pay will be calculated. Watch this space for developments and how it might affect your business.
If you would like some further advice as to how this works in practice, please contact us on enquiries@sylobeyondhr.com or read our Holiday Calculations Advice Sheet.

Right to work checks – reminder
We have been reminding our clients that Right to Work checks should be completed on all employees and a record kept of when you saw the original documentation. This includes employees with UK passports.

There is now a permanent system of digital right to work checks in place. If an employee does not hold a UK passport, they use this link to get a code, which they share with their employer along with their birth date, the employer then uses this link for the check. However, if you do need some support or have not used the digital service, SYLO are happy to support you with this small but vital part of your onboarding process.

Finally…
As a valued contact of SYLO Beyond HR, we would like to continue to keep you updated on key topics which we feel would be of interest to you and your business, for example employment-related developments and hot topics, details of our online training programmes and our quarterly Employment Law updates.

Should you wish to opt-out of these, please just let us know.

We would like to take this opportunity to thank you for your continued support and, should you wish to explore any of the topics highlighted in this bulletin, we would be happy to discuss them further with you. Please drop us a line at enquiries@sylobeyondhr.com.