Protect business interests Archives

Employment settlement agreements: Key considerations

Posted on 18 March 20259 April 2025 by Sarah O'Sullivan

Employment settlement agreements are legally binding contracts between an employer and an employee that include the terms of an agreed departure or resolution of a dispute. These agreements, previously known as compromise agreements, allow employees to waive certain employment rights in exchange for compensation or other benefits. Understanding your rights and obligations before signing one is crucial.

Key features of settlement agreement

Voluntary Participation: Both the employer and employee must enter into the agreement willingly and the employee should not be coerced or placed under undue pressure
Independent Legal Advice: Employees must seek independent legal advice to ensure they understand the terms
Written Agreement: To be legally enforceable, the agreement must be in writing
Settlement of Specific Claims: The document must clearly state which claims are being settled to prevent future disputes

How long do you have to consider a settlement offer?

A common concern for employers and employees is how long to offer for time to consider an offer before making a decision. The guidance from ACAS (the Advisory, Conciliation and Arbitration Service) suggests a 10-day period to review a written settlement agreement.

However, recent case law has provided clarification on verbal offers and deadlines.

In Gallagher v McKinnon’s Auto and Tyres Ltd [2024] EAT 174, the Employment Appeal Tribunal (EAT) ruled that an employer giving an employee a 48-hour deadline to accept a verbal settlement offer did not amount to undue pressure or improper behaviour. The Tribunal clarified that the ACAS-recommended 10-day timeline applies to written offers, not verbal ones. While employees should be given reasonable time to consider offers, a shorter deadline for verbal agreements is not automatically considered coercive or unfair.

Why employers and employees use settlement agreements

Employers may offer a settlement agreement to:

Avoid lengthy and costly tribunal claims
Protect business interests by including confidentiality clauses
Ensure a clean break with no further claims

Employees may benefit from a settlement agreement by:

Receiving financial compensation beyond statutory redundancy pay
Avoiding the uncertainty of a tribunal claim
Negotiating better exit terms (e.g., a reference letter or extended notice period)

Seek expert legal advice before signing

While settlement agreements can be beneficial to both parties, they must be compliant with, amongst other things, section 203 of the Employment Rights Act to validly settle statutory claims (such as unfair dismissal and unlawful discrimination) it’s essential for employers to prepare these in a way that complies with applicable legal obligations and for employees to be able to fully understand what rights are being waived. Seeking independent legal advice ensures that the agreement is fair and that you are not accepting an offer under undue pressure.

If you are dealing with exit terms and a settlement agreement, Tees Law is here to help. Our experienced employment law specialists can prepare, review and advise on such agreements and the best course of action.

Should whistleblowing protections be extended to all job applicants?

Posted on 22 February 202521 March 2025 by Sarah O'Sullivan

A case referred to the Court of Appeal is set to determine whether all job applicants should be legally protected under whistleblowing laws. The outcome could have important implications for recruitment and workplace accountability for the treatment of job applicants across the UK.

The current legal landscape

At present, UK whistleblowing laws—primarily governed by the Employment Rights Act 1996 (ERA 1996)—do not extend to most job applicants. The only exception is NHS job applicants, who are protected if they have made a “protected disclosure” (i.e. reported, in the public interest, one of a number of qualifying disclosures such as that a criminal offence has been committed, or is likely to be committed, and/or that a person has failed, is failing or is likely to fail to comply with any legal obligation to which they are subject).

Other categories of workers, such as agency workers and those on work experience, are covered by whistleblowing protections when applying for roles in the NHS.

External job seekers in other sectors do not have such protection. Employers are unwilling to employ applicants who have previously blown the whistle. Individuals may be blocked from continuing their careers in their chosen fields or face glass ceilings.

Some employers, rather than seeing whistleblowers as ethical and principled individuals, may view them as potential risks. If an applicant has previously exposed wrongdoing, recruiters may be hesitant to hire them.

Without legal protection, whistleblowers can be silenced by exclusion from employment opportunities, discouraging others from speaking up about unlawful or unethical practices in the workplace.

The case at the Court of Appeal

The UK’s leading whistleblowing charity, Protect, has intervened in this case at the Court of Appeal in an effort to extend legal protection to all external job applicants. Represented pro bono by Farrer & Co and Claire Darwin KC and Nathan Roberts of Matrix Chambers, Protect argues that whistleblowing laws should cover individuals applying for jobs, ensuring they cannot be discriminated against or blacklisted for having previously raised public interest concerns.

The key legal question being considered is whether external job applicants should be covered by whistleblowing laws if they have made a protected disclosure during the job application process?

Protect’s intervention highlights the broader public policy implications of the case, including:

Encouraging whistleblowing – If job applicants fear career-ending retaliation, fewer people will come forward to report serious wrongdoing.
Ending blacklisting – Expanding protections would help prevent unfair discrimination against individuals who have previously blown the whistle.
Ensuring fair recruitment practices – Employers should evaluate candidates on their skills and experience, rather than penalising them for past whistleblowing.

Why this matters for employers and employees

If the Court of Appeal rules in favour of extending whistleblowing protections, employers will need to ensure that recruitment processes and decisions are legally compliant and transparent. Businesses would need to be aware of their obligations under an expanded legal framework and take steps to prevent detrimental treatment of whistleblowers.

What comes next?

The outcome of this case could reshape UK whistleblowing law. If the Court of Appeal agrees with Protect’s position, we could see new legal protections for job applicants who speak out about wrongdoing.

Until then, if you are an employer looking to ensure compliance with whistleblowing laws, or an employee concerned about your rights, seeking expert legal advice is crucial. The employment law team at Tees Law can help businesses navigate whistleblowing regulations and advise individuals on their legal protections.

Employers expected to take reasonable steps to prevent sexual harassment

Posted on 4 December 202421 March 2025 by Sarah O'Sullivan

Recent media coverage of allegations involving Gregg Wallace, underscore the challenges employers may face in managing third-party behaviour. While the specifics of the case remain unconfirmed and allegations are denied, the complaints shine a light on the importance of putting in place and enforcing robust preventative measures to mitigate such issues and risks. Employers should consider these situations when drafting and enforcing policies, particularly for roles or events involving significant interaction with external parties or clients.

The new duty

The Equality and Human Rights Commission (ECHR) have published guidance on the ‘reasonable steps’ employers should take to prevent sexual harassment at work.

As of 26 October 2024, employers must now take reasonable steps to prevent sexual harassment occurring at work. The Worker Protection Act 2023 changes section 40 of the Equality Act 2010 to include the new preventative duty.

As well as this, where a case of sexual harassment is proven, the tribunal will penalise the employer if they are also found to be in breach of the new duty, by increasing the employee’s compensation by up to 25%.

What are reasonable steps?

For employers, there is no exhaustive list of steps which need to be taken and what will be considered reasonable will be decided by a tribunal on a case-by-case basis. Therefore, recent guidance released by the ECHR gives employers the best possible idea of the steps which should be considered.

“Reasonable steps” or “all reasonable steps”

The Worker Protection Act was originally drafted to require that employers take “all reasonable steps” to prevent sexual harassment, but this was later diluted to a lower threshold of taking “reasonable steps”.

However, the Employment Right Bill is set to reinstate the higher threshold of taking all reasonable steps. If an employer has missed just one step to prevent sexual harassment which would be considered reasonable for them to have taken, the employer may face enforcement action from the ECHR or claims by the employee. The exact nature of how this will be enforced is not yet clear and we can expect more guidance in due course. For now, the importance of considering these issues and being ready with policies, procedures, training and guidance is key to mitigate the risks of claims and promote a safe and legally compliant workplace.

Employers should diligently follow the guidance below with careful consideration that the expected standard to prevent sexual harassment is going to be raised once again. Some of these changes are set to be introduced no earlier than 2026, however thorough preparations now will ensure a more efficient and cost-effective review of preventative measures next year.

Anti-harassment policies

Whilst an employer may already have in place some form of anti-harassment policy, it is now essential this addresses the prevention of sexual harassment specifically. Some key policy provisions suggested by the Equality and Human Rights Commission (ECHR) include:

Set out the preventative steps the employer is taking.

Site disciplinary action for those committing sexual harassment.
Allegations should be considered on a case-by-case basis, considering aggravating factors such as the seniority of the perpetrator.
Provide a definition of sexual harassment and include examples to promote clarity.
Include a procedure for how complaints will be handled to reassure victims and deter perpetrators, particularly with regards to third-party harassment.
The effectiveness of the policy should be reviewed at regular intervals.

Communication with workers

The guidance recommends promoting open communication amongst employees, to ensure employers have a good understanding of their work environment and that employees have a good understanding of the sexual harassment policy. This may be done via one-to-one’s, surveys or workshops for example. These will indicate the effectiveness of the preventative steps being taken and assist in identifying if changes need be made.

Risk assessments

A thorough risk assessment that is routinely reviewed and considered will demonstrate that an employer is being proactive in identifying potential circumstances whereby sexual harassment may take place. Putting in place appropriate preventative measures will demonstrate that they have acted on their assessments and used the results to guide decisions on what steps need reviewing or adding.

The guidance considers environmental factors which should be considered when conducting risk assessments, including settings with power imbalances, lack of diversity, lone or night working, customer-facing work and external or social events.

Reporting systems

Ensuring that a reporting system allows for anonymous complaints to be raised will encourage complainants to come forward and deter perpetrators. Employers should keep thorough records of complaints raised and ensure these are kept confidential. An effective reporting system will assist employers in identifying any patterns which should in turn be considered during risk assessment reviews.

Training

Proactive and high-quality training for all members of staff should educate employees on how to identify sexual harassment, what to do if they experience or witness it and how to manage any complaints raised. Specialised training may be exceptionally important in work environments where third parties are frequently in contact with employees. To improve the impact of training, they should offer refresher training at regular intervals.

Addressing a sexual harassment complaint

The guidance recommends some key action points:

Immediately take steps to acknowledge and make plans to resolve a complaint. However, this does not mean making rushed decisions as to whether harassment took place, which should be subject to proper investigation.
Consider how the complainant wants the issue resolved.
Maintain confidentiality.
Protect the complainant and witnesses from being victimised during investigation.
Where applicable, ask the complainant if they want to report the allegation to the police.
Be cautious when using confidential agreements, also known as NDAs.
Maintain effective communication with the complainant.
Inform the complainant of any appeals process.

Sexual harassment by third parties

The ECHR specifically highlights that the prevention of third-party sexual harassment should be taken as seriously as internal harassment cases. Whilst these situations are much more difficult to control, the guidance recommends having reporting mechanisms and continually assessing high-risk work environments where employees may be left alone with third parties.

Evaluate and evolve

Employers should regularly evaluate the effectiveness of the steps they have in place to prevent sexual harassment. Ad hoc reviews should be made where changes arise in the work environment, work force or work type for example.

Employers are expected to have an accurate understanding of the level of sexual harassment in their workplace. Regularly collecting data will assist employers in gaining this understanding. In particular, the ECHR recommends reviewing informal and formal complaints data to identify trends and appropriate action. Anonymous surveys can be used to identify barriers to reporting sexual harassment and collaboration with worker networks or trade unions can help keep employers informed.

After having addressed a sexual harassment complaint, employers should ensure they set aside time to reflect on where their actions could have been improved. Where changes are identified, changes should always be implemented.

The ongoing situation with high-profile cases such as the one involving Gregg Wallace may serve as a reminder that no organisation is immune from scrutiny, and the legal expectations surrounding sexual harassment are shifting towards a more preventative approach.

Useful resources

The get Britain working again white paper

Posted on 29 November 202421 March 2025 by Sarah O'Sullivan

Britain’s labour market has faced numerous challenges in the last few years, with 2.8 million people reportedly unable to work due to long-term sickness^[1], one in eight young people not being in education or employment^[2] and having been most impacted by covid lockdowns in comparison to similar countries^[3]. It is further reported that health benefits in the UK have increased from £36 billion to £48 billion in the last financial year as a result of mental health worsening during successive lockdowns^[4].

With this in mind, the Government has published ambitions to implement a three-pillar strategy (detailed below) to improve economic inactivity in Britain, with a long-term goal of achieving an 80% employment rate:

Modern Industrial Strategy and Local Growth Plans: to create more good jobs in every part of the country.
Plan to Make Work Pay: to improve the quality and security of work.
Get Britain Working: to reform employment support.

The third limb in this plan has been set out in the Get Britain Working White Paper. The Paper has indicated aims to address six issues:

People being excluded from the labour market, especially those with health conditions, caring responsibilities or lower skill levels.
Young people leaving school without essential skills, access to learning or work.
People becoming stuck in insecure, poor quality and low-paying work.
Women caring for families experiencing challenges staying in and progressing at work.
Employers being unable to fill vacancies due to labour and skills shortages.
Disparity in labour market outcomes between different places and for different groups of people.

The Paper details several proposed actions and changes:

Improve the impact of the NHS
The Paper aims to tackle health conditions which are seen to contribute to unemployment, such as mental health, smoking and obesity. The support is to include Talking Therapies, the Tobacco and Vapes Bill and new treatments for obesity. Treatment for such health conditions will include improved access to employment advisers and Individual Placement and Support (IPS). The goal is to provide these services to 140,000 more people by 2028/29.
Give control to local areas
There will be funding of £125 million to introduce eight ‘trailblazers’ into local authorities in 2025/26. They will be tasked with connecting relevant local services and trialling new interventions.

Local areas will be supported to create their own Get Britain Working Plans and engage with local partners to assist with their implementation.

A Connect To Work programme will assist up to 100,000 people a year with employment, supported by the Shared Prosperity Fund, a locally controlled fund.
The Youth Guarantee
The Youth Guarantee aims to ensure young people aged 18-21 are learning or earning.

There will be 8 Youth Guarantee trailblazers working with £45 million of funding in 2025/26 to design and develop the Guarantee to improve opportunities for young people. The Apprenticeship Levy will be redeveloped to become more flexible and renamed the Growth and Skills Levy. They will create new foundation apprenticeships and shorter apprenticeships in key sectors. New partnerships will be developed to generate opportunities for young people.
Improve Jobcentre Plus
There will be funding of £55 million to reform Jobcentre Plus in 2025/26. It will build new relationships with employers. It will be integrated with local partners and aims to bring employment and careers advice together.
Review how employers promote healthy and inclusive workplaces
The review ending next summer will assess how the government can better support employers to:

Improve the recruitment and retention of disabled people and people with health conditions.
Prevent their workforce from becoming unwell.
Promote healthy workplace environments.
Implement early intervention for sickness absence.
Improve the rate of employees returning from sickness absence.

This review will complement the Make Work Pay reform, which aims to address job insecurity and expand flexible working.

Next steps

The government further plans to reform the health and disability benefits system and will bring forward a Green Paper in spring 2025.

For employers, there may be opportunities to embrace these initiatives but they should be considered carefully in the context of presently increasing employment law rights. Now is the time for employers to be agile and ready for change. It is essential that employers’ policies and procedures are tailored to drive recruitment and career development, whilst maintaining clear and robust procedures to address performance and conduct issues. For more information, speak to our team of specialist employment advisors at Tees.

Resources

[1] INAC01 SA: Economic inactivity by reason (seasonally adjusted) – Office for National Statistics (ons.gov.uk)

[2] Young people not in education, employment or training (NEET) – Office for National Statistics (ons.gov.uk)

[4] Sick pay timebomb that risks a lost generation of workers – BBC News

Navigating settlement agreements this festive season

Posted on 2 November 202421 March 2025 by Sarah O'Sullivan

Every year as the festive season rolls in, so do the enquires about settlement agreements. Financial pressures, year-end reorganisations, and planning for the new year often lead to what can be challenging conversations in the workplace. Whether you are an employer looking to resolve a workplace issue or an employee faced with an unexpected offer, understanding how to approach settlement agreements is key to achieving a fair and smooth resolution.

Handled well, settlement agreements can benefit both parties. Mishandled, they can lead to misunderstandings, delays, or even legal disputes.

At Tees Law, my colleagues and I in the employment team, advise both employers and employees, helping them navigate the process with confidence. We have set out some key hints and tips below for how both sides can approach settlement agreements effectively and try to avoid unnecessary stress during this bustling time of year.

Why settlement agreements spike in winter

For many employees, being presented with a settlement agreement just before the holidays can feel overwhelming. For employers, it can be a practical way to resolve disputes, end employment relationships amicably, and avoid the uncertainty of future claims. However, the key to success lies in handling these agreements thoughtfully and strategically.

Tips for employers: getting it right

If you are offering a settlement agreement to an employee, consider the following tips to set the process on the right track:

Give them time: Employees are entitled to take time to consider the agreement. While there is no hard-and-fast legal rule, ACAS guidance suggests giving them at least 10 calendar days. A rushed process can feel heavy-handed and is unlikely to foster cooperation and if approached in the wrong way could mean that otherwise protected conversations may be admissible in contested proceedings.
Recommend trusted advisors: Many employees will not know where to start when seeking legal advice. While they have the right to choose their own solicitor, offering a list of reputable employment lawyers, like Tees, can save them time and stress. Many of the employees we assist have spent days calling around before finding the right support.
Offer a reasonable contribution to legal fees: Covering legal fees is not mandatory, but a contribution shows goodwill and makes it easier for employees to seek advice. Without it, employees may hesitate to proceed, delaying resolution.
Show empathy: Imagine being handed a settlement agreement in the run-up to Christmas. It is a challenging time, and empathy can go a long way. Consider flexible arrangements, like offering garden leave or discussing whether they would prefer to work (or not) while deciding. Demonstrate understanding—it will make a significant difference in tone and outcomes.
Be clear and fair: If your offer is non-negotiable, set this out plainly. Make it reasonable, explain how it is calculated, and detail the benefits in specific monetary terms. Employees are more likely to agree when they—and their solicitor—see that the offer is thoughtful and fair and understand the employer’s perspective.
Draft with precision: Poorly drafted agreements create delays and increase costs. Ensure all terms are clear. If you are unsure, consulting an employment law solicitor early can save time, costs and effort later.
Consider flexibility on non-competes and notice periods: Non-compete clauses or decisions on payment in lieu of notice can be restrictive. Offering garden leave or taking a more flexible approach can set a cooperative tone and make the agreement more appealing. For employees on visas or those utilising benefits, garden leave can be especially valuable.
Communicate departure sensitively: Leaving a role is a significant moment, and most employees want to depart with their reputation intact. Work with them to agree on how and when the departure is communicated. This collaboration can help preserve goodwill on both sides.

Tips for employees: getting it right

If you have been offered a settlement agreement, do not panic—it is an opportunity to clarify your position and negotiate terms that work for you. Here is how I suggest you approach it:

Do not feel pressured: You are entitled to time to review the agreement and seek legal advice. If the deadline feels tight, ask for an extension—most employers will understand the need for time to consider an offer, within reason.
Seek legal advice: Settlement agreements are complex, and independent legal advice is essential. A solicitor can help you understand your rights, assess the terms, and negotiate on your behalf if needed.
Understand what is being offered: Ensure you understand all aspects of the offer, from financial compensation to restrictive clauses like non-competes. A solicitor can clarify how these might affect your future.
Consider negotiation: If the offer seems unfair, do not be afraid to negotiate though your bargaining position and whether it would be worth seeking more will depend on the circumstances. Take advice on what is viable.
Plan your next steps: Whether you agree to the terms or not, think about how the situation aligns with your career goals and objectives. Focus on end aims rather than the emotion of facing these changes. Consider discussing how your departure will be communicated to protect your reputation.

Key considerations for both parties

Clarity is crucial: Whether drafting or reviewing a settlement agreement, ensure the terms are precise and leave no room for misinterpretation.
Flexibility helps: Employers and employees who approach the process with flexibility are more likely to reach a mutually beneficial outcome.
Professional advice is essential: Settlement agreements are legal documents—not only is advice necessary to make the agreements binding, seeking expert advice can prevent costly mistakes.

The festive season may bring challenges, but with the right approach, you can ensure that everyone enters the new year on solid ground. Reach out to our employment law team today for tailored advice that works for you.

Let us help you navigate these seasonal spikes with confidence—because everyone deserves a fair resolution, no matter the time of year.

Stansted Airport expansion: Balancing growth with employment law compliance

Posted on 22 October 202421 March 2025 by Sarah O'Sullivan

Stansted Airport’s reported £1.1 billion expansion is poised to create over 5,000 jobs, promising a major economic boost. However, behind the headlines lies a complex employment law landscape that should be considered.

Employment law challenges

While new jobs and growth are to be welcomed, large projects like this can present human and employment law challenges that must be carefully managed.

Sector-specific regulations

The aviation and construction sectors are governed by stringent regulations—health and safety standards, collective bargaining with unions (where applicable), and recruitment and onboarding compliance that are just a few areas that will need to be considered alongside the usual and considerable employment law obligations.

Opportunities and risks

Managed well, this will prove an opportunity for employers to showcase best practices in recruitment, worker safety, and union engagement to promote growth with an engaged and productive workforce. Managed badly and employers will face claims and complaints and recruitment and retention issues.

Striking the right balance

With careful planning, Stansted could set a benchmark for balancing rapid growth with strong legal compliance, fostering not just jobs but quality employment. The key challenge? Balancing rapid recruitment with safeguarding worker rights. As temporary and agency workers inevitably make up part of the workforce, employers must avoid the pitfalls of misclassification and unequal treatment. Temporary work may suit the short-term nature of construction, but employees in aviation roles will expect job security and fair conditions under the collective agreements often in place at airports.

Union engagement and industrial relations

Moreover, union involvement will likely intensify, with employees and unions demanding assurances on pay, working hours, and conditions. Industrial relations could become a sticking point if employers don’t engage early and often, as past experiences with the aviation sector have shown.

The path forward

For many, this expansion represents hope: an optimistic vision of the future where economic progress is intertwined with social responsibility. Thoughtful attention to employment law could transform this development into a model for how infrastructure projects should unfold, creating not only work but also a fair, inclusive workforce.

Best practices for employers

By emphasising training, fair pay and treatment, and, where applicable, collaboration with unions, Stansted’s growth can prove that scaling up responsibly is not only possible but profitable. This could be a blueprint for the aviation industry and beyond as more projects emerge, requiring rapid, responsible hiring.

In short, Stansted’s expansion represents more than physical growth; it’s a chance to align progress with ethical employment practices, offering a win-win for workers and the economy. Employers who navigate these waters well will benefit from a successful and compliant recruitment drive. Those who don’t may find themselves tangled in costly disputes that could derail the project.

Lessons for UK employers from Amazon’s return-to-office mandate

Posted on 16 October 202421 March 2025 by Sarah O'Sullivan

Navigating the new norm

Amazon’s bold decision to compel all employees back to the office five days a week starting next year has stirred considerable debate. While the move signals a return to pre-pandemic norms, it also represents a broader philosophical and operational shift for companies worldwide. For UK businesses, this development prompts contemplation on balancing operational efficiency, legal obligations, and employee well-being.

The conundrum of contractual clarity

At the heart of Amazon’s mandate lies a fundamental question: How do employers transition away from the flexibility granted during the pandemic? Looking at the employment contracts are important in this context. Many employees were granted flexible working arrangements either informally or via alterations to their contracts during this time. Additionally, it isn’t just about what was written, but also about the implicit understandings that may have developed during a time of global crisis. Employers must tread cautiously, ensuring any shift respects both legal and moral bindings. It invites a nuanced approach—one that balances legal compliance with the expectations of a workforce that has tasted flexibility and may feel aggrieved or even discriminated against if they are asked to do something that has not been the norm for a period.

The necessity of dialogue: Listening as an operational strategy

Open communication with employees is something to be encouraged—a critical yet sometimes overlooked cornerstone of organisational change. Consulting employees about such substantial shifts isn’t just a legal formality; it’s an opportunity to forge a deeper connection.

Meaningful dialogue can unearth insights, prompt innovation, and even identify potential pitfalls early. It shifts the narrative from mere compliance to collaboration, transforming the potential friction of policy changes into a symbiotic evolution.

Health and safety redefined

Amazon’s move triggers fresh assessments of the workplace environment. The pandemic has indelibly altered the benchmarks for what constitutes a ‘safe’ workplace. Health and Safety, now more than ever, must encompass mental as well as physical well-being. This necessitates not just risk assessments but also a rededicated focus on mental health resources and a culture that fosters psychological safety. As employers, the challenge lies in evolving health and safety policies from checklists to cultural cornerstones.

The flexible working paradigm

Amazon’s announcement also brings into sharp focus the delicate dance around flexible working requests. The law permits employees from the first day in their roles the statutory right to request flexible working, yet this needs thoughtful navigation.

The discourse should lean towards the art of the possible—how can flexible working be shaped to benefit both the employee and the organisation? This isn’t just about managing refusals; it’s about genuine engagement and innovative problem-solving to harmonise operational needs with employee aspirations. The fact is that a return to a static, office-bound work model introduces significant practical challenges, from commuting logistics to work-life balance disruptions.

Employers might consider hybrid models or phased returns. Rather than this being perceived as a sign of indecision, an alternative view would be to judge this as a compromise of flexibility and a strategic virtue. By giving employees time to adjust, employers can ease potential frictions and cultivate a more resilient workforce for a sustainable future.

Regulatory reflection

Finally, any return to office mandates must align with evolving regulatory landscapes. The dynamic nature of Government guidelines necessitates ongoing vigilance and adaptability. In the event of future public health crises, businesses should be prepared to rapidly adapt its working policies to align with legal requirements and public health recommendations.

Knowledge is power. Employers need to stay abreast of changes, adapting policies proactively rather than reactively. This proactive stance isn’t just about avoiding legal pitfalls but about embodying a forward-thinking, employee-centric ethos.

Beyond the mandate

Amazon’s decision serves as a significant impetus for reflection. It challenges UK employers to look beyond mere mandates and towards a broader re-imagining of work. How can organisations blend operational exigencies with the evolved expectations and needs of their workforce? From contractual modifications and health and safety obligations to handling flexible working requests, businesses will need to navigate a range of legal and practical considerations. Successfully managing this transition requires careful planning, robust consultation, and a commitment to employee welfare.

By advocating for a thoughtful, compassionate, and strategic approach, employers can transform potential unrest into a unifying journey towards a reinvigorated workplace. The goal is not to return to the old normal but to craft a new one—a workplace that respects the lessons of the pandemic, embraces flexibility as strength, and champions a culture where both business and employees thrive in tandem.

Employment (Allocation of Tips) Act 2023: Key info for hospitality

Posted on 16 October 202421 March 2025 by Sarah O'Sullivan

From 1 October 2024, the UK hospitality sector was subject to the introduction of the Employment (Allocation of Tips) Act 2023. The legislation has been designed to facilitate transparency and fairness in distributing tips, gratuities, and service charges among workers. The law addresses long-standing concerns over tip management, particularly as the industry moves toward cashless transactions.

How this will impact employers and workers in the UK’s hospitality sector remains to be seen. Having conducted a first review of the Act (and the accompanying statutory Code of Practice), the key provisions include:

Obligation to pass on tips in full: Employers must pass on 100% of tips to their workers, with the only deductions allowed being those required by tax law.
Fair distribution: Employers must allocate tips fairly and transparently (my emphasis). Tips must be distributed within one month of being received.
Record keeping and written policy: Employers are required to maintain records of tip distribution for a minimum of three years. In addition, businesses where tipping occurs more than occasionally must implement and make available a written tipping policy.
Worker rights: Workers can request a copy of their tipping record to ensure compliance, and they may bring claims to the Employment Tribunal if they believe their tips are not being handled fairly.
Agency workers: The Act also benefits agency workers, with provisions ensuring that tips distributed by an employer are passed on to them.

Impact on employers

The Act introduces administrative responsibilities for employers, particularly those in hospitality businesses where tipping is a regular occurrence. Employers will now be required to keep detailed records of tip allocation. As tipping becomes more commonly effected via card or electronic transaction, businesses may need to absorb these processing fees, which could impact their bottom line.

Clear and accessible tipping policies will become obligatory to ensure all workers understand how tips are distributed. For many businesses, this will require developing and communicating new procedures.

Businesses that fail to comply with the legislation may face claims in the Employment Tribunal. Workers can request their tipping records and seek compensation if they believe they are being shortchanged, with compensation awards potentially reaching £5,000.

Impact on workers

For hospitality workers, this Act represents a significant step toward ensuring that tips are distributed fairly and transparently, addressing long-standing issues of employer tip retention. Workers will receive their tips in full, without deductions for administrative or processing costs. This is particularly important for low-wage workers who rely on tips to supplement their income.

Additionally, workers can request records showing how tips are allocated, ensuring transparency in the process. This accountability mechanism helps protect earnings and ensures that workers can challenge any perceived unfair practices. Further, in a departure from historical legislation, agency workers will now be entitled to receive tips fairly, adding a layer of protection for this often-vulnerable segment of the workforce.

Challenges and concerns

Although the legislation promises benefits for workers, both businesses and those working for them may encounter challenges. For establishments that rely heavily on tips, implementing new record-keeping systems and complying with statutory obligations will require careful planning and investment. While larger businesses may be able to absorb the costs associated with processing tips via card, smaller establishments might struggle. Some may even consider returning to a cash-only tipping policy, potentially reducing the amount of tips workers receive in the long term.

The Act mandates fairness but does not prescribe how tips should be allocated. When distributing tips, employers are encouraged to consider factors like seniority, hours worked, and performance. However, this could lead to disagreements among staff, particularly in businesses where tips are a significant part of total compensation.

Legal compliance and best practices

Businesses should consider the following steps:

Audit Current Tipping Practices: Review how tips are currently managed and make any necessary adjustments to comply with the new requirements.
Develop a Tipping Policy: Create a clear, written tipping policy that outlines how tips will be distributed. Ensure that this policy is communicated effectively to all workers, including agency staff.
Keep Detailed Records: Set up systems for recording how tips are allocated and distributed. Employers should be prepared to provide this information upon request from workers.
Consider Independent Troncs: Many businesses in the hospitality sector already use a “tronc” system to manage tip distribution. The Act allows the use of independent tronc operators, as long as they operate fairly. Using a tronc can help businesses manage the complexity of tip distribution and avoid disputes.

Looking forward

The Employment (Allocation of Tips) Act 2023 is a much-anticipated reform designed to introduce fairness and transparency to tipping practices within the UK’s hospitality sector. While imposing more responsibilities on employers, this legislation promises significant benefits for workers by ensuring they receive their earned tips without deductions.

Employers are encouraged to take proactive measures to prepare for these changes, set to take effect on 1 October 2024. By establishing clear tipping policies and practising transparency, businesses can mitigate potential disputes and promote a fairer workplace.

This legislation marks a significant victory for workers in ensuring fair treatment and protecting their income in an industry where tips form a vital part of their compensation.

Navigating collective redundancy: A look at the UK procedure through Dyson’s lens

Posted on 16 October 202421 March 2025 by Sarah O'Sullivan

Understanding Collective Redundancy in the UK

In the intricate web of corporate restructuring, the concept of collective redundancy stands out, especially in the context of UK employment law. It’s a process that isn’t just procedural but profoundly impacts the employees’ lives. For companies like Dyson, known for their innovation in household appliances, navigating through such terrain is as much about legal compliance as maintaining workforce morale and brand integrity.

Dyson’s Workforce Reduction: An Overview

Dyson is reducing its staff in the UK by approximately 1,000 positions as a component of a worldwide restructuring effort, effectively decreasing its British staff by over a quarter. On Tuesday morning, employees were informed of the job reductions, which are part of a strategy to decrease the company’s global workforce of 15,000 as part of an extensive cost-reduction initiative.

Addressing work issues across international boundaries is complex and beyond the scope of this article. Various practical challenges and differing methods are involved, and grasping these is crucial for carrying out a fair procedure that minimises the risk of potential litigation.

The UK’s Collective redundancy framework

At the heart of the UK’s approach to mass layoffs is the principle of “collective consultation.” This principle comes into play when an employer, such as Dyson, considers dismissing 20 or more employees within 90 days or less. It’s not merely a procedural step but a fundamental right—ensuring employees have a voice in the profound changes affecting their livelihoods.

Key legal precedent: The woolworths case

The European Court of Justice (ECJ) fleshed out these principles in the landmark USDAW v Ethel Austin case, known as the Woolworths case, in April 2015. The court clarified that once the threshold of 20 redundancies is crossed within a single establishment, employers are obligated to engage in collective consultations. Interestingly, this consultation privilege extends beyond those facing redundancy to any employees potentially impacted by the changes.

The procedure and timeframes

For large-scale operations like those Dyson might consider, two crucial timeframes are stipulated:

45 days of consultation for 100 or more dismissals
30 days for 20 to 99 dismissals

This advanced consultation period is not just about notifying employees; it is about engaging with them, discussing possible alternatives, and ensuring that the redundancy process is carried out as smoothly and humanely as possible.

Implementing Dyson’s redundancies

Given Dyson’s global footprint and its commitment to innovation, the company finds itself often at the crossroads of adapting its workforce to meet evolving market demands. If Dyson were to implement collective redundancies in the UK, engaging in a thorough collective consultation process would be imperative. Not only would this comply with legal requirements, but it would also reflect the company’s values by treating its workforce with respect and dignity during challenging times.

Dyson will need to openly discuss the reasons behind the potential redundancies, explore alternatives with employee representatives, and ensure that the process is transparent and fair. This could involve looking into options such as redeployment within the company, voluntary redundancy packages, or other measures to minimise the impact on its employees.

Potential pitfalls if the process goes wrong

Failure to consult correctly can have profound financial implications for a company, emphasising the importance of adhering to the specific legal requirements for collective consultation.

In a UK redundancy situation, if an employer does not meet the collective consultation requirements, employees can make a claim to an Employment Tribunal. If the claim is successful, the employer may have to pay the affected employee or employees compensation, known as a ‘protective award’. This compensation can be up to 90 days’ full pay for each affected employee.

Not only this, but improper handling of the consultation process can also lead to legal challenges. Employees might claim unfair dismissal, and the company could face financial penalties if found to be non-compliant with statutory requirements.

Impact on brand and employee morale

On a personal level, mishandling redundancies can inflict long-lasting damage on a company’s reputation. For a brand like Dyson, known for its innovation and quality, public perception can significantly impact consumer trust and loyalty.

This could also have a detrimental impact on retaining the remaining staff. Poor handling of such processes can demoralise survivors, affecting productivity and potentially leading to further employee turnover. Employees who see their former colleagues treated unfairly might start looking for more secure employment opportunities.

Furthermore, a sudden and poorly managed redundancy process can lead to gaps in operations, affecting service delivery and business performance.

Navigating the redundancy process with care

For a company like Dyson, navigating the collective redundancy process with care and consideration is crucial. Every step needs to be meticulously planned and executed. While the process is primarily about compliance, it also strongly reflects the company’s values and regard for its workforce. A transparent, fair, and well-managed consultation process not only minimises legal and financial risks but also upholds the company’s ethos, maintaining its reputation as a responsible employer.

Navigating the complexities of collective redundancy procedures in the UK presents a significant challenge, involving both a deep understanding of legal nuances and a compassionate approach towards the workforce. For businesses transiting through such a phase, the importance of following each step meticulously cannot be overstressed, given the potential financial, legal, and reputational repercussions of failing to meet the required standards.

The dialogues around collective redundancies, from consulting with employee representatives to addressing final decisions, highlight an employer’s commitment to fair and ethical business practices. While this guide serves as a primer for understanding the critical aspects of the redundancy consultation process and its importance, each situation’s unique characteristics can introduce specific complexities that deserve personalised attention and expertise.

Should you require additional insights, detail on legal obligations, or guidance on managing the collective redundancy process within your organisation, our team at Tees Law is here to provide comprehensive support. Navigating such pivotal moments requires not just legal acumen but an in-depth appreciation of the human elements involved. Contact Tees Law for further assistance and advice to ensure that your redundancy procedures are managed effectively, compassionately, and in full compliance with current UK employment law.

Employment Rights Bill 2024: Worker protections and productivity

Posted on 10 October 202421 March 2025 by Sarah O'Sullivan

Understanding the Employments Rights Bill 2024

The Employment Rights Bill 2024 (the Bill), unveiled on 10 October, introduces significant changes to the UK’s employment laws, marking the largest overhaul in decades. With 28 reforms, the Government has presented the Bill as aiming to enhance worker protections and boost productivity across the economy.

One of the standout changes is enhanced “day one” rights, including the right not to be unfairly dismissed (see also below). With this, there is a proposed introduction of a statutory probation period for new hires. This may allow employers more time to assess employee suitability notwithstanding the new day one rights being introduced.

Key Reforms: Day-one rights and probation periods

One of the most significant reforms is the removal of the existing two-year qualifying period for protection against unfair dismissal. This change ensures that an estimated nine million workers will benefit from protection from unfair dismissal as soon as they start a new role.

Additionally, the bill includes day-one rights for paternity leave, unpaid parental leave, and bereavement leave, building on the existing day-one right to maternity leave. This is a major change.

The Government will consult on a statutory probation period, with the current proposal favouring a nine-month limit. This extension, which has drawn mixed reactions from businesses and unions, is intended to provide flexibility for employers, while maintaining worker protections throughout the probation period. Full implementation of this probation reform is expected by autumn 2026, following further consultations.

End of exploitative practices and strengthened sick pay

The bill also takes aim at so called exploitative zero-hours contracts and controversial fire-and-rehire practices. These reforms are intended to provide more job security and protections, especially for workers on flexible or irregular contracts. For those on zero-hours contracts, the bill introduces the right to guaranteed working hours after a set period, ensuring greater financial stability for over a million workers.

Another key reform is the overhaul of statutory sick pay. Under the new provisions, workers will be entitled to sick pay from day one of illness, removing the previous three-day waiting period and the lower earnings limit. This change aims to provide immediate financial support for those who fall ill, especially lower-paid workers who previously did not qualify for statutory sick pay.

Flexible working and gender pay gap action plans

Recognising the changing dynamics of the modern workplace, the bill makes flexible working the default, unless employers can demonstrate that it is impractical. This reform is designed to support workers with caregiving responsibilities and improve work-life balance across various sectors.

Large employers will also be required to implement action plans to address gender pay gaps and support female employees, particularly through menopause. This measure is part of a broader push to promote inclusivity and diversity within the workforce.

Fair work agency and long-term reforms

The bill establishes a new “Fair Work Agency”, tasked with enforcing key rights such as holiday pay and sick pay. This agency will consolidate existing enforcement bodies, providing better guidance for employers while ensuring compliance with the new laws. The government has also outlined future reforms in its “Next Steps” document, including plans for a right to disconnect, mandatory reporting on ethnicity and disability pay gaps, and a move towards a simpler, two-tier worker status framework.

While the Employment Rights Bill boasts a sweeping set of reforms, many of the provisions will take time to implement, with some requiring further consultations before being fully enacted. Nevertheless, the bill represents a bold step towards improving worker protections and enhancing productivity in the UK economy.

For more insights into how these changes may affect your business or employment, contact our Tees Law team. We’re here to provide legal guidance on navigating this new landscape and ensuring compliance with evolving employment laws.

For any questions, please contact us at employmentteam@teeslaw.com.