Employment and pensions

UK Employment Law Coffee Break: Generative AI webinar, mutual termination and predictable working conditions

Published on 21st Sep 2023

Welcome to our latest Coffee Break in which we look at the latest legal and practical developments impacting UK employers.

Close up of people in a meeting, hands holding pens and going over papers

Generative AI: managing current and future risks

Please join us for our webinar on Thursday 28 September where we will provide an overview of the commercial, employment, regulatory and compliance risks associated with generative AI, and our top tips for how these risks can be mitigated and managed. We are working closely with employers on the impact of generative AI for them across their operations; please contact your usual Osborne Clarke contact or partner Olivia Sinfield on how we can assist you.

Consensual termination of employment of neurodivergent employee

The Employment Appeal Tribunal (EAT) has recently upheld the decision of an Employment Tribunal (ET) that a neurodivergent employee (recognised as disabled by reason of autism spectrum disorder) was not unfairly dismissed as he had agreed to the termination of his employment, which was therefore consensual.

Following an extended period of inability to work due to anxiety and depression and an unsuccessful attempt at returning to work, medical reports indicated that the employee was unable to perform “his insured role” and concluded: “It is difficult to see that [the employee] would recover sufficiently to perform his role in the near or medium future.”

The employee's employment was terminated and the ET found that the termination was not a dismissal as it was consensual. There had been a supportive meeting and discussion which were designed to help the employee make the right decisions for the future and it had been agreed that he would cease employment and the insurer would continue the permanent health insurance (PHI) payments until retirement. The employee was asked for his thoughts and stated "It all makes sense. I know really this is where it’s been heading for the last four years. This ties it all up as I do not have to think about how I am going to get back into work and what a phased back to work will look like and when I am going to be able to come to work and the hours."

In this case, the ET and EAT were satisfied that there was no deceit, coercion or undue pressure and that the employee proactively pursued the option of the insurer payments and the termination of his employment as he wanted to take advantage of it; he made an informed decision and no pressure was placed on him.

PHI schemes usually require employees to remain in employment, "on the books" of the employer, for cover/payments to continue. It is therefore vital that employers check the implications of terminating employment before contemplating any dismissal or consensual termination of employment.

As well as any discrimination considerations, terminating employment could remove the employee's continuing entitlement to PHI benefits and case law has established an implied term preventing an employer from dismissing in these circumstances without good cause. Legal advice should always be sought before any termination of employment is even raised as an option, as unfair constructive dismissal and disability discrimination could arise as well as a termination – resulting in a costly liability for the employer in making them responsible for damages in respect of the lost PHI benefits up to retirement.

New law gives temporary and agency workers a right to request more predictable working patterns

The Worker (Predictable Terms and Conditions) Act 2023 has now received Royal Assent (19 September). The new law will give all eligible workers a statutory right to make up to two requests a year for a more predictable working pattern.

A right to request can be made where there is a lack of predictability in relation to the work that the worker does for the employer regarding any part of their working pattern. This covers matters such as the number of hours worked, the days and times worked and the period for which the worker is contracted to work.

Where a fixed-term worker is on a contract of 12 months or less, this will be regarded as lacking predictability as regards the period for which the worker is contracted to work. Generally this may most affect temporary and agency workers engaged in roles where shifts get changed and are not guaranteed or predictable, and, in the case of agency workers, have lasted longer than 12 weeks in the same role (much like the qualifying period for Agency Worker Regulations purposes).

An employer must deal with a request in a reasonable manner and will only be permitted to refuse a request on one of six statutory grounds: additional cost, ability to meet customer demand, impact on recruitment, impact on other areas of the business, insufficiency of work during the proposed periods and planned structural changes. An employer must deal with a request for a predictable working pattern within one month. Additional grounds of objection apply where a worker ceases to be employed by an employer during the decision period.

Regulations will provide more detail on how the right will operate in practice; at present, it is expected that employees and workers will need to have first worked for their employer for 26 weeks before making an application.

Regulations will also set out the compensation that a worker or employee might receive if their rights under the new laws are breached; as with a breach of the statutory right to request flexible working, this is likely to be a specific number of week's pay. An Employment Tribunal may also order a reconsideration of an employer's decision.

There are separate provisions which set out how the new right will operate for agency workers who wish to make a statutory request for more a more predictable working pattern to their temporary work agency or hirer. They can make the request to the employment business through which they work or to the end user under whose direction and supervision they work. Any claim made by a worker who is otherwise treated as self-employed will need to be treated carefully – consent to a request may be deemed to be an admission that the worker is, for example, inside IR35.

The government has stated that it expects the measures in the Act and secondary legislation to come into force approximately a year after Royal Assent, giving employers, and suppliers and users of agency workers, time to prepare for the changes.

The new laws deliver on a 2019 Conservative manifesto commitment. In its announcement, the government confirms that zero hours contracts and other forms of atypical work are "an important part of the UK's flexible labour market; however the Government is determined to tackle unfair working practices". The Act intends "to redress the imbalance of power between some employers and workers in atypical work, encouraging workers to begin conversations with their employer about their working patterns". It is hoped that where requests are accepted, workers will have more predictable terms and conditions that better suit their individual circumstances "leading to higher job satisfaction" for them and "better staff retention" for employers.

However, how effective it will be in practice remains to be seen, given the potentially low penalties for non-compliance, and where there are no breaches of other laws, such as discrimination.

Acas is producing a new Code of Practice that will provide guidance on making and handling requests and which "will help workers and businesses understand the law and have constructive discussions around working arrangements that suit them both". The announcement states that the draft code will be available for public consultation in the coming weeks.

The Workers (Predictable Terms and Conditions) Act 2023 originated as a private member's bill which the government has recently backed. In the absence of a over-arching government Employment Bill this is another example of government support for such bills to push forward specific employment rights. Other recent bills passed into law include a new statutory right for parents to paid neonatal leave, greater protection against redundancy for pregnant women and new parents, a new right to unpaid carers leave and changes to the statutory right to request flexible working.

Interested in hearing more from Osborne Clarke?

* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

Connect with one of our experts

Interested in hearing more from Osborne Clarke?

Related articles