The Employment Rights Bill (the “Bill”) is currently going through the ‘committee stage’ in the House of Lords. A number of amendments relating to zero hours, low hours and agency workers, flexible working and the removal of the waiting period for statutory sick pay (SSP) have been debated and agreed.

What amendments have already been made?

Key amendments, which have been made recently, include:

• Workers on annualised hours contracts have been brought within the scope of the guaranteed hours provisions, by introducing a calculation method to determine the apportioned number of any unassigned hours in the relevant reference period.
• An employee will be deemed to have been automatically unfairly dismissed where the employee is dismissed for bringing an employment tribunal claim in circumstances where their employer has either incorrectly issued a notice stating that their guaranteed hours offer has been withdrawn, or where the employee alleges the existence of any circumstance which would constitute a ground for bringing such proceedings.
• The definition of ‘movement’ of a shift has been widened to provide for situations where a shift is either split in two or more parts, or where the starting time remains the same, but part of the shift is moved so that it ends later that day than initially anticipated.
• Technical changes have been agreed relating to payments for short notice cancellation, movement or curtailment of shifts where an exception applies. Employers will not need to provide a notice if they pay the worker within the deadline for making the payment. This amendment will also apply to work-finding agencies and agency workers.
• A shift will be a ‘qualifying shift’ if it would have been worked, or is being worked, by the worker under a worker’s contract that “requires the employer to make some work available to the worker”.
• The requirement to give an explanation within the notice of exception to the duty to make payments for cancelled, moved or curtailed shifts, for both directly engaged and agency workers, does not require the disclosure of information that is commercially sensitive, nor does it require the disclosure of information where the disclosure would breach data protection legislation or breach a duty of confidentiality.
• Employees on zero hours, low hours or agency worker contracts will be treated as preferential debts, meaning that they can receive short notice payments in the same circumstances as they would receive other wages should their employer become insolvent.
• Information will not have to be provided and will not be disclosed to a tribunal or court under the zero hours provisions where, in the minister’s opinion, the disclosure would be against the interests of national security.
• Employment tribunal proceedings under the zero hours provisions can be instituted, continued or defended by a personal representative of the deceased, in the event of a worker’s death, an employer’s death, or, in claims involving agency workers, the death of another respondent.
• Employment tribunals will be able to impose financial penalties on all types of respondents in claims brought under the zero hours provisions where there are aggravating circumstances.

The Employment Tribunals Act 1996 will include payments for cancelled, moved or curtailed shifts within its scope, therefore ensuring that regulations can be made:

• which allow benefits to be recovered where a worker has been forced to claim benefits because they did not receive such a payment; and
• which allow benefits to be recovered from all types of respondents in claims brought under the zero hours provisions.

What are the next steps?

The committee stage is scheduled to continue until 5 June 2025. The next clauses to be considered concern the protection from harassment provisions.

If you need support or advice on the proposals, or with reviewing your existing policies and procedures, then our employment team is here to help.

 

Brake Bros Ltd v Hudek [2025] EAT 53

Contract interpretation: overtime or normal working hours?

Background to the case

Mr Hudek was employed by Brake Bros as a lorry driver with an annual basic salary. Under his employment contract, Mr Hudek was required to work five shifts per week, which were expected to last nine hours each, subject to the requirement to work such hours on each shift as were necessary for the proper performance of his duties. The contract was later varied to increase the average shift length to 9.4 hours. The employment contract contained a provision for overtime, which was payable only if Mr Hudek worked an extra half-shift (minimum 4.5 hours) or an extra full shift.

Mr Hudek’s average working hours per shift were 10 hours, seven minutes between 2021 and 2022. Because of this, he brought an unlawful deduction from wages claim against Brake Bros, arguing that he should have been paid on a pro-rata basis for any time worked beyond the contracted 9.4-hour shift length, even if that was less than a half-shift.

The employment tribunal upheld Mr Hudek’s claim, finding that the pay and working hours terms in the employment contract were flexible because drivers were expected to complete all deliveries allocated to them during their shifts regardless of how long they took; working hours were averaged out between shifts where Mr Hudek worked more than his expected hours and shifts when he worked less. Mr Hudek’s contract therefore included an implied term that required Brake Bros to pay him for all additional hours worked above the excepted average if the actual hours were not averaged out within a reasonable period. Brake Bros’ failure to do this therefore amounted to an unlawful deduction of wages.

Brake Bros appealed the decision to the EAT.

EAT decision

The EAT upheld the appeal, finding that the employment tribunal erred in implying a term into Mr Hudek’s employment contract that he would be paid for additional hours worked above the expected normal working hours (after averaging out his shifts). A proper construction of the working hours and pay terms in the employment contract showed that Mr Hudek was entitled to his basic salary only for working five shifts per week of variable lengths, and only received overtime pay as expressly stipulated in the contract (i.e., after working more than an extra half-shift).

The EAT went further to conclude that neither business efficacy nor the unexpressed intention of the parties justified the implication of a term which gave Mr Hudek a right to additional pay for additional hours worked which were not averaged out against lower hours; the additional time was still part of Mr Hudek’s normal working hours. The flexibility in the contract’s existing pay terms therefore did not amount to a new implied term.

Key takeaways

This decision is a reminder that courts and tribunals should only imply terms into a contract if it is:

• 1. necessary to give effect to the contract; or
• 2. to enforce the obvious but unexpressed intentions of the parties.
• Employment contracts should be drafted carefully, with express terms on matters such as pay and working hours being clear, especially for roles with unpredictable or fluctuating working patterns.
• To minimise the risk of overtime pay disputes, employers should review clauses in their contracts on pay, working hours and overtime to consider whether they should be amended for clarity, or even whether current working practices may need to be adjusted to ensure that employees are clear on what entitlements are attached to their duties.

Augustine v Data Cars Ltd [2025] EWCA Civ 658

Less favourable treatment for part-time workers

Legal background to the case

Regulation 5(1) and (2)(a) of the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000 (“PTWR”): A part-time worker “has the right not to be treated by his employer less favourably than the employer treats a comparable full-time worker… on the ground that the worker is a part-time worker”.

Regulation 5(3) PTWR: “In determining whether a part-time worker has been treated less favourably than a comparable full-time worker the pro rata principle shall be applied unless it is inappropriate.”

Facts of the case

Mr Augustine was employed by Data Cars as a part-time private hire driver working on average 34.8 hours per week (his full-time comparator worked over 90 hours per week on average). All drivers were required to pay to Data Cars a ‘circuit fee’ of £148 per week to access its database.

Mr Augustine complained that imposing the flat fee on both full- and part-time drivers was contrary to regulation 5 PTWR.

The employment tribunal accepted Mr Augustine’s part-time status but dismissed his claim on the following bases:

• all drivers paid the same fee and, as such, he had been treated the same, and not less favourably, than a comparable full-time worker; and
• even if this was an example of less favourable treatment, such treatment was not solely on the grounds that Mr Augustine was a part-time worker.

Mr Augustine appealed the decision to the EAT.

EAT decision

The EAT considered two central questions in its decision:

1. Could the application of uniform policies, or treating everyone the same, amount to less favourable treatment?
2. Does the purported less favourable treatment have to be on the sole ground that the employee was a part-time worker, or could their part-time status merely be an effective and predominant cause of any less favourable treatment?

Question one: The EAT found that the employment tribunal had partially erred in its interpretation of regulation 5 PTWR. The EAT concluded that treating someone the same as others could amount to less favourable treatment, and the language of the PTWR did not preclude this conclusion when assessing the relevant ‘treatment’ against the proportion of hours worked. By applying the pro-rata temporis principle outlined in regulation 5(3) PTWR and Directive 97/81, Mr Augustine as a part-time driver was therefore treated less favourably because the fee was higher for him than for a full-time driver when assessed as a proportion of the hours he actually worked. As a result, his take-home pay (minus the fee) was comparatively lower than a full-time driver.

Question two: The EAT, however, agreed with the employment tribunal’s conclusion, albeit not without criticism, that, for regulation 5 PTWR to apply here, Mr Augustine’s part-time status must be the sole cause of the less favourable treatment. The rationale behind the EAT’s agreement was to maintain a consistency of approach on the interpretation of regulation 5(2)(a) PTWR, and it therefore felt bound by the Scottish Court of Session judgment in McMenemy v Capita Business Services Ltd [2007] which first applied this narrow interpretation. As a result, Mr Augustine could not rely on the protection of regulation 5 PTWR because, when compared to his comparator, even some full-time drivers were similarly affected by the impact of the flat circuit fee on their pay (the average working hours across all Data Cars drivers was 43.17 hours). There was evidence of less favourable treatment, but it arose from Data Cars’ failure to apply a fee that took into account hours worked, rather than intentionally treating part-time workers less favourably.

The EAT however separately clarified that, in its view, the test should be widened to consider whether a worker’s part-time status was the “effective and predominant cause” of the less favourable treatment, and that the focus when applying this test should be on the employer’s reason for imposing a flat fee rather than any perceived intention to treat part-time workers less favourably.

The EAT therefore allowed the appeal in respect of the first question. However, it dismissed the appeal on the basis of the second question, ultimately upholding the employment tribunal’s finding that regulation 5 PTWR did not apply to Mr Augustine’s claim.

Mr Augustine appealed the decision on the basis of the EAT’s position on question two and the application of the McMenemy case, which was brought to the Court of Appeal.

Court of Appeal decision

On 20 May 2025, the Court of Appeal unanimously dismissed the appeal, for different reasons. The majority judgement endorsed the EAT’s view that the McMenemy case was wrongly decided and that the correct test for applying the PTWR is whether a worker’s part-time status was the “effective and predominant cause” of the less favourable treatment. However, it was ultimately decided that applying McMenemy was still appropriate in the interests of maintaining a single, consistent approach to interpreting the PTWR across England, Wales and Scotland. A decision as to whether a tribunal or court can deviate from this has been left to the Supreme Court.

Key takeaways

• This decision explores the challenges of applying the PTWR, which may require tribunals and courts to balance the need for nuance against consistency.
• The continued adherence to the narrow “sole reason” test, even if tribunals and courts do not seem to be wholly convinced by it, illustrates that a high threshold is applied to claims under the PTWR, and therefore thorough evidence is needed to support claims that less favourable treatment is due to someone’s part-time status.
• Despite this, employers should remember to consider whether imposing uniform policies or practices as standard may inadvertently result in less favourable treatment to their part-time staff.
• Employers may wish to apply a pro-rata approach to certain internal practices to ensure all staff are treated equitably as far as possible. If there other practical or operational reasons why full- and part-time staff are treated differently, employers should make this clear to avoid the conclusion that the different treatment is solely because of part-time status.

Bari v Richmond and Wandsworth Councils [2025] EAT 54

Disclosure of information

Background to the case

This decision of the Employment Appeal Tribunal in this case considers the power of the employment tribunal to order a party to provide information to another party in answer to their questions, and the principles which should guide the tribunal when considering such an application.

The claimant, who was disabled by virtue of arthritis, brought multiple complaints under the Equality Act 2010. He sought a case management order for specific disclosure of information regarding reasonable adjustments made for other employees, setting out eight detailed questions, many of which had numerous parts to them. This was refused by the employment tribunal.

EAT decision

The EAT found that the tribunal had erred in its approach.

With regard to specific disclosure, the EAT made referred to three elements of the test i.e. (1) relevance, (2) necessity and (3) proportionality.

1. The EAT clarified that the tribunal should have provided a sufficiently reasoned decision indicating whether the claimant’s application was granted or refused, considering the relevance of the information to each of the claims brought by the claimant.
2. The EAT emphasised that the core test is whether disclosure is necessary for fairly disposing of the proceedings. The relevance test is a facet of that overall test and should be a logical starting point when considering such an application. A tribunal must consider how relevant something is and the likelihood of it being able to assist or detract from either party’s case or an issue in the case.
3. It needs to be considered whether it would be proportionate when looking at wider issues like privacy/confidentiality and the overriding objective.

An employment tribunal has the power to order information to be provided or specific questions to be answered. The EAT noted that a request for information or specific answers to questions is “conceptually distinct from a request for disclosure of documents”. However, tribunals can order the provision of information. When considering such applications, a tribunal must take a principled and reasoned approach in the same way it would for an application for disclosure of documents.

A key difference is that where a claimant’s request is purely for information and not the disclosure of an existing document, the process in complying with this has practical differences and may require considerable work to collate the information requested.

The EAT stated that “Fishing expeditions” are not permitted in either case.

ABC v Huntercombe (No 12) Ltd and others [2025] EWHC 1000 (KB)

Transfer of vicarious liability under TUPE

Background to the case

The claimant was seeking damages for injuries sustained while a patient at a hospital that was owned and operated by the first respondent (R1). The main issue was whether the liability of R1 for the alleged torts committed by two of its employees transferred to the second respondent (R2) when R1’s business was sold to R2.

High Court decision

The High Court held that vicarious liability did not transfer under TUPE.

The court needed to determine what “liabilities … in connection with” the employees’ contracts had transferred to R2. To determine this, the court considered the nature of vicarious liability, the precise nature of the liability that was suggested to have been transferred, and the purpose of the Acquired Rights Directive implemented by TUPE (i.e. safeguarding employee rights after a transfer of employment).

It was noted that existing case law dealing with the transfer of liability in connection with the transfer of employment contracts dealt exclusively with pre-transfer liabilities owed by employers to their own employees and not to third parties, such as the claimant in this case. No authorities had been decided at High Court level or above holding that vicarious (i.e. secondary) liability also transferred under TUPE.

The court determined that the connection between the liability of the transferor and the transferring employment contract must be “direct”, in the sense of being a liability that the transferor has to an employee. The High Court found that a transferor’s vicarious liability for torts committed by its employees prior to a TUPE transfer did not pass to the transferee.

The case focussed on the purpose of TUPE being to safeguard the rights of transferring employees after a transfer, i.e. rights or liabilities that have arisen in connection with a transferring employee’s contract of employment and directly connected to the employment relationship. The court held that since vicarious liability involves liability to a third party (rather than directly between the parties to the transferring employment contract) it is too remote to transfer under TUPE.

Neonatal care leave and pay

New statutory entitlements to neonatal care leave (NCL) and neonatal care pay (NCP) came into force on 6 April 2025. The government has published a suite of new guidance for employees and employers on NCL and NCP, including:

• Neonatal Care Pay and Leave – A guide for employees explaining entitlement, eligibility, how to claim, employment rights and how to cancel NCL or NCP.
• Statutory Neonatal Care Pay and Leave: employer guide – A guide for employers explaining entitlement, eligibility, employer record-keeping requirements, the financial assistance available to employers to pay NCP, and the information an employee must provide, their employment rights and how they can cancel NCL or NCP.
• How different employment types affect Statutory Neonatal Care Pay – A guide explaining the different NCP rules that apply to different types of employees and workers, including agency workers, directors and employees with more than one job with the same employer, or with more than one employer.
• Employee circumstances that affect payment of Statutory Neonatal Care Pay. 

Changes to permitted methods of document submission to the employment tribunal

New Presidential Practice Directions, which address the ways in which claims and responses may be presented to the employment tribunals, took effect on 21 May 2025.

The new Practice Directions require claims and responses to be presented either online, by post or in person. Email has been removed as a method of presentation, other than in exceptional circumstances where there is a fault with the online submission service, in which a claim or response presented by email must be accompanied by a screenshot of the error message generated by the online submission service confirming a system malfunction at the relevant time.

New minimum wage rates

The National Minimum Wage (Amendment) Regulations 2025 (SI 2025/401) came into force on 1 April 2025.

The new rates are as follows:

• National living wage (21 and over): £12.21 (6.7% increase).
• 18–20-year-old rate: £10.00 (16.3% increase).
• 16–17-year-old rate: £7.55 (18% increase).
• Apprentice rate: £7.55 (18% increase).
• Accommodation offset: £10.66 (6.7% increase).

Changes to injury to feeling awards

Following a recent Addendum to the Presidential Guidance on employment tribunal awards for injury to feelings, the so-called ‘Vento bands’ have been adjusted as follows to take account of the Retail Prices Index (RPI):

• A lower band of £1,200 to £12,100 (increasing from £1,200 to £11,700) for less serious cases.
• A middle band of £12,100 to £36,400 (increasing from £11,700 to £35,200) for cases which do not merit an award in the upper band.
• An upper band of £36,400 to £60,700 (increasing from £35,200 to £58,700) for the most serious cases.

Amounts in excess of £60,700 can be awarded in the most exceptional cases.

EHRC consultation on Services Code of Practice

The EHRC has launched a consultation on updates to its Code of Practice for services, public functions and associations (Services Code) following the judgment in For Women Scotland Ltd v Scottish Ministers on the meaning of “sex”, “woman” and “man” in the Equality Act 2010.

The consultation will close on 30 June 2025, and we understand that the EHRC aims to submit the final Services Code to the government by the end of July. No indication has been given of when the EHRC might update the Code of Practice on Employment.

Acas campaign to improve support for neurodivergent workers

Acas has launched a campaign to improve understanding and support for neurodivergent workers. The campaign is aimed at equipping employers with resources and advice to help foster a culture of belonging, where neurodivergent workers can thrive.

The focus of the campaign is on practical steps employers can take to make work environments more accessible, including:

• Inclusive hiring practices - Ensuring recruitment processes accommodate different cognitive styles.
• Reasonable adjustments – Providing tailored support, such as flexible work arrangements and assistive technology.
• Workplace awareness – Educating employers and staff about neurodivergence to reduce stigma and increase understanding.

Regulations increasing the amount of SMP which small employers can recover

The Statutory Maternity Pay (Compensation of Employers) (Amendment) Regulations 2025 (SI 2025/330) came into force on 6 April 2025, changing the provisions about recovery of statutory maternity pay (SMP) which apply to small employers. A ‘small employer’ for these purposes is an employer whose gross Class 1 NICs payments, including employer’s and employees’ shares, do not exceed £45,000 for the qualifying tax year.

Small employers, who are entitled to recover 100% of the SMP they have paid to employees, are also entitled to an additional payment, known as the ‘compensation rate’, to compensate for the employers’ National Insurance Contributions (NICs) which they must pay on SMP. The rate of payment was previously 3% of the SMP which a small employer has paid. The new regulations amend this percentage to 8.5% from 6 April 2025.