July 24, 2023

UK Employment Law Update: Family Acts, UK Government Legislative Proposals and Recent Case Developments

At a Glance

  • The UK government has passed three family-related Acts that employers should be aware of: the Neonatal Care Act; the Protection from Redundancy Act; and the Carer’s Leave Act.
  • The UK government also abandoned the so-called Brexit ‘Sunset Clause,’ and published a policy paper on noncompete restrictions and working time regulations following Brexit.
  • UK courts have also made notable rulings on noncompete restrictions, and COVID-19-related health and safety detriment claims.

Legislative Changes

Three Family-Related Acts Become Law

On 24 May 2023, the following three Acts became law:

  1. Neonatal Care (Leave and Pay) Act 2023: Eligible employees whose newborn baby is admitted to neonatal care will be allowed to take up to 12 weeks of paid leave in addition to other leave entitlements, such as maternity and paternity leave.
  2. Protection from Redundancy (Pregnancy and Family Leave) Act 2023: Redundancy protections will apply from when an employee informs their employer that they are pregnant until 18 months after the birth. Employees taking adoption or shared parental leave will also receive enhanced protections.
  3. Carer’s Leave Act 2023: Eligible employees who are caring for a dependant with a long-term care need will receive a new, flexible entitlement to one week of unpaid leave per year.

Further details of the above Acts and their commencement dates are still awaited.

UK Government Abandons ‘Sunset Clause’

On 10 May 2023, the UK government tabled an amendment to the Retained EU Law (Revocation and Reform) Bill to replace the current ‘sunset’ clause, under which almost all retained EU law was to be revoked. Instead, only a targeted list of around 600 pieces of retained EU law will be revoked at the end of 2023. Any retained EU law not listed will be automatically retained and remain mandatory unless specifically repealed.

UK Government Policy Paper: ‘Smarter Regulation to Grow the Economy’

On 10 May 2023, the UK government published a policy paper outlining certain proposed employment law reforms following Brexit:

  • Noncompete Restrictions: Post-termination noncompete restrictions in employment contracts would have a statutory limit of three months.
  • Working Time Regulations: The current EU ‘basic’ four-week leave entitlement and UK ‘additional’ 1.6-week entitlement would be merged to create one annual entitlement, and ‘rolled-up’ holiday pay would be allowed.
  • TUPE: The current requirement to consult with appointed representatives would be removed for businesses with fewer than 50 employees and transfers affecting fewer than ten employees.

Post-Termination Noncompete Restriction

In Boydell v NZP Ltd [2023] EWCA Civ 373, the Court of Appeal considered the enforceability of a 12-month noncompete restriction.

Dr Boydell was employed as Head of Commercial (Specialty Products) at NZP, a business which develops, produces and sells bile acid derivatives for sale to pharmaceutical companies. Dr Boydell’s employment contract with NZP contained a noncompete restriction preventing him from working for any competitor of NZP or its group companies for 12 months after the termination of his employment.

Dr Boydell resigned in October 2022 stating his intention to work for NZP’s main competitor. Shortly before his employment was due to terminate in January 2023, NZP sought an injunction against Dr Boydell seeking to enforce the noncompete restriction and prevent him from joining the competitor.

The Court of Appeal considered that, as drafted, the restriction was overly wide as its aspects which related to the activities of NZP’s group companies went further than reasonably necessary to protect NZP’s legitimate business interests. This is because those aspects would have prevented Dr Boydell from working for companies (such as Boots or Superdrug) that produced far more general pharmaceutical products than acid bile products. However, the Court found that those aspects could be severed (i.e., struck out) and, on that basis, it upheld the remainder of the restriction which related solely to NZPs acid bile product activities. The injunction was therefore granted.

This case demonstrates the importance of careful drafting of post-termination restrictions to ensure that they go no further than is reasonably necessary to protect a legitimate business interest. While a court may, as in this case, sever wording to make a restriction enforceable, such decisions are highly fact sensitive.  It should also be noted that the UK government is currently proposing to introduce a three-month limit on post-termination noncompete restrictions, although the timing of this proposal is still unclear.

COVID-19: Health and Safety Detriment Claims

In Miles v Driver and Vehicle Standards Agency [2023] EAT 62, the Employment Appeal Tribunal (EAT) considered claims for health and safety detriment and dismissal in the context of the COVID-19 pandemic.

Mr Miles, who suffered from a chronic kidney disease, was employed by the Driver and Vehicle Standards Agency (DVSA) as a driving examiner. In March 2020, all but critical driving tests ceased due to the COVID-19 pandemic. In July 2020, tests resumed and examiners were required to return to work, including those who (like Mr Miles) were considered to be ‘clinically vulnerable’, but not those considered ‘clinically extremely vulnerable’. Despite the DVSA putting several measures in place to mitigate health risks, Mr Miles refused to return to work due to concerns for his health. His pay was stopped and in August 2020 he resigned. He brought a number of claims, including health and safety detriment and dismissal claims.

The EAT held that Mr Miles’s claims for health and safety detriment and dismissal should fail because one of the limbs of the test for bringing such claims had not been met. Namely, Mr Miles’s belief that his health and safety would have been in serious and imminent danger if he had returned to work was found by the EAT to be unreasonable, given the measures that the DVSA had implemented.

This case provides an important reminder of the test for bringing health and safety claims, as COVID-19-related cases continue to trickle through the UK courts and tribunals. 

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