Raft of new employment laws keeps training on agenda despite costs pressures

As every employer will be aware, the Autumn Budget introduced significant cost pressures for most businesses, with some of the biggest financial hits taking effect this April. Employer National Insurance contributions are rising to 15%, and the National Living Wage is increasing by 6.7%, adding to payroll costs. With inflation still a concern, many firms are re-evaluating their budgets and training is one of the first areas under review. But is that wise given the huge raft of new employment rights on the way and new rights recently in force? We’ll ask our Head of Client Training.

A reminder. On 26 October 2024, the new duty to prevent sexual harassment came into force, requiring employers to take proactive steps to stop workplace harassment, or risk tribunal claims with increased compensation awards. We also have the Employment Rights Bill which is currently making its way through parliament bringing sweeping changes to employment law, including day-one unfair dismissal rights, new restrictions on zero-hours contracts, and the right to request flexible working from day one. 

This puts HR Directors in a difficult position. They understand that training managers and staff on these changes is essential, but in the current climate a strong business case is needed to persuade boards that the cost is justified. 

So, how can HR Directors convince their boards that training isn’t just a ‘nice to have’ but is an essential requirement which makes perfect business sense? Earlier I caught up with Head of Client Training Trish Embley to discuss this point. First question, which of the many reforms coming down track would she flag to boards first and foremost?

Trish Embley: “I think what's going to be really significant is the removal of the two-year rule to claim unfair dismissal and instead managers being given a sort of initial probationary period where, following whatever process is laid out, they can still fairly dismiss. Now what we know over the years from training is that managers don't always focus very much on probationary periods. They're allowed to slide, or performance issues aren't picked up and people can suddenly find that they haven't passed their probation but nothing's been said and really this change to the law is going to put more emphasis on, I think, particularly performance management right from day one. Performance management isn't easy so that's an area where, I think, there's going to have to be some investment to prevent business risk and the risk of claims. So that's just one area. The other significant change, I think, with the Employment Rights Bill is I think we will see an increase in flexible working claims. We've seen a lot in the media about businesses moving towards getting people back to the office and some people not wanting to go back to the office. So I think once the law is passed that says not only do people have the right to request flexible working but any refusal has to be on reasonable grounds. That's a very broad term and guidance needs to be provided to managers about how they tackle these requests and where they can say yes, where they can say no. So really, there's so much change going on that I think it would be very risky to pull back on the training that covers managing these risks.”

Joe Glavina: “When it comes to training managers on handling workplace issues documentation is often an area where mistakes are made. It’s a vital area isn’t it?” 

Trish Embley: “Yes, absolutely, and I think where managers sometimes can forget to document is in informal conversations. So in our training we tend to tell managers it's okay for things to be informal, but they shouldn't be invisible. So if you think about those initial stages of employment again, going back to the probationary periods, there's probably going to be a lot of informal chats and corrections, but then how do you prove that that actually happened and so showing some sort of process in the probationary period is going to be important. So remembering to document that is going to be something that managers are going to have to develop as an everyday practice.”

Joe Glavina: “I see the average unfair dismissal tribunal award is these days around about £14,000 and, of course, discrimination and harassment awards regularly exceed six figures. It puts the cost of training programmes into perspective doesn’t it, Trish?.” 

Trish Embley; “Oh yes, absolutely that, but also the hidden costs. I mean, there's legal fees, but management time, HR’s time, in dealing with the claim. So if you just talk witness statements, the time that might be needed to go to a tribunal. I've even known clients who have to decide, well, this senior manager, which is the least bad option? Do they not go to tribunal and we'll just have to lose the tribunal or not go on maybe a big pitch for business or do something within the business that is quite critical. So on top of focusing just on the awards that the tribunal make, there are lots of indirect costs associated with dealing with litigation.”

Joe Glavina: “With so many legal changes happening, what are the most pressing areas where managers need training right now in your view?”

Trish Embley: “Well obviously, and we've seen this trend for a while, clearly the duty to prevent sexual harassment because in addition to tribunal claims there is of course the reputational harm and damage and that the prospect of enforcement by the Equality of Human Rights Commission. So put that at the top. I think the other one I would look at as well is we've seen from the government a move towards getting people who may have been off long-term sick back to work. So, I think exploring with managers the scope of the duty to make reasonable adjustments, the business case for getting people have been on long term sick back to work, particularly if all that is needed is some fairly easy to accommodate reasonable adjustments. Then in addition, we tend to train on what we call the essential ‘three-pack’ of manager training - carrying out investigations appropriately, conducting hearings fairly, and managing performance and sickness absence.”

Given the huge raft of changes on the way, many of our clients are now engaging with us to plan their training programmes for the months ahead to be ready when the various new laws come into force. If you would like help with your training programmes please do contact Trish Embley – her details are there on the screen for you or, of course, you can contact your usual Pinsent Masons adviser.