Key Updates in Employment Law: May 2023 – Mental Health, Ethnicity Pay Gap, and Restrictive Covenants

Employment Law Update: New Guidance on Mental Health, Ethnicity Pay Gap Reporting, and More

In the ever-evolving landscape of employment law, staying informed is crucial for both employers and employees. This month’s employment law update brings you the latest key cases and developments that could impact your workplace.

One of the key highlights in this month’s bulletin is the new guidance published by ACAS on mental health and ethnicity pay gap reporting. While not legally binding, following ACAS guidance can be beneficial for employers facing claims, showcasing a proactive approach to addressing challenging issues.

Ethnicity pay gap reporting, unlike gender pay gap reporting, is not mandatory for businesses. However, some employers choose to voluntarily report on their ethnicity pay gap. The government has recently released guidance for employers on collecting ethnicity pay data, conducting calculations, and reporting findings. This guidance emphasizes the importance of taking an evidence-based approach to address any disparities.

Another significant development is the consultation on the government’s proposed Code of Practice on dismissal and re-engagement, commonly known as “fire and re-hire.” The consultation period ended in April 2023, with ACAS expressing support for the policy objective of exploring alternatives to dismissal and engaging in meaningful consultation with employees. However, ACAS has raised concerns about the current draft of the Code, highlighting uncertainties around its scope and potential unintended consequences.

In a recent case on the interpretation of restrictive covenants, the Court of Appeal clarified the principles governing the enforcement of post-termination restrictions. The case involved a senior employee resigning to join a competitor, triggering a non-competition restriction in his contract. The court upheld some deletions from the restriction, emphasizing the need for employers to draft restrictions that are reasonably necessary to protect their legitimate business interests.

As the legal landscape continues to evolve, it is essential for employers and employees to stay informed and proactive in addressing employment law issues. Stay tuned for more updates and insights on the latest developments in employment law.