Welcome to the next edition of Employment Law Matters, our quarterly update on key issues in employment law. Every three months, we will send you a selection of the most important developments for employers in case law and legislation, including practical takeaways for employers as well as things to look forward to in the coming months.
CM Murray LLP are leading specialist employment law advisers to multi-national employers, senior executives and partnerships. If you have any topics you would like us to cover in our regular updates, please do get in touch.
Neonatal Care Leave changes
The Neonatal Care Leave and Miscellaneous Amendments Regulations 2025 (NCL Regulations) and the Statutory Neonatal Care Pay (General) Regulations 2025 (SNCP Regulations) will come into force from 6 April 2025.
These changes will entitle parents whose child requires seven days of neonatal care within 28 days of the child’s birth to take Statutory Neonatal Care Leave (“SNCL”) of up to 12 weeks which should be added on to any period of parental leave to which they are entitled.
Additionally, parents taking SNCL have the right to return to the same or similar role (depending on the circumstances of the leave and the business), and the right to not be subjected to a detriment for taking SNCL. In the event that their role is made redundant whilst on SNCL, they should be given priority for any alternative roles.
Employers will want to consider having an appropriate Neonatal Care and Leave policy in place. This leave entitlement should also be referred to in new employment contracts as a statutory leave entitlement.
Diversity trends on British boards
“Seeking gender equality is not a gimmick, it is a business imperative”
Since the first voluntary review of women on boards began in 2011 with the Davies Review, then the Hampton Alexander Review 2016-2020, the FTSE Women’s Leaders Review between 2021-2025, there has been “a seismic shift in the gender balance of women on British boards” from 9.5% on FTSE 350 in 2011 to 43.3% today. The current Review, published in February 2025, tags onto its FTSE350 company reviews, the largest 50 private companies and the next 50 private companies (which comprise smaller businesses).
The FTSE Women’s Leaders Review is a data led review; it acknowledges that diverse leadership teams “are not just a matter of fairness – they are essential for fostering innovation, driving performance and ensuring sustainable growth.” The business case for an inclusive and diverse culture is recognised as expanding creativity and productivity. Key to improving and sustaining gender equality in leadership roles is the promotion of a pipeline of female candidates for leadership roles. The government continues to support women in business, promoting female entrepreneurs and through legislative change better work life balance through extending parental leave, expanding childcare and flexible working.
The Review measures progress since 2024 – in the FTSE 350 companies women hold 43% of board roles; 35% of leadership positions, and the 50 largest private companies are within reach of the 40% target. There is slower progress in the next 50 private companies which report 30.5% women on boards with only small changes over 3 years. There has been an increase in the number of all male boards in the FTSE 350 from 5 to 7 and the number of boards which could be described as ‘one and done’ has remained relatively constant at 12.
Women comprise 36% of direct reports and 29% of executive committee members in the FTSE 350 which is similar in private companies.
The FTSE 350 measure the gender make up of the ‘four key board roles’, as they are important drivers for leadership and impact on the organisation. In the FTSE 350: 17% Chairs are now women; 22% of Finance Directors are now women; and women make up 56% of senior independent directors. The female CEO numbers have now fallen to 19%; in contrast the trend in female CEO’s is increasing in 50 largest private companies.
Of the functional board roles, HRD, GC, Co Sec, CIO, FD and combined GC and Co Sec – there is an increase in women holding these roles in the FTSE 350 suggesting the increase in women on boards is recruitment into these functional roles rather than the four key roles. Still work to do!
From a sector perspective, the companies in financial services, industrial goods and services – LLP Partnerships, media, and insurance are achieving 40% and above women on boards.
Companies reporting below 35% women on boards fall into the chemicals, construction, telecoms, energy, travel and leisure, automobiles and parts sectors. We do not particularly see any sectors in the FTSE 350 which are experiencing more difficulty than others in achieving the 40% women board diversity target.
Understanding Voluntary Redundancy
Voluntary redundancy occurs when an employer offers its employees the opportunity to voluntarily leave their role in the business, ahead of the business restructuring, reducing or removing roles, in return for a redundancy package. In almost all cases it is initiated by the employer, when it needs to cut headcount to save cost and will often be followed by a compulsory redundancy program, so it is not truly voluntary in the commonsense meaning of the word. Often, but not always, the employer will offer an enhanced redundancy package if the voluntary redundancy application is accepted subject to a statutory settlement agreement. This note offers useful a reminder where this doesn’t occur.Whether to offer voluntary redundancy
When preparing for a compulsory redundancy project, ACAS advise that an employer should offer its employees the opportunity to voluntarily leave their role in the business in return for a redundancy package. Whilst this is not mandatory, it often makes the introduction of a subsequent mandatory process easier for employees to deal with. This is because, if employees have a choice, it allows those who want to leave to be able to and cuts down on the number of compulsory redundancies that need to be made. However, it will remain the employer’s decision whether to accept volunteers; some may need to be retained for their skills, even if they volunteer. The fact that the decision ultimately rests with the employer, should be made clear from the outset to avoid upset.
Effect of accepting voluntary redundancy
If the application to be made redundant is accepted by the employer, then this employee will be treated as having been dismissed not resigned. It is important to note that if a voluntary redundancy application is accepted from an employee with over two years of service, then this employee will be entitled to a redundancy package. If their application to be made redundant is not accepted, then it is advisable to state that this will not affect their future prospects. Nonetheless, there is a risk that those who are not accepted may become demotivated, resulting in such employees seeking to engineer exits on a different basis with a payoff, which could be more costly to the business.
Is it a “dismissal?”
The question of whether a voluntary redundancy was a dismissal was considered in the EAT decision in Optare Group Ltd v Transport and General Workers Union [2007 IRLR 931], a case concerning the statutory obligation to carry out collective consultation where the employer is proposing to dismiss 20 or more employees by way of redundancy. The employer had accepted 3 volunteers and then made 17 employees compulsorily redundant. The employer, which was in breach of these consultation obligations, argued on appeal that the obligation under s 188 TULRCA had not been triggered, because 3 of the 20 were volunteers. The EAT dismissed the appeal on the basis that the volunteers had put themselves up for “dismissal” and their dismissal had been accepted by the employer. In such circumstances, a resignation or consensual termination of employment could and did amount to a dismissal.
Can it be an unfair one?
Volunteering for redundancy shall not prevent the employee from bringing an action for unfair dismissal unless of course there is a valid statutory settlement agreement in place. This is because during a voluntary process the employer bears the responsibility of following a fair process, just the same as in a compulsory redundancy process. This issue was dealt with by the EAT in White v HC-One Oval Ltd [2022 EAT 56]. The first instance employment tribunal had found that there was no reasonable prospect of success, and that the claimant could not claim for unfair dismissal on the grounds that she had volunteered to be dismissed and struck out her claim. The Appeal was allowed on the basis that the employment tribunal had been wrong in law not to consider the background reasons why the Claimant had felt obliged to volunteer for redundancy. There were issues of fact to be determined such that it could not be said that there were no reasonable prospects of success. The Judge found at paragraph 29 that “a claim of unfair dismissal in these circumstances cannot be assumed to be “fundamentally flawed”. All the more so, given the claimant was alleging that the employer deliberately manufactured the position such as to suggest that the redundancy process at that particular workplace was a sham.”
Conclusion
In the current climate, there are increasing numbers of voluntary redundancies taking place, across various sectors, including in the Civil Service and Post Office. Employers must tread carefully, as it is vital for employers to avoid unfair dismissals during large scale dismissals by following a fair process. Employers should keep in mind that the voluntary redundancy numbers will be included in the total number of dismissals, which is relevant to the necessity to complete a collective consultation process. The Government is consulting on lengthening the period of consultation for large scale redundancies and increasing the value of a protective award, where there is a failure to consult for the requisite period. With this increased legislative focus on redundancy and the risk of economic downturn, it is important to take advice when contemplating redundancies, to seek to prevent any claims arising.
Injury to feelings: Eddie Stobart Ltd v Graham case update
Injury to feelings awards are sometimes awarded by the Employment Tribunal (ET) in discrimination and whistleblowing cases to compensate claimants for the distress and upset they suffer, as a result of discriminatory or detrimental treatment. The awards are not punitive in nature and are assessed by reference to a scale known as the “Vento bands” (derived from a historic ET case). There are three bands (lower, middle and upper), which set out the award range and are reviewed each year, broadly in line with inflation. The Vento bands for 2025 are as follows:
- £1,200 to £12,100 (the lower band);
- £12,100 to £36,400 (the middle band); and
- £36,400 to £60,700 (the upper band).
In order to assess the appropriate level of an injury to feelings award, the ET should have regard to (a) the impact of the treatment on the individual’s personal life and career, (b) the individual’s vulnerability, and (c) the frequency of the treatment. Awards within the lower band are generally awarded where there was a “one-off” incident, whilst awards within the upper band may be awarded in the most serious cases (e.g. “lengthy campaign of discriminatory harassment”).
The recent case Eddie Stobart Ltd v Graham is a good reminder of how injury to feelings awards should be assessed. In this case, Ms Graham was made redundant seven months after she notified her employer that she was pregnant. The ET held that Ms Graham’s dismissal was not discriminatory, but the employer’s failure to enquire about her grievance was an unlawful act, which caused her a “degree of upset”. The ET awarded £10,000 to Ms Graham for injury to feelings despite making no finding that the treatment had an adverse effect on Ms Graham’s work or personal life.
On appeal, the Employment Appeal Tribunal (EAT) held that there was scant evidence before the ET of the extent of Ms Graham’s injury. Further, the failure to deal with the grievance was “limited in its scope and impact”, it was a “one-off” act with no suggestion that Ms Graham was humiliated or dealt with in a discourteous manner. Hence, the award within the middle Vento band was “manifestly excessive” and “perverse”, and the EAT reduced it to £2,000 (lower band).
The judgment set out some factors which are relevant in assessing injury to feelings awards, which employers should bear in mind, as follows:
- Awards will be higher if a case involves overt discrimination or any kind of ridicule or public acts of discrimination, or where there is a significant imbalance of power between the parties;
- It falls to the claimant in a case to show that their feelings have been injured, including showing the effect that the trauma may have had on their personal and working life.
Political or Philosophical Beliefs: Higgs v Farmor School case update
In our last newsletter we highlighted anticipated employment law changes in 2025, and that we anticipated an important decision from the Court of Appeal in the case of Higgs v Farmor School. Higgs concerned the dismissal of a school administrator who posted personal views about same-sex marriage and transgender issues being taught in schools on her private Facebook page which was brought to the attention of the school via an anonymous complaint.
The judgement, handed down in March 2025, was keenly awaited in part because the legal framework in philosophical belief cases is complex and arguably unclear. Recent decisions appeared to contradict one another, which left employers and practitioners uncertain on how disputes where two or more protected beliefs conflict in the workplace might be dealt with. Recent case law in philosophical belief cases has developed so that the European human rights law influences the judicial interpretation of the Equality Act 2010. As a result Courts have referred to direct discrimination claims being capable of objective justification (and as practitioners and employers will know, apart from age and disability which have slightly different frameworks, direct discrimination cannot typically be objectively justified. It was hoped that the Court of Appeal would simplify the legal framework, but sadly this does not appear to be the case, leaving this area of law complex and potentially open to legal challenge.
Nevertheless, there are some helpful takeaways for employers. The Court of Appeal found in favour of Ms Higgs. A finding of discrimination against Higgs for her dismissal was inevitable on the following basis:
Higgs’ beliefs – Christianity and gender critical beliefs – were held to be protected beliefs. Her conduct was a manifestation of that belief as there was a direct nexus between the belief and the conduct.
The Court then considered whether the employer’s response to the conduct was objectively justifiable which required the Court to consider whether dismissal was proportionate. It held that the employer’s actions were not proportionate.
Whether an action is proportionate will of course be fact dependent but in this case the following factors were held to be relevant
- Higgs had posted on a private account that was under her maiden name. This was not the name she used at the school (although the Court also acknowledged that Higgs had lived locally for many years and was known to work in the school);
- The school had carried out an investigation which found that there was no evidence that Higgs had ever expressed her beliefs to students in the school nor any evidence that she had ever treated students differently based on their gender identity or sexual orientation;
- Higgs had mainly reposted links containing comments found to be offensive rather than making offensive comments herself;
- The comments were considered to be offensive but not grossly offensive;
Ultimately, the Court found that the school could have taken a less severe action to address its concerns.
Disputes involving philosophical beliefs will not always be straightforward. The biggest takeaway here is that employers should avoid knee-jerk reactions in situations involving potentially protected beliefs and should carefully consider all relevant factors when assessing proportionality.
If you would like to discuss any of the topics covered in this update in more detail, please contact Partners Beth Hale or David Fisher, both of whom specialise in employment and partnership law issues for multinational employers, senior executives, partnerships, LLPs, partners and LLP members.
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