7OS01 Advanced Employment law (AC 1.3) and (AC 2.1)

7OS01 Advanced Employment law (AC 1.3) and (AC 2.1)

Employment law isn’t just about what’s written in legislation. It’s about how those laws show up in real offices, real people’s lives, and real decisions that HR professionals have to make, sometimes with limited time or messy facts. That’s what makes 7OS01 Advanced Employment Law in Practice such an grounding unit. You’re not just reading about 7OS01 Advanced Employment law (AC 1.3) and (AC 2.1) case law, you’re wrestling with it, figuring out what happens when theory and practice causes friction.

We’ve sat in workshops where the same question gets asked four different ways: “Can I actually dismiss someone if…” or “What if the policy didn’t cover that?” The thing is, employment law rarely offers clean answers. That’s both frustrating and strangely reassuring, it means judgement matters. And that’s where the real learning is.

Case study

Rose Hip Lodge is a nursing home located in a Welsh town. It houses 40 residents at any one time. Of these around half pay for their own care through private means, while the others have their fees met by the local authority. Rose Hip Lodge is one of six establishments owned by Mr Bradley Keepham. It is managed on a day-to-day basis by its matron, Mrs Jean Bunyon and her deputy, Ms Margery Shingles.

The permanent staff comprises five qualified nurses, five auxiliary nurses, two administrators and ten ancillary staff who undertake cleaning, catering and maintenance roles. Most of this latter group work on a casual basis with no regular weekly hours, coming in to work at Rose Hip Lodge when needed. Heavy additional use is made of agency-based nurse-bank staff so as to ensure that at least one qualified nurse and one auxiliary is present on the premises 24 hours a day, seven days a week.

Profit margins are tight and have recently become tighter still as result of increases in fuel prices and the need to undertake substantial maintenance work to comply with new health and safety regulations. As there is only very limited scope for increasing fees, Bradley has forced Jean to cut her food budgets. The re-decoration programme has also been suspended, resulting in a home which appears increasingly shabby and depressing.

In the last month, the financial situation has worsened. Five rooms have become vacant and have not been taken by new residents. As a result, the home is trading at a loss. There is no alternative but to look for ways of cutting back on the staffing budget. Bradley has asked Jean to put forward a plan which will result in savings of 5% immediately and 10% over the coming year. Her suggestions include the following:

i) Gerard was employed three months ago as a maintenance assistant. At his interview he was offered the job at a rate of £12.50 an hour, rising to £14.50 an hour provided he successfully completed a four-month probationary period. Jean believes, however, that because this was never put in writing it could be treated as an informal agreement. She thus proposes that Gerard’s pay is not increased next month, despite the fact that he has performed well in the role.

ii) Jean proposes to appoint new permanent members of staff on lower salaries than are currently paid to existing employees in each of the major staff groups and to include a stipulation that they work for longer hours each week. All jobs henceforth will be advertised at rates that are 20% below those paid to equivalent staff who are already employed and on contracts which simply specify that the hours worked each week will ‘vary according to the needs of the business’.

iii) Jean proposes to withdraw the Christmas bonus that has nearly always been paid in the past to all staff.

iv) Jean decides that she will need to make three people redundant – one qualified nurse, one auxiliary nurse and one member of the ancillary staff team. In order to keep the cost to an absolute minimum she decides that the best approach will simply be to dismiss the most recent starter in each case.

v) Jean decides that if she is to reach her target of a 10% reduction in staff costs, there is no alternative but for herself and her long-serving deputy (Margery) to reduce their hours, and hence their take-home pay. Jean herself will not lose out because she will be compensated by an increase in the profit-related bonus she receives each year. Margery, though, will be left several pounds a week worse off by the change, despite having more free time.

vi) A junior care assistant called Tanya has recently been employed on £8.60 an hour (i.e. the rate of the National Minimum Wage for people aged 18-20). Jean is aware that she will have to be paid a higher rate of £11.44 an hour once she reaches the age of 21 next month. She therefore proposes to seek agreement with Tanya to continue paying her at the lower rate or to dismiss her and to replace her with an 18-year-old school leaver.

Jean discusses each of her proposals with Bradley. He congratulates her and asks her to implement all of them without delay. 

Legal Risk and Employment Status at Rose Hip Lodge

Question 1 (AC 1.3): Explain how the level of legal risk associated with some of these proposals may vary depending on the employment status of the people employed at Rose Hip Lodge.

Let’s start with the basics, the kind of people who work at Rose Hip Lodge and how their jobs are structured. This matters more than it seems at first glance. When you’re under pressure to cut costs, as Jean clearly is, every decision about who to let go, who to pay less, or who to bring in cheaply starts rubbing against employment law. But the legal risks involved in those decisions depend heavily on the employment status of each person. And, in real terms, that status isn’t always as clear as a job title might suggest.

Permanent vs. Casual Employment: A Shifting Line

Take the ancillary staff, for instance. Most of them are on casual terms. They come in when needed, don’t have fixed hours, and on paper at least, don’t enjoy the same rights as permanent employees. That might make them seem like an easy target for savings. But here’s the thing, if someone has been working fairly regularly over time, even if they were technically hired as a casual, courts might see them as having built up employment rights. So, firing them without proper procedure, or significantly changing their pay or working conditions, could carry more risk than Bradley or Jean expect.

This kind of ambiguity is dangerous. In a setting where people may work three or four days a week for months on end, it becomes harder to argue that they’re “casuals” in the legal sense. If Jean dismisses someone like that too abruptly, it’s not just bad form, it could lead to an employment tribunal. And if it turns out they had rights she ignored, the costs could undo all the savings she was aiming for.

Agency Workers who pose a Legal Grey Area

Then we’ve got the nurse-bank staff, those working through an agency. Now, agency workers tend to have fewer rights against the organisation they’re sent to. Technically, their employer is the agency, not Rose Hip Lodge. That gives Jean a bit more room to manoeuvre, especially if she’s thinking of cutting hours or avoiding pay rises.

Still, it’s not completely risk-free. If an agency nurse has worked at the home for more than 12 weeks continuously, they’re legally entitled to the same basic pay and conditions as someone directly hired in that role. That means no dodging standard rates or benefits after that point. And if she tries to sidestep this by switching who’s on shift, there’s still reputational risk. Morale drops, quality of care dips, and soon residents start looking elsewhere, or their families do, which comes to the same thing.

Permanent Staff on Contracts, Promises, and Pitfalls

The trickiest area, perhaps, lies with the permanent staff. They’re the backbone of the place: the nurses, auxiliary carers, and admin team who turn up every day and keep things running. Here, employment law is much tighter. You can’t just decide not to honour a verbal agreement, even if it wasn’t written down, Gerard’s case is a prime example.

Jean’s thinking seems to be that because Gerard’s pay increase was never formalised on paper, it doesn’t count. But that’s risky. He was promised something specific at interview, he took the job on that understanding, and he’s now been working under those terms for three months. If he were to challenge this, if he could show that the higher rate was a key reason for accepting the job, he might well win. Employment tribunals don’t rely on paper trails alone; they also consider what was said, what was understood, and whether it was reasonable.

Then there’s the proposal to hire new people at 20% less pay and on contracts that allow hours to vary. It’s not unlawful to pay new staff differently, but there’s still risk. If those lower-paid staff are doing the exact same work as existing employees and word gets around (as it often does in small teams), it could lead to resentment. Over time, this may even trigger claims of unfair treatment, especially if pay differences seem arbitrary or discriminatory.

Redundancies and Selection as a Legal Tightrope

Redundancy is another area that seems simple, until it isn’t. Jean’s plan to lay off the most recent starters may look like a clean and cheap fix, but legally speaking, it’s far from watertight. Selection for redundancy has to be based on fair and objective criteria. Just picking people because they started last could be seen as lacking transparency. It may also discriminate indirectly if, for instance, newer staff happen to be younger or from minority backgrounds.

And then there’s the way these redundancies are carried out. Were they consulted? Were alternatives explored? If not, there’s a good chance of wrongful dismissal claims. Not to mention the damage to morale among those who remain.

Christmas Bonuses and Discretion

The Christmas bonus might seem like a small thing. It’s not contractual, Jean might argue, so she’s within her rights to cancel it. But this is a bit murky too. If the bonus has been paid consistently for years, enough that staff have come to expect it, it could be seen as an implied term of their contracts. Cutting it could, in effect, amount to a change in contract terms, requiring consultation or even formal agreement.

On a practical level, taking away something that feels like part of the culture, especially during a time of financial anxiety, might do more harm than good. Sometimes the savings on paper don’t make up for the drop in goodwill.

Managerial Sacrifice or Not Quite

The final issue, Jean and Margery cutting their hours is interesting. Jean’s shielded by a profit-related bonus, so her financial hit is minimal. Margery, though, just loses money. That feels unfair, especially when you consider the loyalty and service she’s put in over the years. While this decision doesn’t carry much legal risk on its own (managers often negotiate their own hours and pay), the ethical discomfort is real. And if Margery chooses to leave, that’s a huge loss of experience, and one more gap to fill.

Tanya’s Pay Rise and Age Discrimination

Let’s not forget Tanya. She’s about to turn 21, which legally means a higher minimum wage. Jean’s plan to either keep paying her the lower rate or sack her before the date comes is skating on very thin ice. Age-based pay differences are permitted under national law, but only if they follow set structures like the National Minimum Wage tiers. Trying to dodge a pay increase by replacing her with a younger worker could be viewed as age discrimination. It’s one of those things that might seem harmless until it hits the tribunal stage, and then it gets expensive.

Remember, when people talk about “cutting costs” in places like care homes, it’s often framed in numbers. But these numbers are tied to people, and people, with their rights, contracts, expectations, and emotions, bring unpredictability. That’s where the real risk lies. Not just legal, but relational, reputational, and cultural.

At Rose Hip Lodge, the cracks are already showing, empty rooms, shabby walls, a creeping sense of decline. Pushing staff to accept less, or treating them as interchangeable units, may slow the financial bleed. But it doesn’t stop it. And, if not handled carefully, it might well speed it up.

Not everything in Jean’s plan is legally wrong. Some of it may even be necessary. But what’s legal isn’t always wise. And what looks harmless in a spreadsheet might not survive first contact with reality, or with the people who keep that reality running day by day.

Discrimination Law and Staffing Cuts at Rose Hip Lodge: An Employment Risk Assessment

Question 2 (AC 2.1): What potential legal risks can you identify in respect of discrimination law? What defences might the company be able to put forward were any of these matters to come before an employment tribunal?

There’s something concerning about what’s happening at Rose Hip Lodge. On the surface, the matron, Jean Bunyon, is simply responding to financial pressures in a pragmatic way. Budget cuts, falling occupancy, rising operational costs, it’s a familiar story in the care sector. But when you look into her proposed staffing changes, things get murky. Possibly risky. Arguably, unlawful.

Let’s look more closely, because while Jean’s proposals may seem like clever cost-saving solutions at first glance, they reveal potential breaches of UK discrimination law, and the consequences of those could easily outweigh any short-term savings.

1. Gerard’s Informal Pay Agreement

Implied Contractual Terms and Age Discrimination

Jean’s first proposal is to withhold a promised pay increase from Gerard, the maintenance assistant. It’s subtle, yet significant. The promise of a raise from £12.50 to £14.50 was made verbally during his interview, contingent on successful performance. Now Jean argues it wasn’t formalised in writing and can therefore be ignored.

Here’s where things begin to crack.

Under UK employment law, verbal agreements can be binding, particularly if they result in the employee relying on them to their detriment. Gerard might reasonably claim he accepted the role based on that promise, and he’s since performed commendably. The Employment Tribunal may well view the verbal agreement as an implied contractual term.

Additionally, if Jean selectively enforces or revokes that agreement without valid business justification, there’s the risk though less direct of age discrimination or unfair treatment. If younger or more recently hired employees receive pay progression while Gerard does not, it could be construed as indirect discrimination if patterns emerge.

Potential Defence
The company might argue that without a written contract, no legal entitlement exists. They may also claim the raise was subject to formal appraisal or budget constraints. Still, that’s shaky ground if Gerard’s expectations were clearly set.

2. Hiring New Staff at Lower Rates with Variable Hours

Indirect Discrimination and Employment Contract Fairness

The next suggestion involves hiring new staff at a rate 20% lower than existing employees, with contracts specifying variable hours. From a purely operational standpoint, it appears to maximise flexibility and reduce overhead. But legally? It introduces multiple complications.

There’s an emerging risk of indirect discrimination, particularly against women and ethnic minorities, who statistically are overrepresented in lower-paid, casual care roles. If the new conditions make life significantly harder for people with caring responsibilities or those reliant on predictable hours, this practice may be challenged under the Equality Act 2010.

Also, the disparity in pay for equal work, with no objective justification, may provoke claims of equal pay violations. If two care assistants are performing substantially the same duties but are paid unequally, even if hired at different times, the older employee could raise a claim.

Potential Defence
The organisation may claim it is a necessary adjustment for business survival, especially in light of financial hardship. However, tribunals typically expect employers to demonstrate they considered less discriminatory alternatives first.

3. Withdrawal of the Christmas Bonus

Custom and Practice; Age Discrimination Risk

At a glance, cancelling the Christmas bonus doesn’t seem discriminatory, it affects everyone equally. But let’s pause. In employment law, a bonus that’s paid regularly over a number of years can become a contractual entitlement by custom and practice, even if not explicitly stated in the contract.

Cutting it abruptly may lead to breach of contract claims. Additionally, there’s a potential indirect age discrimination angle. Older staff, who may have structured their finances around these bonuses over time, could be disproportionately affected. Is that a stretch? Perhaps. But it’s not unthinkable.

Potential Defence
The business could argue the bonus was discretionary and not guaranteed. That defence is stronger if past communications always made that point clear. However, consistency over years undermines that argument.

4. Redundancy of the Most Recent Starters

Fair Redundancy Process and Potential Age Discrimination

Making redundancies is sometimes unavoidable. But how it’s done is everything. Jean proposes to simply dismiss the most recent starter in each staff group. This “last in, first out” approach might seem neat, but it’s not risk-free.

Firstly, it oversimplifies what should be a robust, criteria-based redundancy process. There must be fair selection methods, consultations, and consideration of alternatives. Failure to do so opens the door to claims of unfair dismissal.

Secondly, this approach can inadvertently discriminate against younger employees, who are more likely to be newer hires. If the dismissed individuals are all under a certain age, a tribunal might interpret that as indirect age discrimination, especially if older staff are unaffected.

Potential Defence
The company might argue that “last in, first out” is objective and avoids subjective bias. Still, tribunals generally expect a broader matrix of selection criteria to avoid unintended discrimination.

5. Reduction in Hours for Jean and Margery

Victimisation and Unequal Treatment

At first, Jean and Margery cutting their own hours might appear noble. But scratch the surface, and another issue emerges. Jean offsets her reduced salary through a profit-related bonus. Margery, however, receives no such compensation.

It’s not just unfair. It may border on victimisation, particularly if Margery has voiced concerns in the past or is perceived as less compliant. If Margery feels pressured into accepting reduced hours without a fair review, she may raise a grievance. Should her treatment follow a pattern, it could lead to claims of constructive dismissal.

Potential Defence
Jean may argue she is sacrificing equally and that bonus structures are part of the managerial remuneration scheme. That might hold water, though it’s not a good look if one senior woman loses income while another profits.

6. Tanya’s Pay Freeze or Replacement

Clear-cut Age Discrimination

Here’s where things get most legally perilous.

Tanya is currently paid £8.60 an hour, in line with the National Minimum Wage for her age group. When she turns 21 next month, her legal entitlement will rise to £11.44. Jean’s proposal is either to keep her at the current rate, illegally or to dismiss her and hire a younger, cheaper replacement.

This is direct age discrimination, as per the Equality Act 2010. It’s illegal to treat someone less favourably because of their age. It’s also a clear breach of national minimum wage legislation. This one isn’t murky. It’s black and white.

Potential Defence
Frankly, there is none. Even if Tanya agrees to continue at her current rate, that agreement is not lawful. The tribunal would likely take a dim view of this practice, and HMRC might get involved too.

In summary, the proposals at Rose Hip Lodge, while aimed at financial optimisation, introduce a legal risks, mostly related to discrimination and unfair employment practices. Some of them tread the line. Others cross it altogether.

What’s particularly striking is how easily these issues can escalate. One disgruntled employee, one anonymous tip-off, or one poorly-handled dismissal could spark a tribunal claim. And then, any savings from pay cuts or redundancies could vanish in the form of legal costs and reputational damage.

It’s worth noting that pragmatism without legal foresight rarely ends well. Had Jean involved a qualified HR advisor from the start, or even paused to consider the implications of each action more thoroughly, many of these risks could have been avoided or mitigated.

While Jean’s intentions might be to preserve the home’s future, the chosen methods invite considerable scrutiny. From informal agreements to underhanded dismissals and contract manipulation, each step carries legal consequences. If Rose Hip Lodge wishes to navigate this crisis with integrity and long-term sustainability, it must align cost-cutting with legal compliance, something that, in this instance, it has regrettably failed to do.

FAQs on 7OS01 Advanced Employment Law in Practice

1. What is 7OS01 Advanced Employment Law in Practice about?
It’s a unit that focuses on how employment law applies in actual workplace settings. Not just the legal texts, but how those laws are interpreted and acted upon day to day.

2. Do I need a legal background to take this unit?
Not really. You’re expected to understand HR contexts. The legal bits are explained as you go, often with cases or examples you can relate to.

3. What kind of topics are covered?
Discrimination, contracts, unfair dismissal, redundancy, tribunals, and employee rights. Plus, how all these play out in real disputes and decisions.

4. Is it theoretical or practical?
Very practical. You look at policies, legal decisions, case studies—stuff you might actually deal with if you’re in HR.

5. How is this different from basic employment law?
This unit goes deeper. It assumes you already know the basics and now need to think about interpretation, risks, and outcomes.