Predicting a tranquil year ahead in employment law is infrequent, and indications suggest that 2024 will not deviate from this pattern.
What lies ahead?
Flexible working
Starting April 2024, employees will have the right to request flexible working arrangements from the very first day of their employment. They can make up to two such requests per year, and the existing obligation for employees to specify how their request might impact the employer’s business will be eliminated.
According to the Employment Relations (Flexible Working) Act 2023, employers will be required to communicate their decision on the request to the employee within a two-month timeframe. This legislative change aims to enhance flexibility in the workplace and streamline the process for employees seeking flexible working arrangements.
Holiday pay changes
Effective from holiday years starting on April 1, 2024, there will be modifications to rolled-up holiday pay and the holiday pay accrual system for irregular workers.
Employers will now have the option to utilize rolled-up holiday pay for irregular-hours and part-year workers, where the holiday pay is added to the worker’s hourly rate and paid when they perform the work instead of during the holiday period.
The holiday pay for irregular hours and part-year workers will be calculated at a pro-rated 12.07% of hours worked in any pay period, with a cap set at 28 days per year. These changes aim to simplify the calculation process and reverse the complications introduced by the Supreme Court’s 2022 decision in Harpur v Brazel.
While the carry-over of holiday due to challenges in taking time off during busy periods, such as those brought about by Covid, will be eliminated, workers will now be permitted to carry over their accrued but unused holiday days if they are unable to take the full entitlement due to family leave or sickness.
Family-friendly leave
Two noteworthy family-friendly changes are set to take effect this year:
- The Carer’s Leave Act 2023, effective from April, introduces a day-one right for carers to take a week of unpaid leave per year to care for a dependant. This right applies to dependants such as a spouse, civil partner, child, or parent of the employee, as well as those residing in the same household or reasonably relying on the employee for care.
- The Protection from Redundancy (Pregnancy and Family Leave) Act 2023, also coming into effect in April, extends the right to first refusal of an alternative role in the event of redundancy. This extension now includes pregnant employees and, for those returning to work after parental leave, the protection extends up to 18 months following the birth or placement of the child. Previously, this protection applied only to employees on maternity, adoption, or shared parental leave.
Off-payroll rules
Starting in April 2024, new rules regarding off-payroll working, commonly known as IR35, will be implemented, specifically when a worker is engaged through their personal services company. These changes, a result of industry lobbying, are seen as favorable for employers.
Under the new rules, if an employer is required to settle PAYE (Pay As You Earn) retrospectively due to an incorrect determination of an engagement as one of self-employment, the tax already paid by the worker and their personal service company on the same income will be eligible for offset against the employer’s PAYE liability. This marks a departure from the current rules, where such offsetting is not possible, leading to the payment of ‘double tax’ on the same income and causing employers to incur excess PAYE costs. These changes will apply to payments made from April 6, 2017.
TUPE consultation amendments for small businesses
Starting from July 1, 2024, under the Employment Rights (Amendment Revocation and Transitional Provision) Regulations 2006, businesses undergoing TUPE transfers will have the option to directly inform and consult with employees. This applies specifically to businesses with fewer than 50 employees or those where fewer than 10 employees are affected by the transfer, provided that there are no existing employee representatives in place.
This regulatory change is expected to be advantageous for smaller businesses, as it eliminates the need for them to go through the process of having employees elect representatives and follow a collective consultation process related to the TUPE transfer. The direct communication and consultation approach aim to streamline the process for businesses with a smaller workforce in such situations.
Protection against sexual harassment at work
Commencing in October 2024, a new law will be enacted, compelling employers to take reasonable measures to prevent sexual harassment of their employees within the workplace.
The Worker Protection (Amendment of Equality Act) Act 2023 will empower tribunals to enhance compensation awards in cases of employee sexual harassment. Additional guidance from the Equality and Human Rights Commission is anticipated. Employers will be required to ensure that their policies and training are current, taking a more proactive stance in safeguarding their employees’ well-being in the workplace.
Minimum wage increases
Starting in April 2024, the National Living Wage hourly rate will undergo an adjustment, increasing from £10.42 to £11.44. Additionally, this rate will now apply to workers from the age of 21 and above. This change reflects an effort to ensure fair and improved wages for workers in the specified age group. Employers should be aware of this adjustment and update their payroll practices accordingly to comply with the new National Living Wage rate.
Our predictions
A Labour win?
The Prime Minister has indicated the possibility of a general election in the “second half” of the current year.
In the event of a Labour victory, as per current polls, the Shadow Deputy Prime Minister, Angela Rayner, has committed to implementing the party’s New Deal for Working People within the initial 100 days of assuming office. This comprehensive plan encompasses banning zero-hours contracts, putting an end to fire-and-rehire practices, addressing the gender pay gap, and tackling sexual harassment in the workplace. These proposed measures underscore Labour’s commitment to significant reforms in the realm of employment and worker rights.
Limits to non-competition clauses?
In May 2023, the Government announced its intention to implement a statutory limit of three months on non-compete clauses in employment contracts and certain worker contracts.
While there is no specified timeframe for the enactment of these changes, with implementation anticipated only “when parliamentary time allows,” employers may want to be mindful of these plans. It could be advisable for employers to review and adjust their post-termination restrictions, considering the potential statutory limit, and possibly extending notice periods accordingly. This proactive approach allows employers to align their practices with the anticipated regulatory changes once they come into effect.
New working patterns rights in force?
Under the Workers (Predictable Terms and Conditions) Act 2023, workers on atypical and zero-hours contracts will gain the right to request more predictable working patterns and hours. This move is part of the government’s efforts to address what it deems “unfair working practices.”
While this legislation is anticipated to come into force later this year, the exact date has yet to be confirmed. Importantly, it will remain within an employer’s discretion to accept or reject such requests from workers, providing some flexibility for employers in managing their workforce. This development aims to enhance predictability and fairness in working arrangements for those on atypical and zero-hours contracts.
Women’s health taking centre stage?
In 2024, there is an emerging focus on women’s health within the realm of employment law, with particular attention directed towards fertility, menstrual cycles, and menopause. This signifies a growing acknowledgment and consideration of women’s health needs in the workplace, reflecting a broader effort to address and support various aspects of women’s well-being throughout their careers. This trend suggests a potential evolution in employment policies and practices to better accommodate and prioritize women’s health concerns.
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