Employment Law: What we are expecting in 2024

Employment law and HR

Employment law is never quiet, but post Brexit and as a Labour Government prepares to take office, this year is perhaps going to be exceptionally busy for employers, HR professionals and employment lawyers.

In recent months, there have been multiple announcements which will significantly affect employers and employee in 2024 and beyond, with a strong focus being placed on striving to make the workplace fairer.

This article aims to summarise the main developments to ensure understanding of upcoming events in employment law and any prior preparation that is advisory. It is important that employers remain ahead of these changes and any action that will need to be taken.

The general election and employment law

The King’s Speech

(Article updated following The King’s Speech: 18 July 2024)

Following the King’s Speech yesterday, we have more detail to share in terms of new employment legislation: the Equality (Race and Disability) Bill and the Employment Rights Bill. The Prime Minister’s Office has published background briefing notes, but we are still waiting to see the draft bills themselves.

The Equality (Race and Disability) Bill will “enshrine the full right to equal pay law” for ethnic minorities and disabled people, which the briefing notes claim will make it easier for them to bring pay discrimination claims. It will also introduce mandatory ethnicity and disability pay reporting for employers with 250 or more employees.

The Employment Rights Bill will:

ban ‘exploitative’ zero-hour contracts
end the practice of ‘fire and rehire’
make parental leave, sick pay and protection from unfair dismissal a ‘day one’ right (subject to probationary periods for new recruits)
remove the lower earnings limit for sick pay, as well as the three-day waiting period
make flexible working the default from day one for all workers, with employers required to accommodate this as far as is reasonable
strengthen protections for new mothers, by making it unlawful to dismiss a woman who has had a baby for six months after returning to work, with some specific exceptions
create a new Fair Work Agency, for enforcement of workplace rights
introduce a Fair Pay Agreement in the adult social care sector and, following review, assess how and to what extent such agreements could benefit other sectors
reinstate the School Support Staff Negotiating Body, to establish national terms and conditions, career progression routes and fair pay rates
remove unnecessary restrictions on trade union activity
ensure workers have a reasonable right to access a union within workplaces.

Labour Government prepares to take office following the general election

Labour’s manifesto contained significant plans for employment law changes. Following the result of the general election, we can expect to see draft legislation relating to many of these changes within the next 100 days. The release of various pieces of draft legislation will mean that the precise details of Labour’s plans will become clearer, before they are eventually finalised and passed. However, in broad terms, here are just a few of the changes that are on the horizon:

Unfair dismissal to become a day 1 right (with detail awaited as to the status of the probation period);
A ban on “exploitative” zero hours contracts;
For employers with 250 plus employees, an obligation to publish ethnicity and disability pay gap reports, as well as a menopause action plan; and
Toughening up of the laws relating to sexual harassment at work, with complaints about such conduct likely to automatically be classed as whistleblowing.

There are numerous other proposals/promises, and employers need to ensure that they are informed about (and prepared for) the obligations they will be under when these new laws come into force. The timescales are currently unknown, but the new Government certainly appears committed to implementing change sooner, rather than later.

Holiday Pay, TUPE and Working Time regulations

The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023, was published in November 2023, with the legislation effective as of 1 January 2024. The regulations affect Holiday pay, working time regulations and TUPE.

Holiday pay

Following perceived unfairness of the Supreme Court’s decision in Harpur Trust v Brazel [2022] which led to a situation whereby part-year workers can receive proportionately more paid holiday, relative to the hours they have worked, than others, regulations are proposed (coming into force 1 April 2024) that remove “irregular hour workers” and “part-year workers” from the existing holiday provisions. Instead, they will accrue hours of holiday based on 12.07% of the hours worked in the previous pay period. Alternatively, employers will be permitted to pay rolled-up holiday pay to irregular hour workers and part-year workers.

For workers on sick leave or other family-related leave, accrual will be based on average working hours over a 52-week reference period.

Working Time Regulations (WTR) 1998

The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023, made various changes to the Working Time Regulations (WTR) 1998. These include:

Simplifying the record-keeping requirements under the WTR 1998 to maintain “adequate” records, instead of a “full record” of all daily working hours.
Restating in domestic legislation the legal right to carry forward holiday in certain situations, including (among other things) inability to take holiday as a result of sickness and family leave.
Restating in domestic legislation the concept of “normal remuneration” into holiday pay, to include (among other things) commission and regular overtime.
Repealing the COVID-19 holiday carry-over rules, with a short transitional period to enable any accrued leave to be taken.

TUPE (Transfer of Undertakings Protection of Employment rights)

For transfers taking place from 1 July 2024, the requirement to elect employee representatives will be removed for employers with fewer than 50 employees and employers of any size involved in a transfer of fewer than ten employees. The employer will be able to consult directly with employees, where no employee representatives are in place.

Flexible working requests

(Expected April 2024)

New regulations mean that employees will have the right to request flexible working from ‘day one’, this includes agency staff and means that:

Employees will no longer have to explain what effect their requested change may have on the employer and how any such effect might be dealt with
Employees will be entitled to make two requests (instead of one) in any 12-month period
Employers will not be able to refuse a request unless the employee has been consulted
Employers will have to make a decision in two months (reduced from three months), subject to agreeing a longer decision period.

Employers must prepare accordingly by ensuring complete understanding of legislative changes and update their workplace policies to reflect this.

Right to request predictable contractual hours.

(Expected September 2024)

This right extends to any workers ‘where there is a lack of predictability, in relation to the work that the worker does for the employer.’ This extends beyond the number of hours worked, but the days and times on which these hours fall, as well as the period for which the worker is contracted to work. This act is thought to work in a similar manner to right to request flexible working. Employers should ensure they understand employees’ rights in order to correctly grant predictable contractual hours to those who require it.

Carer’s Leave

(6 April 2024)

Employees can apply for up to one week of unpaid carer’s leave in any rolling 12-month period. There is no minimum service to qualify for the right. Employees must have a dependant with a long-term care need and be taking the leave to provide care or arrange care for the dependant. Employees will be protected from detriment or dismissal should they choose to take carer’s leave. Employers must understand employees’ rights, as well as ensuring that company legislation and policies are updated.

Duty to prevent sexual harassment: The new Worker Protection Act

(October 2024)

The new Worker Protection Act, which comes into effect in October 2024, creates a duty on employers to take ‘reasonable steps’ to prevent sexual harassment of their employees in the workplace. To comply with the new legal standards, employers should consider implementing various measures such as harassment and bullying policies, employee training on sexual harassment and bullying, continuous training and policy updates.

Neonatal care and leave pay.

(Expected April 2025)

Under this legislation, employees who are parents of babies requiring neonatal care will be entitled to 12 weeks of paid leave. To apply for this, employees will need to be employed for 26 weeks prior to the leave being requested with an average earning of at least £123 a week. This Bill was passed in May 2023 and is expected to be implemented in April 2025. Parents who take neonatal leave and pay are entitled to return to the same job after their period of absence. Employees must ensure they update policies and understand employees’ rights.

Non-Compete Clauses

There is currently no maximum duration for non-compete clauses and an employer will generally be able to enforce a non-compete clause if it can prove that it is a reasonable restriction which goes no further than is necessary to protect a legitimate business interest. However, in May 2023, the government published its response to the 2020 consultation on measures to reform post-termination non-compete clauses in employment contracts, proposing a statutory cap on non-compete clauses of three months.

Primary legislation will be required to implement this, but the government has stated it will be introduced “when parliamentary time allows”. No timeframe has yet been outlined for such legislation and the King’s speech in November 2023 made no mention of the reform. We, therefore, propose that the likelihood of it being implemented before the general election is fairly low.

Updates on extensions to redundancy protection for pregnant women and returners and tips and gratuities (other changes set to be implemented in 2024) are detailed within current articles.

If you should have any concerns or questions regarding the upcoming changes that we have discussed, or would like to know more about any other changes that will affect employment law, please use the form below to contact our experts.

We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.