13.12.2023
This year has seen a raft of employment related Bills complete their passage through Parliament, bringing change across a variety of areas including flexible working, protection from redundancy and sexual harassment. The Government has also recently published new Regulations to amend some of the rules on TUPE and – more significantly – on holiday entitlement and pay. Below, we summarise the key developments and engage in a bit of speculation as to the year ahead.
New employment legislation
Various employment related Bills have received Royal Assent during 2023. Most of the following laws are expected to come into force in 2024:
- The Flexible Working Act 2023 (and related Regulations) will change the statutory flexible working regime in various ways, including making the right to request flexible working a “day one right”. The Regulations are due to come into force on 6 April 2024, meaning that the requirement to have 26 weeks of continuous employment will not apply to applications for flexible working made on or after that date.
- The Protection from Redundancy (Pregnancy and Family Leave) Act 2023 will extend the redundancy protections that currently apply to employees on maternity, adoption and shared parental leave to employees who are pregnant or who have recently returned to work from such leave. Again, these changes are expected to take effect from 6 April 2024.
- The Carer’s Leave Act 2023 will give employees who have a dependant with a long-term care need a statutory right to one week’s unpaid care leave per year. This right will come into force from 6 April 2024.
- The Workers (Predictable Terms and Conditions) Act 2023 will introduce a statutory right for eligible workers to request a more predictable working pattern (expected in September 2024).
- The Worker Protection (Amendment of Equality Act 2010) Act 2023 will introduce a new duty on employers to take reasonable steps to prevent sexual harassment at work (due to come into force from October 2024).
- The Neonatal Care (Leave and Pay) Act 2023 will allow eligible employed parents whose newborn baby is admitted to neonatal care to take up to 12 weeks of paid leave. The exact timeframe for implementation of this legislation is not yet known, but the new leave and pay entitlements are not expected to come into force until April 2025 (to coincide with the start of a new tax year and give employers, payroll providers and HMRC time to prepare).
For further details on each of the above Acts, see here. Our policy team has been engaging with Government on these issues and will continue to do so as the various Regulations are developed. Once these provisions come fully into force, employers will need to update their policies and ensure that HR and line managers understand how to comply with the new laws.
Newly published Regulations
The Government consulted on various possible changes to the rules on holiday entitlement and pay, and in relation to the Transfer of Undertakings (Protection of Employment) Regulations (TUPE), during 2023. Its recently published response to the consultation and draft Regulations confirm that the following legislative changes will go ahead:
- Holiday entitlement and pay: The Government will clarify the record-keeping requirements under the Working Time Regulations 1998 (WTR), and restate certain principles relating to the elements of pay that must be included in ‘normal remuneration’ for holiday pay purposes, and workers’ rights to carry-over holiday. These provisions will come into force from 1 January 2024. The Government will also introduce a new annual leave accrual method of 12.07% of hours worked for irregular hours and part-year workers, and allow employers to pay these workers ‘rolled up’ holiday pay provided certain conditions are met. This new regime will be applicable in respect of holiday years beginning on or after 1 April 2024. For employers whose holiday year follows the calendar year, this means that the new provisions will apply from 1 January 2025. For further details, see here.
- TUPE: The TUPE Regulations will be amended to allow direct consultation with employees (rather than the current requirement for representatives to be elected if appropriate representatives are not in place already) in situations where either: the business has fewer than 50 employees; or the proposed transfer involves fewer than 10 employees. This change will apply for TUPE transfers taking place on or after 1 July 2024.
Note that the Government’s decision not to take forward its earlier proposal to remove the distinction between the four weeks of holiday that are derived from EU law and the additional 1.6 weeks of holiday that are granted by the WTR means that the issues created by the Supreme Court’s ruling in Chief Constable of the Police Service of Northern Ireland v Agnew (that the default position is that all holiday entitlement forms a composite pot) are still very much live. Moving forward, employers therefore need to assess their levels of risk and may need to refine their approach to calculating holiday pay and/or dealing with the order in which holiday is taken. Come to our workshop on 29 November to learn more.
Increased statutory pay rates
The various rates of the national minimum wage will increase from 1 April 2024, as follows:
- The National Living Wage (NLW) currently applies to workers aged 23 and over, but from April will be extended to include 21 and 22 year olds. It will increase from £10.42 to £11.44 per hour.
- The rate for workers aged 18 to 20 will increase to £8.60 per hour.
- The rate for young workers aged 16 to 17 will increase to £6.40 per hour.
- The apprentice rate will increase to £6.40 per hour.
The Real Living Wage and London Living Wage rates for 2023-24 were announced on the 24 October 2023. See here for further details. Living Wage Employers should implement the new rates as soon as possible (and by 1 May 2024 at the latest).
The Secretary of State for Work and Pensions has confirmed that state pension and benefit rates (which include the statutory maternity, paternity, adoption, shared parental and sick pay rates) will increase by 6.7% from 8 April 2024 (see here).
Likely developments in 2024
- Revocation of some retained EU law: The “Brexit Freedoms Bill” received Royal Assent in June, becoming the Retained EU Law (Revocation and Reform) Act 2023. This legislation was anticipated to have a huge impact on employment law in the UK, as the original intention was that the Act would automatically “sunset” all EU derived laws on 31 December 2023, except for those that the Government had decided expressly to retain. While the controversial “sunset” clause was removed during the parliamentary process, the Act does still have the potential to have a significant impact going forwards. For instance, with effect from 31 December 2023, the Act ends the principle of supremacy of EU law and removes all directly effective EU rights. In addition, the Act gives government ministers new powers to reform EU derived laws, and introduces a new reference process enabling a lower court – such as an employment tribunal – which is bound by EU case law to refer a point to the Court of Appeal or Supreme Court (which are not so bound) so they can decide if it should be overruled.
- Statutory Code of Practice on “fire and rehire”: The Government’s consultation on a draft Code of Practice on dismissal and re-engagement practices closed in April 2023 (see here). However no timeline has been given for the consideration of consultation responses or publication of the final Code.
- Non-compete clauses: The Government has confirmed its intention to limit the length of non-compete clauses in employment contracts to three months and will introduce legislation when parliamentary time allows.
General Election
The next General Election must take place by 28 January 2025, and we expect it to be held during 2024. If Labour win, the proposals in their “New Deal for Working People”, which they have committed to introducing via an Employment Rights Bill within their first 100 days of office, could have a significant impact on employers.
How we can help
2024 looks set to be a busy year from an employment law perspective. As ever, Make UK is here to help you navigate the compliance challenges thrown up by new legal developments.
We will provide updates on the ever-evolving HR and employment law agenda throughout the year. Dates for our popular Spring Employment Law Update will be released soon.
If you are a Make UK subscriber, you can speak to your regular adviser with any queries and to request further consultancy support. Subscribers can also access guidance on a wide range of employment law topics, including template policies and drafting guidance, in the HR & Legal Resources section of our website.
If you are not a Make UK subscriber, our expert HR and legal advisers can offer guidance on a consultancy basis. For further information, contact us on 0808 168 5874 or email [email protected].