What’s New in Employment Law in 2024?

The year ahead is set to be one of considerable change in the world of Employment Law. Much of the legislative change is being driven by post-Brexit reforms which are only now starting to come into effect.

In this article, we set out the key developments that all employers should be aware of. As ever, the devil will be in the detail and we will keep you updated on the changes as and when they come into force.

Our team of Employment Law experts are here to support you throughout this period of change. We can provide bespoke training on all of these issues for HR Professionals and Managers. If this is something your organisation may be interested in, please contact us for more information.

1. EU law

The Retained EU Law (Revocation and Reform) Act came into force on 1 January 2024. Practically, this means that the principle of EU supremacy in UK law has been revoked. Much of employment law and precedent in the UK has been derived from EU legislation and case law, so this is sure to have a big impact on UK employment law going forward and lead to a great deal of uncertainty.

That said, the legislation brought into force on 1 January 2024 does preserve the effects of some EU case law. Discrimination protections preserved include extended protection from pregnancy and maternity discrimination, the right to claim indirect discrimination by association, the ‘single source’ test for establishing an equal pay comparison, and a definition of disability that takes into account a person’s ability to participate in working life on an equal basis with other workers.

2. Holiday

The government have introduced a number of reforms in this area, which will apply to holiday leave years starting on or after 1 April 2024.

Irregular hours and Part-year workers –

• Rate of Accrual – The Government has introduced legislation which appears to address the difficulties caused by the Supreme Court decision in Harpur Trust v Brazel. As a result, holiday for irregular hours / part-year workers will be calculated in hours rather than weeks at the rate of 12.07% of hours worked in the relevant pay period. This will be a very significant change for organisations engaging workers of this nature.

• Rolled Up holiday – In addition, employers will be able to pay holiday pay on a rolled-up basis (i.e. paid on top of a worker’s normal hourly rate at the time they perform the work rather than when they are on holiday).

Carry over – The Government is introducing legislation to give effect to the current EU case law which allows workers to carry forward their entitlement to four weeks’ leave to the next holiday year where they have been prevented from using it due to sick leave (to be used within 18 months of the end of the holiday year in which the entitlement arose). In addition, if a worker cannot take their holiday entitlement due to family leave, they will be entitled to carry forward their whole 5.6 weeks’ entitlement to the next holiday year.

Covid carry over – The emergency legislation permitting workers to carry forward leave for up to two holiday years, where they were unable to take this leave because of Covid, ended on 1 January 2024. However, staff will have until 31 March 2024 to use any leave they have carried over under these rules.

Record requirements – The legislation also clarifies that employers will not be required to keep records of each employee’s daily working hours in order to comply with the record keeping requirements of the WTR.

3. Pay

Late last year, the government accepted the recommendations of the Low Pay Commission in full and announced increases to the NMW. The increases will be as follows:

• National Living Wage (NLW) (21 and over): £11.44 (9.8% increase).
• 18–20-year-old rate: £8.60 (14.8% increase).
• 16–17-year-old rate: £6.40 (21.2% increase).
• Apprentice rate: £6.40 (21.2% increase).
• Accommodation offset: £9.99 (9.8% increase).

These increases are due to apply from 1 April 2024.

A new law, the Employment (Allocation of Tips) Act 2023, will also be implemented in 2024 (exact date is yet to be confirmed). Under this legislation, employers will be banned from withholding tips from their staff and more than 2 million workers will have their tips protected.

4. Flexible Working

The Employment Relations (Flexible Working) Act 2023 will amend provisions on flexible working in the Employment Rights Act 1996 such that:

• The right to request flexible working will become a day-one right (previously, 26 weeks’ service was required).
• Employees will no longer have to explain the effect (if any) that their request may have on the employer and how that might be dealt with.
• Employees will be able to make up to 2 requests in any 12-month period (previously, this was limited to 1).
• Employers will have to respond to flexible working requests within 2 months (previously, employers had up to 3 months to respond).
• Employers will now have to consult with the employee on their request before it is rejected.

These provisions are due to come into force on 6 April 2024.

In addition, ACAS has produced a new Code of Practice, which sets out guidance for employers to bear in mind when dealing with flexible working requests. However, it is important to bear in mind that these changes are – in practice – relatively limited in effect. The right remains a right to request, not to have, a flexible working arrangement; the decision regarding whether to accept or decline a request remains at the employer’s discretion (subject of course to a fair process); and the 8 statutory reasons entitling an employer to reject a change remain unchanged.

5. Family Friendly Rights

Most of the upcoming changes to family friendly rights will come into effect from around April 2024, though the precise timeframes are yet to be confirmed. In the interim, employers should be reviewing applicable policies and procedures to consider whether and how these may need to be updated, and providing appropriate training to managers and HR Teams.

Changes to Paternity Leave – From March 2024

Those taking paternity leave will have increased flexibility around when that leave is taken.  Though the entitlement itself will remain at 2 weeks, these 2 weeks can be taken either in one block, or split into two, and can be taken within one year of birth or adoption (rather than the current 56-day time limit).

There will be no changes to the current statutory paternity pay scheme.

New Right to Carer’s Leave

The Carer’s Leave Act 2023 introduces a new day-one right for employees to take one week’s unpaid leave each year, in order to provide or arrange care for a dependant with a long-term care need.

There remain, however, a number of uncertainties in respect of this new right. For example, the processes for requesting and taking leave (and its interplay with other types of leave) remain unclear, as does the scope of the definition of “long-term care need”.

Further regulations are to be drafted “in due course”, setting out the relevant details and definitions, and bringing this right into force.  This is expected to take place sometime from April 2024. 

Enhanced Protection from Redundancy

Currently employees on maternity, adoption or shared parental leave are entitled to be offered a suitable alternative vacancy in priority to other colleagues in a redundancy situation. This right is being extended to employees who are pregnant and to those who have returned from maternity, adoption or shared parental leave for a period of time (likely to be 6 months).

This is a significant change as, for some, the enhanced protection may last for almost 2 years.

Further regulations are required to set out the relevant details and definitions and to bring these rights into force.  These are expected to be drafted before April 2024, though there is currently no timescale for implementation.

New Right to Neonatal Leave

The Neonatal Care (Leave and Pay) Act 2023 gives any employee whose baby requires specialist neonatal care following their birth, the right to statutory leave (likely up to 12 weeks) and potentially also statutory pay (if the employee has 26 weeks’ continuous service). 

This leave will be available to both parents, whose baby has to receive 7 days of uninterrupted medical or palliative care within 28 days of their birth.

Further regulations are required to set out the relevant details and definitions and to bring this right into force. The latter is not expected to take place until April 2025.

6. TUPE

The Government have extended the circumstances where employers can consult with employees directly for TUPE transfers taking place on or after 1 July 2024 if the employer is either:

• A small business with fewer than 50 employees; or
• Undertaking a small transfer of fewer than 10 employees.

This right exists provided there are no existing worker representatives

7. Right to request a predictable working pattern

The Workers (Predictable Terms and Conditions) Act 2023 will introduce a new right to request a predictable working pattern, such that:

• Workers who have a lack of predictability in relation to their working pattern (including those on fixed term contracts of under a year), and who have at least 26 weeks’ continuous employment, have the right to request a predictable working pattern.  Note that this does not equate to a right to be granted a predictable working pattern.
• Employers must deal with any such requests in a reasonable manner, and can only reject them on one or more of 7 specified statutory grounds (similar to those for flexible working).
• Employees can make a maximum of 2 requests in any 12-month period.
• If granting the request, a new contract must be granted within two weeks.

If an employer breaches these provisions, the worker may bring a claim for declaration from the Tribunal, compensation, unlawful detriment and/or automatic unfair dismissal (as applicable).  There may also be discrimination issues arising.

These provisions are expected to come into force around September 2024.

ACAS is currently in the process of drafting a Code of Practice for dealing with requests for a predictable working pattern.

8. Sexual Harassment

With effect from 26 October 2024, the Worker Protection Act 2023 will place all employers under an additional duty to take reasonable steps to prevent sexual harassment of their employees. To comply with this duty in practice, employers will need to start by conducting a risk analysis of sexual harassment in their workplace, outline actions to mitigate or eliminate risks, develop robust reporting, investigation and response processes and monitor and implement improvements.

Ahead of the new legislation coming into force, the Equality and Human Rights Commission will publish a statutory Code of Practice on proactive steps employers are expected to take to comply with this new duty.

Employers should keep a very close eye on this as the statutory Code will set the expectation of them going forward and is likely to be a very significant development in this area.

9. Restrictive Covenants

The Government has announced that it intends to limit the duration of restrictive covenants in employment contracts to three months. This may lead to a greater use of other restrictions to prevent competition (for example, use of longer notice periods and garden leave clauses). It remains unclear how the legislation will affect existing non-competes that are longer than three months. No timeframe for implementation has yet to be set out, and it is unclear if the proposed changes will be implemented before the next General Election.

10. Impact of a General Election

It is widely anticipated that a General Election will take place in the UK this Autumn if not before (it will need to happen by no later than 28 January 2025). With the Labour Party leading in the polls, it’s worth being reminded of some of the main employment-related policy changes they propose to introduce:

• A day one unfair dismissal right;
• Banning zero hours contracts and outlawing fire and rehire;
• Establishing Fair Pay Agreements across the economy;
• Strengthening trade union legislation;
• Acting to close gender, ethnicity and disability pay gaps;
• Bringing in the ‘right to switch off’ and work autonomously;
• Bringing about stronger family-friendly rights; and
• Giving those with caring responsibilities greater protections.