What’s happening in UK employment law in 2024?
Bellevue Law
We advise on employment law and helping clients resolve legal disputes through litigation, arbitration and mediation.
Welcome to 2024’s first edition of our Perspectives newsletter. In this edition, we’re sharing some of the upcoming changes to UK employment law that employers need to know about.? Below, you will find a summary of five key amendments to have on your radar so you can prepare in good time.? Please get in touch if you’d like our advice or support in making any changes.
1. New legislation on holiday pay
The Employment Rights Regulations 2023 allow rolled-up holiday pay for irregular hours and part-year workers from 1 April 2024 onwards (amongst other changes).
While the Regulations are now in force, these provisions apply to holiday years starting from 1 April 2024, so their implementation for an individual employer depends on when its holiday year starts. For example, if a business operates a calendar holiday year, the new rules won’t apply to them until 1 January 2025.
Irregular hours workers, such as casual workers, have wholly or mostly variable hours, while part-year workers contractually have periods of at least one week a year where they do not work and are not paid, and include some term-time workers.??
Under the new system, these workers can accrue holiday entitlement at the end of each pay period, and be paid holiday pay on a rolled-up basis (i.e. by way of a supplement to basic pay) if the employer so chooses.??
In these cases, holiday pay will be calculated at 12.07% of all pay for work done, and must be paid at the same time as pay for work done and itemised separately on the payslip.? The figure of 12.07% is calculated by expressing the statutory minimum annual holiday entitlement of 5.6 weeks as a percentage of the remaining 46.4 working weeks in a year.??
This approach will not be mandatory, but is likely to provide a welcome clarification and simplification for employers struggling with how to calculate holiday entitlement and pay for workers whose hours are irregular or occasional.? For employers who choose to pay holiday pay when annual leave is taken instead, this will be calculated at the rate of a week’s pay (calculated using a 52-week reference period) for each week’s holiday.
Rules about carrying forward holiday:
The Regulations also provide that workers can carry forward up to four weeks of untaken annual leave at the end of a holiday year if: they’ve been unable to take it due to sickness absence, weren’t given a reasonable opportunity to take leave or encouraged to do so, weren’t informed that they would lose their entitlement if they didn’t take it or not given leave as they were wrongly treated as self-employed.
Workers who carry forward holiday they were unable to take due to sickness must use it within 18 months from the holiday year in which it accrued.? Those prevented from taking annual leave due to family leave may carry forward their full 5.6 weeks’ entitlement, which must be used by the end of the following leave year.
While these provisions codify existing EU and UK law, many employers’ policies don’t fully reflect them.? Employers should therefore take the opportunity to review and update policies and practices to ensure compliance.
In particular, employers should ensure they are clear about who should be treated as an employee or worker and provided with paid annual leave.?
You can read more about the new legislation on Holiday Entitlement and Pay on the Government website here.
If you would like support in understanding and implementing these provisions, please get in touch.
2. Flexible working reforms
The Employment Relations (Flexible Working) Act 2023 is coming into force on 6 April 2024.
The Act provides that employees can make a flexible working request from day one of their employment, rather than after 26 weeks, as currently.? They will also be able to make up to two requests in a 12-month period, and will no longer be required to explain the effect of the request on the employer and how that might be addressed.??
Employers will be required to consult with employees about their requests (although the Act does not specify the nature of this consultation) and to respond to requests sooner - within two months, rather than three.
With many employers looking to encourage a return to greater office attendance, we expect to see an increase in flexible working requests, and employers should ensure they have updated policies and practices ready before the new law comes into force.? Ultimately, however, employers retain a wide degree of latitude in deciding whether to accept or decline a flexible working request.
3. Carer’s leave
The Carer’s Leave Act 2023 also comes into force on 6 April 2024.? This legislation creates a new statutory right, from day one of employment, to a week’s unpaid leave annually to care for a dependant with long-term needs.?
Almost every organisation will have some employees with caring responsibilities, including many who may not have previously disclosed that they are carers.? Dependants include spouses, civil partners, those who live in the same household as an employee (except as employees, tenants, lodgers and boarders), children, parents and anyone else who reasonably relies on the employee for care.??
And long-term needs include not only conditions that meet the definition of disability under the Equality Act 2010, but also physical and mental illnesses and injuries that require (or are likely to require) care for more than three months, and old age.
To prepare for the new provision, employers will need to think about updating or creating new policies, introducing a system of record-keeping to track the number of days taken, and training people managers on this new right.
4. Redundancy protection to be extended to cover pregnancy and return from family leave
The Protection from Redundancy (Pregnancy and Family Leave) Act 2023 is coming into force on 6 April 2024, providing enhanced protection for employees who are pregnant or returning from maternity, adoption or shared parental leave in a redundancy situation.?
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The changes will materially increase the numbers of employees with protection - for example, fathers taking just 6 weeks’ of shared parental leave will be protected for 18 months from the date of their child’s birth.
Currently, employees on maternity, adoption or shared parental leave have enhanced protections in redundancy situations, including the right to be offered a suitable alternative vacancy over other employees at risk, if one is available.
The Act expands this protection to include pregnant employees, from the moment they notify their employer of their pregnancy, and extends the period of protection for eligible employees to 18 months after the child’s birth (or placement).
What challenges does the Act pose for employers?
Significant potential claims may arise if employers considering restructurings do not take into account the implications of the new protections.? At a practical level, these include a potentially much wider pool of people who have the right to be offered suitable alternative vacancies, and uncertainty about how to allocate these if there are fewer vacancies than employees entitled to them.
5. Minor changes to paternity leave
Also coming into force on 6 April 2024 are minor amendments to Statutory Paternity Leave.
The two weeks of paternity leave can now be taken in non-consecutive blocks of one week, and within 52 weeks of birth (or placement) rather than the current 56 days.? And instead of having to give notice of leave dates 15 weeks before the birth, employees will need to provide notice of entitlement at this point but only 28 days’ notice of the leave itself, and must declare their eligibility for the leave and its legitimate purpose.
What’s new from May 2024 onwards
In addition to the five legislative changes outlined above, you should also be aware of the following employment law changes coming into effect later this year:
There is, however, no timeframe for implementation of plans announced by the government in 2023 to cap post-employment non-compete clauses at three months, so it is now unclear if this will go ahead during this Parliament.
The impact of a general election in 2024
As you are doubtless aware, at some point this year we expect to see a general election. While the outcome of this is by no means a foregone conclusion, polling consistently suggests that we may see a change in government, with the Labour Party coming into power.
It is therefore as well to be aware of some of the Labour Party’s wide-ranging proposals in the realm of employment law, which include:
Much can change between now and the general election, we will see more detail in the Labour Party’s manifesto and implementation following an election victory would not be immediate.? But the indications are that, if elected, Labour would implement very significant changes to employment laws and employers should start having these on their horizons now.
We hope you have found this edition useful. If you want to find out more, or need assistance with any aspect of employment law, either as an employer or employee, please do not hesitate to get in touch with us at [email protected].