Changes in employment law in 2024

January 29, 2024
Jo Tindall


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A significant number changes to employment law will come into force in 2024, some of which are more impactful than others. Here are out “Top 6” changes for employers to be aware of. 

Changes to Holidays and Holiday Pay  – January 2024

Amendments to the Working Time Regulations (WTR) came into effect in January, and the main points are summarised below.

Irregular hours and part-year workers

There are new rules for workers with irregular working hours and to part-year workers (as defined in the new regulations) in relation to leave years starting on or after 1 April 2024. Broadly, these are that:

  • the entitlement to 5.6 weeks’ annual leave under the Working Time Regulations (WTR) will no longer apply;
  • Workers will instead accrue holiday in hours, based on 12.07% of the hours worked in the pay period (to be calculated at the end of the pay period);
  • There will be alternative systems for payment for holiday hours. Either:
    • Workers may be paid for holiday hours when they are taken as holiday (with holiday pay being based on average pay over the previous 52 working weeks); or 
    • Rolled-up holiday pay may be paid, i.e. an additional payment is incorporated into a worker’s pay, based on 12.07% of pay.

These changes will reverse the outcome of the Supreme Court’s judgment in Brazel v Harper Trust which resulted in some part-year workers and irregular hours workers having a greater entitlement to holiday pay (as a proportion of their annual earnings) than workers with normal working hours over a full year.

Calculation of holiday pay for employees with normal working hours

The changes to the WTR also now expressly provide that the calculation of the Working Time Directive (WTD) element of holiday pay (4 weeks) must include in addition to basic pay:

  • Payments which are intrinsically linked to the performance of tasks which a worker is obliged under their contract to carry out, including commission;
  • Payments for professional or personal status relating to length of service, seniority or professional qualifications; and
  • Other payments which have been regularly paid to a worker.  This would include voluntary overtime if it is paid over a sufficient period of time and with regularity.

For workers with normal working hours, this calculation will involve working averaging the additional payments over the previous 52 weeks and factoring this into holiday pay for the period of leave taken. 

What this means for employers

It should be noted that the changes for irregular hours and part-year workers only apply to holiday years which commence on or after 1 April 2024, so there could be a significant lead into implementation for those employers with a January to December holiday year. 

In any case, employers will need to audit existing pay arrangements and take steps change their systems to reflect the changes to the law.

Introduction of the Statutory Code of Practice on Dismissal and Re-engagement – Spring 2024

In Spring 2024, the final version of the Code of Practice on Dismissal and Re-engagement will come into force (Code of Practice).

A draft Code was published last year, in the wake of the fallout from the P&O ferries mass redundancies exercise. The aim of the Code is to set out steps that employers must take to ensure there is meaningful and good faith consultation on proposed changes to employment terms. 

The final version of the Code will have a statutory footing, in that any breach of it could result in an uplift in compensation of up to 25% if an employee brings a successful tribunal claim for unfair dismissal.

Whilst we are yet to see the final version of the Code, the draft version sets out a step-by-step process when making contract changes which would entail:

  • Communicating the desire to make the changes;
  • Where an employee does not agree, consulting and negotiating ‘for as long as possible’ in good faith and to try to reach a solution;
  • Reassessing the business reasons if changes cannot be agreed; and
  • Ensuring that consultation is meaningful with dismissal only being used as a last resort.

It remains to be seen whether the final version of the Code will contain these requirements, but it is worth noting that the Code will apply on top of existing collective consultation obligations (which apply to termination and re-engagement exercises which affect 20 or more employees in a period of 90 days or so).

What this means for employers

Whilst it is arguable that many of the steps in the Code are already relevant to effecting fair dismissals, employers should consider:

  • The Code requirements when making contract changes; and
  • Reviewing existing contract terms with a view to building in additional flexibility to make changes.

Changes to the right to request flexible working – April 2024

The Employment Relations (Flexible Working) Act 2023 makes changes to the right to request flexible working which come into force in April this year.

The changes to the law will:

  • Extend the statutory right to request flexible working to all employees from day one of employment. 
  • Allow employees to make two requests a year (instead of the current one request per year).
  • Reduce the time allowed for an employer to respond to a request for flexible working from three months to two.
  • Remove the requirement for the employee to set out how their employer can deal with effects of the change in working pattern.

Penalties for non-compliance remain the same.  A tribunal can order reconsideration of the request and/or make an award of compensation of up to eight weeks’ pay. A new ACAS Code of Practice on handling requests for flexible working has been published.

What this means for employers

Although the ability still exists for employers to refuse requests where there is a business reason, the changes will make it easier for employees to make flexible working requests. Employers should consider:

  • Reviewing and amending flexible working policies in anticipation of the changes
  • Ensuring line managers are aware of the managers and are trained to deal with requests.
  • Considering role profiles when recruiting for roles and the rationale for a particular working pattern

Extended protection relating to pregnancy and family leave – April 2024

As the law currently stands, employees affected by redundancy during family leave are entitled to be offered a suitable alternative vacancy (where one is available).Draft regulations have been published which provide for extension of the above right to cover:

  • Women from the date they tell their employer they are pregnant and for a period of eighteen months from the birth;
  • Women who miscarry for up to two weeks after the miscarriage;
  • New parents taking shared parental leave for more than 6 weeks or adoption leave for up to 18 months from the placement / birth.

The extended protection applies where an employer is informed of the pregnancy on or after 6 April 2024 and to maternity / adoption leave ending on or after 6 April 2024.  

What this means for employers

It will be important that those with responsibility for people management are aware of these extended rights in the context of any redundancy or restructuring programme which may affect those who are:

  • taking family leave;
  • pregnant workers;
  • have returned to work having taken family leave in the previous 18 months.

Introduction of the duty to prevent sexual harassment – October 2024

The Worker Protection (Amendment of Equality Act 2010) Act 2023 (Act) received Royal Assent last year and introduces a legal duty on employers to take “reasonable steps” to prevent sexual harassment of employees.

If sexual harassment is found to have taken place, the new law would provide for a compensation uplift (of up to 25% of the amount awarded).

The Equality and Human Rights Commission (EHRC) has confirmed that it intends to update its existing guidance and its statutory Code of Practice (Code) to reflect the changes. The amendments to both the guidance and the Code will be subject to full consultation, although there is no timescale for this at present.

What this means for employers

This change will keep the implementation of effective EDI and anti-harassment and bullying policies high on the agenda for many employers.

Auditing policies and procedures, educating and training staff, encouraging ‘speaking up’ and putting in place effective systems for dealing with issues will be essential for 2024.

Changes to Non-Compete clauses – Autumn 2024

Legislation is expected in Autumn 2024 in which a limit to non-compete clauses will be put in place such that they can only apply for three months post termination.  Employers will still be able to use confidentiality clauses, other post termination restrictions and garden leave.

It’s not yet clear whether the changes will apply to existing arrangements that exceed three months or whether existing arrangements will become ‘void’. It is also unclear if the changes will apply to non-compete clauses in other documents, e.g. settlement agreements or commercial agreements. 

What this means for employers

Depending on the impact on existing non-compete clauses, employers may need to amend their contracts, so they are compliant with the new laws. Consideration may also need to be given to introducing longer notice periods or using garden leave more frequently. 

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