Following years of very few legislative changes in employment law, 2024 is set to buck that trend with a wave of incoming legislation, which will impact a number of sectors, including hotels and hospitality. Some changes are a consequence of Brexit, as the Government is reversing some impacts of EU case law on UK employment legislation. A new government (if the polls are to be believed) may also lead to further change – so watch this space!
We have whittled down the known upcoming changes to those we think are most important.
Holiday entitlement and pay
The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 came into force on 1 January 2024, and apply to holiday years beginning on or after 1 April 2024.
Calculation of holiday pay for part-year workers and irregular hours workers
The Regulations make notable changes in relation to how employers should calculate holiday entitlement for part-year workers and workers with irregular hours.
- Part-year workers are workers who only work for part of the year and there are periods of at least a week in which they are not required to work and are unpaid.
- Irregular hours workers are workers who have wholly or mostly variable working hours, i.e. those with a non-repeating working pattern such as casual workers.
Under the Regulations, these workers will accrue annual leave entitlement on the last day of each pay period at the rate of 12.07% of the number of hours that they have worked during that pay period.
Employers will also have the option to introduce “rolled up” holiday pay for workers who fall within the definition of part-year workers and irregular hours workers. This means that instead of making a payment at the time the holiday is taken, employers can make an additional payment for holiday entitlement along with the employee’s basic pay, calculated as 12.07% of a worker’s pay in that pay period.
This is a practice that many employers with irregular hours workers have adopted for years, despite it being ruled unlawful by the Courts because it potentially deterred workers from taking time off. The changes in the Regulations reverse the case law and employers will be pleased to know that they are able to lawfully use rolled up holiday pay for these workers.
To ensure compliance with the incoming Regulations, employers may find the government guidance helpful to read in advance of the changes and should identify all workers who fall within these categories.
Carry-forward of holiday
The Regulations also codify certain EU case law by writing into the Working Time Regulations 1998 certain statutory rights which permit workers to carry over annual leave. In summary, holiday entitlement can be carried over in the following circumstances:
- Up to 28 days – if a worker is unable to take their statutory holiday entitlement because they are on statutory leave (e.g. family related leave).
- Up to 20 days – if a worker has been unable to take their statutory holiday entitlement due to sickness.
- Up to 20 days – if an employer has failed to: (a) pay a worker their paid leave entitlement; (b) give the worker a reasonable opportunity to take their leave and encourage them to do so; or (c) inform the worker that untaken leave must be used before the end of the leave year to prevent it from being lost.
Note that the number of days’ holiday above are based on someone working a five-day week and for irregular hours and part-year workers, these carry-over rights apply to all their statutory holiday entitlement.
Enhanced redundancy protection for women in connection with pregnancy, childbirth, or maternity
Currently employees on maternity leave, shared parental leave, or adoption leave have the right to be offered suitable alternative vacancies in a redundancy situation, in preference to other colleagues (“enhanced redundancy protection”).
The draft Maternity Leave, Adoption Leave and Shared Parental Leave (Amendment) Regulations 2024 were laid before parliament on 11 December 2023 and are set to come into force on 6 April 2024. These aim to enhance redundancy protection for pregnant workers and working parents returning to work after family-related leave.
If passed, they will extend the period in which this enhanced redundancy protection is available, as follows:
- Pregnancy/maternity leave: The enhanced redundancy protection will start when the employee notifies their employer of their pregnancy and will end 18 months after the child’s date of birth (or, if the employee has not told the employer the date of birth, it will end 18 months after the first day of the expected week of childbirth).
- Adoption leave: The enhanced redundancy protection will end 18 months after the child's placement or, in overseas adoptions, the date they enter Great Britain.
- Shared Parental Leave (SPL): The enhanced redundancy protection will end 18 months after birth, provided that the parent has taken a period of at least six consecutive weeks of SPL. This protection will not apply if the employee has taken maternity or adoption leave.
Businesses restructuring in 2024 must ensure that the wider categories of employees who will soon benefit from additional redundancy protection are considered in the early stages of the planning process. In particular, internal systems should be in place which allow information about employees on family-leave-related absences to be communicated to the relevant decision makers in any redundancy situation to ensure their enhanced redundancy protection is taken into consideration.
Relaxation of Transfer of Undertakings Protection of Employment (TUPE) consultation rules
When managing a TUPE transfer, currently micro businesses – those with fewer than ten employees – may inform and consult affected employees directly if there are no existing appropriate representatives in place (e.g. if there is no recognised trade union).
However, larger businesses are required to arrange elections for affected employees to elect new employee representatives, if they are not already in place, which can add complexity to the process.
The Government has confirmed it will proceed with its proposal to remove the requirement to elect employee representatives for:
- employers with fewer than 50 employees; and
- employers of any size involved in a transfer of fewer than ten employees.
In either case, the employer will be able to consult directly with employees where no existing employee representatives are in place. Where employee representatives – including trade unions – are in place, employers will still be required to inform and consult them.
This relaxation of the information and consultation rules will apply to any TUPE transfers taking place on or after 1 July 2024.
Employer’s duty to take reasonable steps to prevent sexual harassment of employees
The Worker Protection (Amendment of Equality Act 2010) Act 2023 modifies the 2010 Act to introduce a new duty on employers to take reasonable steps to prevent sexual harassment of their employees.
The duty under the Act has been diluted compared to the original Bill which initially required employers to take all reasonable steps to prevent sexual harassment. During the Bill’s passage through parliament, the word “all” was dropped.
Despite this, employers must not ignore the new duty as it requires them to act proactively and preventatively. Currently, taking reasonable steps is advisable and provides employers with a possible defence in an employee harassment claim but there is no positive obligation on employers to do so.
What would be considered reasonable steps will vary depending on the nature and size of an organisation, but it will often involve implementing and regularly reviewing relevant equality policies, providing regular training to staff, and dealing properly with complaints. The Act does not contain a definition of what “reasonable steps” are. However, the Equality and Human Rights Commission will be publishing a statutory code of practice which is likely to contain guidance on this.
Significantly, if a sexual harassment claim is upheld, the Act will give tribunals the power to increase the compensation awarded by up to 25% where it is held that an employer has breached this new duty.
In advance of the Act taking effect on 26 October 2024, employers should review their anti-harassment policies, update their anti-harassment training, and ensure that line managers are aware of this change.
Right to request flexible working to become a “day one” right
The Flexible Working (Amendment) Regulations 2023 will come into force on 6 April 2024. This will remove the requirement for an employee to have been continuously employed for a period of at least 26 weeks to be entitled to make a flexible working request, thus making the right to request a “day one” right.
Separate legislation (the Employment Relations (Flexible Working) Act 2023) received Royal Assent on 20 July 2023 and will also come into force on 6 April 2024. It makes provision for employees to be entitled to make two flexible working requests (previously only one allowed) in any 12-month period and employers will have to respond to a request within two months (as opposed to the current limit of three months).
The Advisory, Conciliation and Arbitration Service (Acas) published a draft Code of Practice on requests for flexible working, together with an explanatory memorandum, that has been presented for parliamentary approval.
In preparation for these changes, employers should review the draft Code of Practice and their policies, and ensure managers are trained in handling flexible working requests.
New statutory right for workers to request a predictable working pattern
The new Workers (Predictable Terms and Conditions) Act 2023 is expected to come into force around September 2024. This Act amends the Employment Rights Act 1996 to give employees, workers, and agency workers with unpredictable working patterns the right to request a more predictable pattern.
In many ways, the rules around this right will follow a similar approach to the regime on flexible working requests, e.g. employers must deal with applications in a reasonable manner and can only refuse for one of eight statutory reasons. However, the right to request a predictable working pattern is likely to require 26 weeks’ qualifying service, unlike flexible working requests which are shortly to become a “day one” right as mentioned above.
Anyone engaged on a fixed-term contract for less than 12 months will be treated as having an unpredictable working pattern and so will automatically fall within the scope of the persons able to use this new right.
The changes are expected to come into force towards the end of 2024. In preparation, employers may want to read Acas’ draft Code of Practice, which contains a suggested procedure for dealing with such requests. This follows a similar approach to the process for handling a flexible working request, which employers will be familiar with.
New law on the allocation of tips
The Employment (Allocation of Tips) Act 2023 comes fully into force on 1 July 2024 and regulates how employers are required to allocate tips, gratuities, and service charges among workers. The new rules include, at a high level, a requirement for businesses to:
- allocate tips in a fair and transparent manner;
- distribute tips to staff within one month of the end of the month in which the customer paid the tip; and
- have a written policy on the allocation of tips and maintain records of the distribution.
A draft statutory Code of Practice has been published for consultation and it is expected that the final version will be issued in Spring 2024 ahead of the new rules coming into effect.
New statutory right to carer’s leave
The draft Carer's Leave Regulations 2024 have been laid before Parliament and will come into force on 6 April 2024. Under the Regulations, a carer is defined as someone who has a dependant with a long-term care need. The Regulations will introduce the right to one-week unpaid carer's leave for employees (who fall within this definition) every 12 months. The leave must be taken to either provide or arrange care for that dependent.
Employees can choose whether to take the leave in separate blocks (the minimum period being half a working day) or in a single one-week block. The Regulations set out the notice requirements an employee is required to give, and the limited circumstances in which an employer is permitted to postpone a request.
Employers should consider:
- Updating or drafting new policies to inform employees of this new right.
- Creating a “self-certification” form for employees to complete.
- Ensuring a record is kept of leave taken.
- Informing managers of the new right (and that dismissing any employee for taking this leave will automatically be unfair).
Upcoming general election
The upcoming general election could bring in a change of government and potentially significant changes to employment law. The Labour Party has promised an array of reforms they plan to introduce if elected. These include:
- a ban on zero-hour contracts;
- ending “fire and re-hire” practices;
- improvements to statutory sick pay;
- enhanced day one employment rights, including making the right not to be unfairly dismissed a “day one” right;
- extending unfair dismissal protection to all “workers”, removing the limits on unfair dismissal compensation and extending the time limits to bring an unfair dismissal claim; and
- ensuring the National Minimum Wage will take into account the cost of living.
If you have any questions or would like to discuss how these changes might impact on your business, please get in contact with a member of the employment team.
This article was co-authored by Trainee Isabella Linton.