Employment law: what to expect in 2024

A combination of Brexit and Covid has meant that over the last few years, there haven’t been many significant developments in the employment sphere. However, this is likely to change in 2024.

As we ring in the new year, we have rounded up 10 key developments (ok, eleven as we couldn’t let a Supreme Court case not make the post!) that are likely to shake up the employment law landscape in 2024 and beyond. We will be running an employment webinar in February 2024 to guide employers through the details of the changes. Information on how to sign up will be available shortly.

1. Retained EU Law

The Retained EU Law (Revocation and Reform) Bill originally paved the way for all retained EU law to be revoked automatically at the end of 2023 unless it was expressly transferred into UK law. This had potentially significant implications for areas such as working time, TUPE and agency work. However, in June 2023, the Government reversed its position and confirmed that only those laws expressly identified by the Government at the end of 2023 would be revoked. In the short term, this means all EU derived employment law will remain in place (subject to the reforms mentioned below).

What is changing, however, is that the Act revokes the principle of EU supremacy in UK law from 1 January 2024 and creates uncertainty over the status of EU case law and the way EU-derived law will be interpreted by UK courts. The ramifications of this change may not be known for quite a while, but it may lead to previously established points of law being challenged in the courts, leading to ambiguity for employers as to their legal obligations.

2. Holiday

In November 2023, the Government announced a number of reforms to employment law, with a particular impact on annual leave under the Working Time Regulations. All the holiday reforms will apply to holiday leave years starting on or after 1 April 2024. You can read more about the changes to holiday in our blog Government to reverse Harpur Trust ruling, and other employment reforms (farrer.co.uk). In summary:

Rolled up holiday:

Rolled up holiday is the practice of including an amount for holiday pay on top of a worker’s normal hourly rate, paid at the time they perform the work, rather than when they are on holiday. The practice has been unlawful since 2006, due to concerns it could disincentivise workers from taking leave, however many employers have continued with the practice on the basis that it was the most practical way of dealing with holiday pay for atypical workers.

For holiday years starting on or after 1 April 2024, the Government will re-introduce rolled up holiday pay for irregular hours workers (such as those on zero-hours contracts) and part year workers. This means that employers will be able to lawfully use rolled up holiday pay without exposure to claims for unpaid holiday. This option will be particularly attractive when engaging new people on irregular hours contracts.

Calculating holiday entitlement for part-year and irregular hour workers:

The Government has also reversed the Supreme Court decision in Harpur Trust v Brazel by introducing a pro-rata method of calculating annual leave entitlement for irregular hour workers and part-year workers, calculated at 12.07 per cent of hours worked in a pay period. This change will be significant to organisations who engage part-year or irregular hours workers, particularly if they made changes to their holiday entitlement following the Supreme Court decision.

Carry over of annual leave entitlement:

The Government is legislating to give effect to current EU case law which permits workers to carry over annual leave entitlement if they can’t take it due to family leave or sick leave (in the latter case, leave must be used within 18 months). In addition, there will be a right to carry over annual leave if an employer fails to encourage workers to take annual leave or doesn’t give them a reasonable opportunity to take it. This will place a positive duty on employers to ensure workers are given the chance to take holiday. 

New Government guidance

The Government has published new guidance on Holiday pay and entitlement reforms from 1 January 2024, which focuses on part-year and irregular hours workers. The guidance covers the definition of irregular and part-year workers, with examples of both, along with a number of illustrative pay calculations, including in respect of holiday accrual and carry over entitlement. 

3. TUPE consultation 

Currently, on a TUPE transfer employers must consult with representatives from a trade union or, if there is none, other employee representatives. Employers can only inform and consult directly with employees if they have fewer than 10 employees.

For TUPE transfers taking place on or after 1 July 2024, if there are no existing worker representatives, consultation can take place directly with employees if the employer is:

• A small business (with fewer than 50 employees), or
• A business of any size undertaking a small transfer (of fewer than 10 employees)
  
  

4. Worker protections 

The Worker Protection (Amendment of Equality Act 2010) Act 2023 will come into force in October 2024 and will include a duty on employers to take “reasonable steps” to prevent sexual harassment of employees in the course of their employment. Whilst this is watered down from the original proposal for employers to “take all reasonable steps”, the duty to protect employees from sexual harassment is a significant one for employers and it is important that it is taken seriously. 

Simply having anti-harassment policies and routine training will not be enough, and organisations will need implement clear policies for raising and dealing with concerns, setting the tone from the top and fostering a zero-tolerance culture.

Employer liability for third party harassment is not being brought in at this stage.

For more information, see our Employment law update from last year.

5. Flexible working

The Employment Relations (Flexible Working) Act 2023 will come into force on 6 April 2024 and will make the following changes:

• Employees will be able to make two requests for flexible working in any 12-month period instead of one.
• Employers will have two months to respond and must consult with employees before coming to a decision. (This will be the main thing organisations will need to think about).
• Employees will no longer have to explain the impact of their request. The responsibility to consider the impact will fall on the employer.
  
  

Employers will still, however, be able to refuse a flexible working request for one of six statutory grounds.

The right to request flexible working from day one (currently you need 26-weeks service) was not originally included in the Flexible Working Act. However, secondary legislation has now passed (the Flexible Working Amendment Regulations 2023) which will give employees the right to make a flexible working application when they begin employment (making it a day one right). From 6 April 2024, employees will not need any period of service in order to make a flexible working request.

You can read more about the changes in our update on flexible working.

6. Family-friendly protection from redundancy

Currently parents on maternity, adoption or shared parental leave are entitled to be offered a suitable alternative vacancy (if any) in preference to other employees at risk of redundancy. The Protection from Redundancy (Pregnancy and Family Leave) Act 2023 will extend this protection to:

• Pregnant employees: from the time they inform their employer of their pregnancy. This protection will apply to pregnant women who inform their employer on or after 6 April 2024.
• Those on family leave: (in the case of maternity leave) for 18 months from the expected week of childbirth or, if an employer is notified, the day on which childbirth occurs, or (in the case of other leave) the date of birth or the date of placement. This will apply to maternity or adoption leave ending on or after 6 April 2024, or shared parental leave starting on or after 6 April 2024, provided the parent takes a period of at least six weeks shared parental leave.
  
  

Organisations who are planning any redundancy exercises after April should take note of this change to ensure suitable alternative vacancies are identified and offered to the extended category of employees who are protected.

7. Predictable hours 

The Workers (Predictable Terms and Conditions) Act 2023, expected to come into force around September 2024, introduces a new statutory right for workers to request a more predictable working pattern.

Any workers who have unpredictable work patterns will have the right to request predictability relating to their working hours, working days and times, and the length of their contract. Employers have a month to respond and must deal with a request reasonably.

This development is likely to be most relevant to industries that rely on more casual work and where shift patterns vary as rotas change. However, given the wide-ranging wording in the Act, other contracts could be caught, such as fixed term contracts under 12 months.

For more information on this reform, see our article from last year.

8. Carer's Leave 

The Carer's Leave Regulations 2024 are due to come into force on 6 April 2024. The Regulations confirm the key features of the statutory scheme:

• Employees can apply for up to one week of unpaid carer’s leave in any rolling 12-month period. This will be a day one right, meaning there will be no minimum service requirement to qualify for the right.
• To qualify for the right to take leave, employees must have a dependent with a long-term care need and be taking leave to provide or arrange care for that dependent.
• Leave may be taken in fully days or half days up to a block of one week and may be consecutive or non-consecutive.
• Employees must give notice of their wish to take leave. Employers cannot require evidence in relation to the request, nor can they decline a request, though they may postpone it in certain circumstances.
• Employees will be protected from detriment or dismissal because they take or seek to take carer’s leave.
  
  

9. Reform of non-competes 

In May 2023, the government announced its intention to limit the length of non-compete clauses to a maximum of three months. Nothing further has been announced since then except that the Government intends to legislate “when parliamentary time allows”. It is uncertain how the changes will affect existing non-competes. For now, and until the Government enacts legislation, the position on enforceability remains unchanged where an employer wishes to rely on an existing non-compete, though employees may use the announcement as a negotiating tool if asked to sign up to a long non-compete.

See our article, a global shift away from non-competes? Major changes proposed, which discusses the future of non-competes.

10. Government reviews: whistleblowing and fire and rehire 

Last year the Government launched a review of two employment practices. We are yet to hear anything further on these, but more may be revealed in 2024:

• Whistleblowing: The UK’s current whistleblowing framework, introduced nearly 25 years ago, has been increasingly criticised as outdated and complex. In 2023, the Government launched a review of the whistleblowing regime, with the aim of examining its effectiveness in providing workers with a route to raise concerns, and ensuring they are protected if they do so. The UK risks falling behind internationally in the protection it currently offers to whistleblowers. It is possible that 2024 could finally see an overhaul of whistleblowing. For a more detailed discussion, see our article on the Government review of the whistleblowing framework.
• Fire and rehire: The practice of fire and rehire (also known as dismissal and re-engagement) has been under scrutiny recently because of the risk of unscrupulous employers exploiting vulnerable workers. In 2023, the Government consulted on a draft statutory Code of Practice on fire and rehire. We’ve not heard anything further since but expect it to be something which re-emerges in 2024. You can read more about the draft code and possible next steps in our article Government consultation on Draft Code of Practice on Dismissal and Re-engagement.
  
  

11. Trade union detriment 

A final bonus entry: last year ended with the Supreme Court hearing the case of SoS for Business and Trade v Mercer, a significant case examining whether striking trade union members are protected from detriment. Currently, the law only protects employees from unfair dismissal for participating in industrial action. There is no protection where an employer subjects a striking employee to a detriment that doesn’t amount to a dismissal.

The Supreme Court’s decision in this case is expected in Spring / Summer 2024. Whichever way it decides, it could have important and long-lasting implications for workers’ rights to strike.

With many thanks to trainee Toby Stacey for their help in writing this blog.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, January 2024