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Looking Ahead 2024: UK

A general election in 2024 could mean some significant, but as yet, uncertain changes for workplace law in the UK. In the meantime, the current UK government has belatedly been working hard to bring into effect a number of reforms, many of which began life well before the pandemic.

In this article we identify 8 key announcements that HR and in house counsel should look out for in 2024, and we make 4 key people predictions which organisations might focus on in 2024 to manage legal risk. In the remainder, we set out some key dates for your diary and, if you need further detail, we list per topic what reforms you can expect to see in 2024 and beyond, finishing off with a summary of the Labour party’s proposals as announced at their last conference in October 2023.

Being forewarned is forearmed!

8 key announcements to look out for in 2024

  1. Final revised Acas Code on flexible working
  2. EHRC’s updated technical guidance on sexual harassment and harassment at work
  3. Draft Neonatal Leave and Pay regulations
  4. FCA and PRA Policy Statements covering their proposals to boost D&I and clarify the definition of non-financial misconduct in the financial sector
  5. Final Statutory Code on “Fire and rehire” practices
  6. Government response to its consultation on AI, and the TUC’s “AI and Employment Bill”
  7. Final Data Protection and Digital Information Bill and associated guidance from the Information Commissioner’s Office (ICO)
  8. Labour Party Manifesto setting out proposals for reforming workplace law

4 key people predictions to manage legal risk in 2024

Staff retention and recruitment are going to be the key concerns for employers in 2024, according to a recent survey, and the most important areas which will require HR support will be mental health and wellbeing, followed by flexible and hybrid working, and diversity, equity and inclusion (DEI).

Here are our four areas organisations should be focussing on in 2024 to manage legal risk:

  1. While workplace culture and DEI will play an important part in attracting new talent and staff retention, the increased focus on DEI will also help organisations reduce exposure to litigation risk. To this end, we expect to see organisations implementing and updating DEI policies, training staff, and carrying out deeper reviews and campaigns around DEI issues.
  2. Also important will be a shift towards greater transparency. From our experience many organisations are thinking beyond their gender pay gap reporting obligations to voluntary reporting on their workforce and pay gaps, such as in relation to disability, social mobility, and ethnicity.
  3. Ensuring that individuals in the workplace feel comfortable about voicing their concerns about issues they face or perceive will be increasingly important to enhance employee engagement and root out problems before they cause significant damage.
  4. Organisations can expect the increasing use of AI in employment practices, whether in recruitment, performance reviews or other workplace process. This may also increase litigation risk, where the use of AI tools perpetuates existing bias embedded in employment processes. Organisations should be taking action to reduce these risks by re-examining how AI is used and retaining a human element in decision making.

Key dates for the diary

Date Change / Event
Early 2024 TUC to publish draft AI and Employment Bill setting out proposals for legal protection for employers and employees in relation to AI
Second consultation on regulations to bring The Seafarers Wages Act into effect
1 January 2024 Discrimination protections previously covered by case law are codified in regulations
Changes to record-keeping obligations, holiday pay, holiday carry-over and holiday accrual
17 January 2024 Closing date for ACAS consultation on draft Code of Practice on handling requests for a predictable working pattern
March 2024 Statutory Code to support the Employment (Allocation of Tips) Act to be published
Statutory Code on “fire and rehire” practices and the government’s response to its earlier consultation re this code to be published
April 2024 Unpaid carers to gain right to a week of flexible unpaid leave each year to care for dependants with long-term care needs
Minor changes to paternity leave expected
1 April 2024 New National Minimum Wage (NMW) rates will apply and live-in domestic workers will no longer be exempt from the NMW
New holiday entitlement and pay rules for irregular hours and part year workers, including rolled up holiday pay, for holiday years from 1 April 2024
6 April 2024 The right to make a flexible working request becomes a day one right
Greater redundancy protection in force for a wider category of workers (pregnant women and new parents)
1 July 2024 New TUPE consultation rules for smaller organisations (50 or fewer employees) and smaller transfers, for transfers taking place on or after 1 July 2024
July 2024 New rules will make it easier for employees to make a flexible working request
September 2024 New statutory right for workers and agency workers to request a predictable working pattern
October 2024 New duty for employers to take reasonable steps to prevent sexual harassment of their employees
2025 New rules to boost D&I and clarify non-financial misconduct in the financial sector
April 2025 Parents of babies who require specialist neonatal care will be entitled to 12 weeks’ paid statutory neonatal care leave

What to expect in UK employment law in 2024 – the detail

The remainder of this article sets out what developments you can expect in the following areas:

  • Atypical working
  • Families and pregnancy
  • DEI, Discrimination and harassment
  • Health and wellbeing
  • AI and recruitment/people management
  • Pay and benefits
  • Data Protection
  • Termination
  • TUPE and Working Time
  • Trade unions
  • Labour’s proposals

Atypical working

Flexible working reforms: The Employment Relations (Flexible Working) Act, expected to come into force around July 2024, introduces several important changes to the current flexible working regime which are set to make it easier for employees to make a request. See our update “Navigating the forthcoming flexible working reforms” on the key upcoming changes and ACAS’ recent consultation on an updated Code of Practice.

Separately, as from 6 April 2024, employees will be able to make a flexible working request from day one of their employment as from that date the qualifying period of 26 weeks’ continuous employment to make the request will be abolished. The Flexible Working (Amendment) Regulations 2023 have now been laid before Parliament.

As a result of these reforms, employers are likely to see a rise in the number of flexible working requests, with each request potentially taking more employer time to process.

 

Right to request a more predictable working pattern: The Workers (Predictable Terms and Conditions) Act 2023, expected to come into force in September 2024, provides a statutory right for workers and agency workers to request a predictable working pattern. ACAS is consulting on its draft Code of Practice on handling requests for a predictable working pattern, which will sit alongside the new right. The consultation closes on 17 January 2024.

 

Families and pregnancy

Carer’s leave: Unpaid carers will have the right to a week of flexible unpaid leave each year to care for a dependant with a long-term care need. The Carer’s Leave Act 2023 came into force on 4 December 2023, and the Carer’s Leave Regulations 2024, which are expected to bring the new right into force on 6 April 2024 have now been laid before Parliament.

Neonatal care leave and pay: Parents of babies who require specialist neonatal care following birth will be entitled to statutory neonatal care leave of up to 12 weeks’ paid leave under the Neonatal Care (Leave and Pay) Act 2023. This will be in addition to any entitlement to other types of family-related leave they may have, such as maternity or paternity leave. Regulations expected to bring the new rules into effect in April 2025, are still awaited.

Protection from redundancy for women and new parents: From 6 April 2024 it is expected that employers will be required to offer suitable alternative vacancies to a wider category of workers who are at risk of redundancy. Currently only those on maternity, adoption or shared parental leave have this right, but under the new law, redundancy protection will be extended as follows:

  • Pregnant employees – from the date the employee tells their employer they are pregnant until their maternity leave starts, or where pregnancy ends and they’re not entitled to maternity leave, until 2 weeks after the end of pregnancy.
  • Maternity and adoption leavers – for 18 months from the date of the expected week of childbirth (or the child’s birth if the employer is informed) or placement for adoption/date the child enters Great Britain
  • Shared parental leavers – for 18 months after the child’s birth or placement (or date they enter Great Britain), except if they have not taken maternity or adoption leave in which case they will still be protected during SPL but will need to have had six weeks’ continuous leave to qualify for protection after return from SPL.

The Maternity Leave, Adoption Leave and Shared Parental Leave (Amendment) Regulations 2024 have now been laid before Parliament.

Paternity leave and pay: The government announced earlier this year that employed fathers and partners will be entitled to take the current entitlement of 2 weeks’ paternity leave in 2 separate blocks of one week’s leave at any time in the first year after the birth of their child/adoption. There will be new notice requirements so that 28 days’ notice must be given before each period of leave although the notice of entitlement must be given 15 weeks before birth. Despite media reports that this change will take place in April 2024, draft regulations implementing the change are still awaited.

DEI, discrimination and harassment

Sexual harassment: The Worker Protection (Amendment of Equality Act 2010) Act 2023 establishes a new duty for all employers to take reasonable steps to prevent sexual harassment of their employees in the course of their employment. If an employer breaches the duty, it could potentially face enforcement action by the Equality and Human Rights Commission (EHRC), and/or an uplift of up to 25% in any compensation awarded if a tribunal finds that an employee has been subjected to sexual harassment and the employer failed to take reasonable steps to prevent that harassment.

The EHRC’s technical guidance on sexual harassment and harassment at work will be updated to reflect the new duty and to set out the steps that employers should take to comply. The new duty will come into force in October 2024 (one year after the day the new law was passed).

Financial services: In September 2023 the FCA and PRA published consultations announcing their proposals to boost diversity and inclusion (D&I) and clarify expectations on non-financial misconduct in the financial sector. These consultations have now closed and we await the regulators’ policy statements (expected in 2024) which will bring the proposals into effect one year from publication of the policy statements.

Discrimination protections post-Brexit: Regulations which came into effect on 1 January 2024 have codified a number of discrimination protections developed by case law which would otherwise have disappeared at the end of 2023 due to Brexit. The intention is that the law should continue to have the same effect after the end of 2023 as it did previously, but ultimately future courts will undoubtedly be required to preside over arguments as to whether the wording provides exactly the same protection as previous case law, and whether it resolves existing uncertainties which have arisen as a result of case law. For further details see “Top 5 recent workplace developments – November 2023“.

 

AI and recruitment/people management

New government regulation: There are currently no UK laws explicitly designed to regulate AI. Unlike the top down approach being taken by the EU which has recently reached political agreement on the proposed AI Act, the UK government’s White Paper “A pro-innovation approach to AI regulation” and consultation “AI regulation: a pro-innovation approach” (closed 21 June 2023) contain policy proposals to devolve regulation to sector specific regulators, laying the foundations for more guidance and potential regulation. 2023 has already seen a material shift towards greater AI governance with the ICO and EHRC for example having already published guidance on the topic. More guidance is expected in 2024 from the regulators including the CMA, HSE and FCA. We now await the government’s response to the consultation.

TUC proposals: In September, the TUC launched an AI taskforce to establish new legal protection for employers and employees. To this end, we expect the TUC to publish a draft “AI and Employment Bill” in early 2024 setting out their proposals for protections such as a legal duty on employers to consult trade unions on the use of high-risk AI, a legal right for all workers to have a human review AI made decisions and additional protections against discriminatory algorithms.

 

Health and wellbeing

Occupational Health: Employers will not be required to introduce automatic enrolment for Occupational Health (OH) provision or make its provision mandatory. Instead, the DWP will develop a voluntary framework setting out the minimum level of OH intervention that employers (depending on their size and resources) might want to adopt to help improve employee health at work. See “Occupational Health: Working Better”.

Fit notes: As part of the government’s new Back to Work Plan, the government plans to consult on reforming the fit note system, with the intention that individuals whose health affects their ability to work have easy and rapid access to specialised work and health support. The consultation will be launched after trials which are taking place in a small number of Integrated Care Boards which will offer better support to those who have received a fit note for a prolonged period of time.

Statutory sick pay: Expect a new inquiry into the effectiveness of statutory sick pay (SSP) and how it might be reformed to better support the recovery and return to work of those who claim it. A call for evidence issued by the Work and Pensions Committee will look at the level of SSP, the three-day waiting period and eligibility criteria.

Pay and benefits

Fair allocation of tips: The Employment (Allocation of Tips) Act 2023, expected to come into force on 1 July 2024, ensures that all “tips, gratuities and service charges” are passed on to workers without deductions, and are allocated in a fair and transparent way. The government has published a draft statutory Code of Practice for consultation and it is expected that the final version of the Code which will support the new rules will be published in Spring 2024. Non-statutory guidance is also expected at some point. Affected employers should prepare for the changes by reviewing how tips are allocated and distributed, preparing a written policy and make arrangements for keeping records and responding to queries/complaints from employees.

NMW: From 1 April 2024 the following new rates will apply:

  • 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)

Also from 1 April 2024, live-in domestic workers will no longer be exempted from the NMW.

Seafarers: The Seafarers Wages Act 2023, which received Royal Assent on 23 March 2023, ensures that seafarers on international services that make at least 120 calls at a UK port and who do not qualify for the UK’s NMW will be paid the NMW equivalent while in UK territorial waters. The government must now make regulations to bring the Act into effect.  A consultation on one set of regulations was launched in December 2023 and we are expecting a second consultation in early 2024. The latter is expected to cover the rate of a surcharge that harbour authorities will be required to impose on the operator of a service (surcharge tariff) if the operator does not provide a declaration, and detail on the equivalent rate to the NMW.

 

Data Protection

Proposals for reforming the UK data protection regime are set out in the Data Protection and Digital Information Bill which is currently making its way through Parliament. The reforms are intended to make compliance with the data protection rules less burdensome but will not be a radical departure from the current EU data protection regime. Proposed changes include: amending the grounds for lawful processing, introducing a new concept of “recognised legitimate interests”, making some minor changes to the rules relating to data subject requests, introducing restrictions on automated decision making, and some changes to current terminology (for example, “data protection impact assessments” will become “assessments of high-risk processing”). Click here to track the progress of the Bill through Parliament.

 

Termination

Limiting non-competes to three months: Non-compete restrictions in employment and worker contracts will be limited to a maximum of three months by legislation. No timeframe has been announced regarding when this requirement will come into force. Read more about this development in our update.

Changing terms and conditions (fire and rehire): The final version of the Statutory Code on the use of dismissal and re-engagement to bring about unilateral changes to employees’ terms and conditions (otherwise known as “Fire and rehire” practices), and the government’s response to its earlier consultation are expected in Spring 2024. The new Statutory Code of Practice will set out how businesses can hold “fair, transparent, and meaningful” consultation when changing employment terms. It will also include practical steps that employers should follow. In any related tribunal claims, the tribunal will have power to apply an uplift of up to 25% of any employee’s compensation where the Code applies and the employer unreasonably fails to follow it. Standard practice is often to use threat of dismissal to pressurise employees into accepting new terms. The draft Code makes it clear that threats of dismissal should not be used as a negotiating tactic, so the question that employers will be keen to understand is whether this is reflected in the final code. For background see our earlier update.

TUPE consultation and Working time (post-Brexit reform)

TUPE: The requirement to elect employee representatives for the purpose of TUPE consultation for businesses with fewer than 50 employees, and businesses of any size involved in a transfer of fewer than 10 employees will be removed for transfers taking place on or after 1 July 2024. Read more about this development in our update.

Holiday entitlement and pay changes, and working hours record keeping changes: Regulations make significant changes to the rules on holiday entitlement and pay in the Working Time Regulations 2018. The changes in force on 1 January 2024 include loosening the requirement to record working hours, clarification of what should be included in “normal remuneration” for the purposes of calculating holiday pay (such as including certain commission and overtime payments), and clarification of the carry over rules (effectively codifying previous case law). In addition, new rules for calculating holiday pay will apply for “part-year” and “irregular year workers” for holiday years from 1 April 2024; this will include permitting rolled up holiday pay for those workers. Read more about this development in our update.

 

Trade unions

Industrial action: The Strikes (Minimum Service Levels) Act received Royal Assent in July 2023 and the Code of Practice on the “reasonable steps” which trade unions must take to comply with a work notice issued by employers under the Act took effect on 8 December 2023. Regulations will, however, be needed to set specific minimum service levels in the affected industries; some have already been passed for some essential services, whilst others are still under consultation.

 

Labour Party proposals

The Labour Party, currently the opposition party in the UK, announced its intentions on workers’ rights at various conferences in September and October 2023. Whilst this does not, of course, represent their manifesto pledges, it gives employers some idea about what changes a Labour government may consider should they come into power in the UK following a general election.

Possible reforms include the following:

  • To ban zero-hours contracts
  • To end “fire and rehire”
  • To widen the pool of workers eligible to receive sick pay
  • To grant “basic rights” from day one
  • To increase the NLW to a rate that “working people can actually live on” and to expand the Low Pay Commission’s remit so that the NMW would for the first time take account of the cost of living
  • To enable unions to “stand up for their members”, and boost collective bargaining
  • To update trade union laws, including granting trade unions a legal right to access workplaces
  • To repeal the Minimum Service Levels Act, “stamp out” blacklisting, and simplify the statutory recognition process to ensure gig economy and remote workers can organise through trade unions
  • Various measures to tackle sexual harassment at work
  • To honour the UN Convention for the Rights of Disabled People and to introduce mandatory disability pay gap reporting for larger businesses, and facilitate workers securing reasonable adjustments from their employers
  • To introduce a new Race Equality Act to tackle structural racial inequality, which when first announced in 2020 included tackling the issue of low pay for ethnic minorities, with fines for organisations not taking appropriate action on their pay data
  • To take action to make more progress, more quickly on the gender pay gap, following Baroness O’Grady’s review into tackling the gap
  • To implement a provision of the Equality Act requiring political parties to publish anonymised candidate diversity data
  • To implement the Equality Act socio-economic duty on certain public bodies, which will require these bodies to adopt measures to address inequalities resulting from occupation, education, place of residence or social class.