UK: Employment Reforms Update

Authors: Graham Mitchell, Corinna Harris & Sophie Jackson

We set out here some key UK employment law developments.

Tips – From 1 October 2024, new obligations for employers on dealing with tips will come into force. The measures include a new duty to ensure that workers receive tips, gratuities and service charges in full, and that those tips are allocated in a fair and transparent way.

Employers who are affected should ensure they have appropriate policies and procedures in place. There is also a new statutory Code of Practice on Fair and Transparent Distribution of Tips.

Sexual harassment – A new and significant duty on employers to take reasonable steps to prevent sexual harassment of their employees will come into force on 26 October 2024. For more details on how we can help your business prepare, please see our flyer and article. This is a matter that all businesses must take active steps to address.

Flexible working – The right to work flexibly has hit the headlines recently, with commentary  around rights to ask for full-time hours to be compressed into a four-day working week. Workers already have the right to ask for flexible working (including compressed hours) from their first day of work, but employers do not have to agree to this.

The new government plans to make ‘flexible working the default…except where it is not reasonably feasible’. It is not clear exactly what this will mean in practice, but we anticipate that the intention is to put a greater onus on employers to agree flexible working requests than is currently the case, whilst still allowing employers to decline requests where the working arrangement requested is not ‘reasonably feasible’.

Rather than giving workers an absolute right to work flexibly, this is more of an evolution towards more flexible working based on existing legislation.

Fire and refire – A new statutory Code of Practice on dismissal and re-engagement – often called ‘fire and rehire’ – came into force on 18 July 2024 despite Labour saying it did not go far enough.

We will have to see whether Labour introduce a strengthened version of the Code, as well as making other planned reforms on fire and rehire.  For further details on the plans, please read our detailed article.

The new Code sets out the steps that an employer should follow when it is considering making changes to terms and conditions and envisages it may dismiss employees if they do not agree to those changes. Where an employer has unreasonably failed to comply with the Code, awards for certain employment tribunal claims can be increased by up to 25%. However, the proposed new power for Tribunals to apply an uplift or reduction in compensation in collective consultation claims where a party failed to follow the Code has not come into force.

Trade unions and industrial action – The government has confirmed that it will repeal the Conservative government’s legislation which aimed to ensure minimum service levels during strikes. This repeal is expected to be included in the Employment Rights Bill expected by mid-October 2024. The government also plans to simplify the process for statutory recognition of trade unions and scrap other restrictions on strike action introduced by the Conservative government.

Right to switch off – It has been reported that workers who are repeatedly contacted by their employers outside of normal working hours may be able to claim uplifted compensation under the government’s planned “right to switch off”. We may see the government introducing a new code of practice to give workers this right. The code would not give workers a freestanding claim for compensation, but it may allow them to claim an uplift to compensation they receive where they succeed in another employment claim. Further details are awaited.

Immigration – for information on what we know so far about Labour’s immigration policies, please read our article What could proposed Labour policies mean for Business Immigration? : Clyde & Co (clydeco.com)

Key Action Points for Human Resources and In-house Counsel

There is a whole raft of UK employment law changes on the horizon that employers will need to grapple with. We will continue to update you on developments.