With big changes coming to employment law next year, employers need to be aware of what’s around the corner and what they can do to make sure they’re prepared.
In anticipation of the upcoming changes to employment law in 2024, this article provides a comprehensive guide to what employers need to know, breaking down the key changes and ensuring businesses and employees are well informed about the evolving legal landscape.
The changes to record time keeping
How holiday pay is impacted
Whether leave can still be carried over
What the reforms mean for flexible working
The impact on redundancy protection
Employment Law Changes In 2024
There are three main changes coming to employment law next year, each triggered by a separate act of legislation.
On 8th November 2023, the Government published the draft Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 (“ER Regulations”).
The changes in this legislation relate to:
How holiday pay is calculated
Working Time Regulations
The majority of the changes will be in force from the beginning of the year, 2024.
We’ve summarised the main changes expected in this article.
Working time record keeping
Under the new legislation, businesses will no longer have to keep detailed daily records of the time their employees work.
Businesses will have to comply with existing Working Time Requirements, however the proposal removes the need to keep extremely detailed records on working time, which could be a waste of time and resources.
Holiday pay rates
As part of the changes rolled-up, holiday pay was evaluated with the Government addressing whether to combine the two pots of paid annual leave from the Working Time Regulations 1998 into one entitlement.
Currently the two pots are:
Four weeks’ leave entitlement – regulation 13
1.6 weeks’ leave entitlement – regulation 13A
The Government decided to keep these as they are.
The reason given, is that companies won’t face the costs of having to overhaul their payroll systems, but they will have clarity on what makes up normal pay.
The new legislation will instead focus on clearing up what’s considered ‘normal’ pay when calculating holiday pay. This addresses whether commission, length of service and overtime payments are considered normal payments.
The new laws reflect EU law. Basic pay for a 4-week holiday must include:
Payments, including commission, which are linked to the performance of tasks in which the worker is contractually obliged to carry out
Payments for professional status linked to length of service, seniority and professional qualifications
Overtime and other payments that have been regularly paid to workers in the previous 52 weeks
Rolled up holiday pay and 12.07% accrual method
The rules around holiday pay are being further overhauled in respect to irregular workers and seasonal workers. What is changing is that these types of workers will be able to be paid rolled-up holiday pay and it will be calculated on total earnings over the period of pay.
The method of calculating holiday pay for these workers will be based on a 12.07% accrual which is calculated on the hours worked. This will reduce the administrative red tape needed under the old regulations.
The new legislation came about from the Supreme Court ruling of its judgement on the Harpur Trust v Brazel case. In relation to what pay holiday and part-year workers should receive, the judge found that the correct interpretation of the Working Time Regulations 1998 was that they should not have their holiday pay pro-rated to be in line with the amount of work they perform each year.
Instead, they are entitled to 5.6 weeks statutory annual leave calculated using a holiday entitlement reference period to determine average weekly pay - this should not include weeks they did not work.
This entitles part-year workers to more holiday than part-time workers, even if they work the same number of hours in the year.
Carrying over leave
There will some changes to employee’s ability to carry over leave into a new holiday year. The Government are also restating some of the existing measures included in European law. This relates to when an employee can’t take leave due to family sickness or compassionate leave.
For irregular workers that have been on family-related or sick leave, the Government has included a 52-week reference period. This will allow employers to look back and calculate the average number of hours worked during the period and determine a holiday entitlement.
As mentioned, TUPE refers to the Transfer of Undertakings Protection of Employment Regulations 2006. These relate to small businesses with fewer than 50 employees and businesses of different sizes with a TUPE transfer, fewer than 19 employees. These types of businesses can negotiate directly with their employees if there are no employee representatives.
Where there are trade unions, employers will be required to consult with them.
Equality Act 2010 Amendments
Several amendments have been announced to the Equality Act 2010 as the Government looks to overhaul this area of the law.
The draft Equality Act Regulations 2023 (Amendment) includes the following amendments:
The ‘single source’ comparator test, the test for equal pay under the law, will be reinstated
The definition of disability will be extended to include someone’s ability to take part in working life on an equal basis with other workers - it currently only refers to an employees’ ability to undertake ‘day-to-day’ activities, which include things like ‘being able to run for the bus’ and ‘lift things’
A press release on Gov.uk announced that “Millions of British workers will have more flexibility over where and when they work as the Flexible Working Bill achieves Royal Assent”.
Under the bill workers will be able to request flexible working from the first day of a new job. Employers have a duty to consider each request and provide a reason before rejecting it.
Employees will have the right to make two flexible working requests each year, and they can be made within two months of each other - previously an employee would have to wait three months between requests.
These changes are good for both sides. Employees are increasingly expecting flexible working options and employers can benefit. Granting flexible working schedules can help businesses attract and retain the best talent.
This is backed up by CIPD research, which shows that 6% of employees changed jobs in 2022 due to a lack of flexible working options in their current role. 12% changed professions due to lack of flexibility in their sector, representing 2-4 million workers.
We’ve summarised our thoughts on the key takeaways of the new flexible working laws in a recent guide.
The Carer’s Leave Act will introduce a flexible entitlement of one week’s unpaid holiday per year for carers with a dependant with a long-term care need.
Like with wider flexible work reforms, the entitlement will apply from the first day of employment and evidence can be supplied by self-certification. The leave can apply to any type of care and there is no restriction on how the leave can be taken.
The Neonatal Care (Leave and Pay) Act 2023 is a new piece of legislation that gives parents the right to leave and pay if their baby is admitted into hospital aged 28 days or less and is in the hospital for 7 continuous days or more.
Some of the key elements of the act are:
Statutory pay for neonatal will be subject to 26 weeks’ service and the employee earning above the lower earnings threshold (£123 per week)
Maximum leave available is 12 weeks, taken in one block at the end of maternity or paternity leave
As with other changes leave is available from day one of employment
Allocation of Tips
The Employment (Allocation of Tips) Act 2023 passed into law on 2nd May 2023. It states that 100% of tips must be distributed amongst workers without deductions, except for tax and NI.
Tips must also be:
Split fairly between employees
Paid to workers no later than the end of the month in which the customer left the tip
Allocated in a clear written tips policy by employers
Recorded in a three-year record by employers to show how they’ve dealt with tips
Protection from Redundancy
New legislation has come into force to protect employees on maternity leave, shared parental leave, or adoption leave from redundancy. This will protect pregnant workers and returning parents leaving and coming back to work.
The Protection from redundancy (Pregnancy and Family Leave) Act 2023 became law on 24th July 2023. It gives employees involved in a redundancy process the right to alternative job roles before an employer can make them redundant.
Tips to stay on top of employment law changes and reforms: For employers
Our top three tips for staying ahead of the employment law reforms are:
Read – everything you can to stay informed about the coming changes and what your responsibilities are as an employer. Another recent change to employment law was granted assent by King Charles this September, giving employees the right to request a predictable working pattern
Create policy – you will need to create new policies in writing to cover your new duties and ensure staff understand their rights and obligations
Get expert support – you may need legal support, especially if you have any questions about the new changes to employment law
Get advice on the changes to employment law
For help and advice relating to employment law, speak to our team and get a free case assessment today. Our expert UK solicitors work online for fixed-fees to help you settle your legal matters quickly and affordably. Contact us for more information.