How will employment law change for employers in 2024?

It’s rare that we can forecast a quiet year ahead in employment law, and 2024 does not show signs of bucking that trend. Employment partner Emma Clark and associate Imogen Dale set out a guide to the most notable changes employers can expect to see in the coming 12 months, along with some predictions to look out for as the year progresses.

What lies ahead?

Flexible working

From April 2024, employees will be able to request flexible working from day one of employment. They can also make two requests for flexible working to their employer per year, and the current requirement for the employee to state how their request will affect the employer’s business if granted will be removed.

Under the Employment Relations (Flexible Working) Act 2023, employers will have to inform the employee of the decision within two months.

Holiday pay changes

There will be changes to rolled-up holiday pay and the holiday pay accrual system for irregular workers from holiday years from 1 April 2024.

Employers will have the option to use rolled-up holiday for irregular-hours and part-year workers (i.e. adding the worker’s holiday pay onto their hourly rate and paid when they perform the work instead of while on holiday).

The holiday pay for irregular hours and part-year workers will be calculated at a pro-rated 12.07% of hours worked in any pay period and capped at 28 days per year. The changes reverse the Supreme Court’s 2022 decision in Harpur v Brazel, which was considered to complicate the existing calculation in respect of such pay.

Whilst the roll-over of holiday due to inability to take it during busy work times during Covid will be removed, workers will now be allowed to carry over their accrued but unused holiday days if they are unable to take the full entitlement due to family leave or because of sickness.

Family-friendly leave

There are two notable family-friendly changes to be aware of this year:

• The Carer’s Leave Act 2023 comes into force in April and provides for a week’s unpaid leave per year for carers to look after a dependant. This day-one right applies to dependants who are a spouse, civil partner, child or parent of the employee, along with those who live in the same household as the employee or that reasonably rely on the employee to provide care.
• The right to first refusal of an alternative role in the event of a redundancy situation that currently applies to employees on maternity, adoption or shared parental leave will be extended in April by the Protection from Redundancy (Pregnancy and Family Leave) Act 2023 to pregnant employees and, for employees returning to work following parental leave, the protection extends to 18 months following the birth or placement of the child.

Off-payroll rules

New rules will come into force in April 2024 relating to the off-payroll working rules (more commonly known as IR35) where a worker is engaged via their personal services company. The new rules come after many years of lobbying in the industry and are a positive change for employers. From April 2024, where an employer is required to settle PAYE retrospectively because they incorrectly determined an engagement to be one of self-employment, tax that has already been paid on the same income by the worker and their personal service company will be eligible for offset against the employer’s PAYE liability. Under the current rules, this is not possible, such that ‘double tax’ is paid on the same income, and employers suffer an excess PAYE cost. The changes will apply to payments made from 6 April 2017.

TUPE consultation amendments for small businesses

For TUPE transfers on or after 1 July 2024, the Employment Rights (Amendment Revocation and Transitional Provision) Regulations 2006 provide that businesses can inform and consult with employees directly where they have fewer than 50 employees or where fewer than 10 employees are affected by the transfer, provided that there are no employee representatives already in place.

This change will be helpful for smaller business as they will no longer need to go through the process of their employees electing representatives and following a collective consultation process in relation to the TUPE transfer.

Protection against sexual harassment at work

From October 2024, a new law will come into force requiring employers to take reasonable steps to prevent sexual harassment of their employees in the workplace.

The Worker Protection (Amendment of Equality Act) Act 2023 will allow tribunals to uplift any compensation awards in employee sexual harassment cases. Further guidance is expected from the Equality and Human Rights Commission. Employers will need to ensure their policies and training are up to date and take a more proactive role in ensuring their employees’ safety at work.

Minimum wage increases

From April 2024, the National Living Wage hourly rate will change from £10.42 to £11.44 and now applies to workers from the age of 21.

Our predictions

A Labour win?

The Prime Minister has announced that he is expecting a general election in “the second half” of this year.

If, as polls currently suggest, Labour wins the election, the current Shadow Deputy Prime Minister Angela Rayner has pledged to implement the party’s New Deal for Working People within the first 100 days in office. This will include a ban on zero-hours contracts, ending fire-and-rehire, closing the gender pay gap and tackling sexual harassment in the workplace.

Limits to non-competition clauses?

In May 2023, the Government announced that it will proceed in introducing a statutory limit of three months on non-compete clauses in employment contracts and for certain worker contracts.

There has been no announcement as to when these changes will be brought into force – only “when parliamentary time allows” – but employers may wish to take note of the plans and adjusting their post-termination restrictions and potentially lengthen any notice periods accordingly.

New working patterns rights in force?

Workers on atypical and zero-hours contracts will soon have the right to request more predictable working patterns and hours, in what the Government describes as part of a bid to “tackle unfair working practices”.

It will still be within an employer’s power to reject the request.

It is yet to be confirmed when the Workers (Predictable Terms and Conditions) Act 2023 will come into force, but it is expected later this year.

Women’s health taking centre stage?

Finally, we think 2024 may be the year to shine a spotlight on women’s health in employment law, particularly in relation to fertility, periods and menopause.

Emma Clark has written about these topics in her articles:

• Employment law trends in 2023
• Supporting menopausal people in the workplace
• Women’s health in the workplace

If you have questions about any of the legislation changes in this article, please contact Emma Clark and Imogen Dale. If you have questions regarding the off-payroll rules, please contact Lee McIntyre-Hamilton.