Actions for UK HR teams in 2024

This year, we expect organisations will continue to look to the HR function for guidance on traditional matters like pay and conditions, engagement with the workforce and unions, and health and safety policy, and in becoming more diverse and inclusive, but HR teams can also expect to be involved in helping their organisation address political and regulatory uncertainty, navigating ESG requirements, and successfully adopting new technologies like AI.

Governance and reform

Monitor for further post-Brexit changes

Post-Brexit, there have been changes made to clarify employee rights in relation to holiday pay, TUPE, and equality law, designed to correct anomalies, codify existing case law, and clarify gaps – albeit potentially creating new ambiguities in the process.

With a general election anticipated sometime in 2024, it is unlikely that the government will take further steps to reform legacy worker rights derived from EU law, but it did call for ideas for smarter regulation. HR will want to monitor for further developments. It also remains to be seen to what extent the courts will re-open litigation on previously decided topics when they have more freedom to do so in 2024, now that retained EU law reforms have taken effect.

A final version of the draft statutory code of practice on dismissal and re-engagement is also expected in 2024.

General election

With the general election looming, it is vital that HR considers potential policy implications arising from a change of government. Angela Rayner, deputy leader of the Labour Party, outlined details of a new employment bill that she said a Labour government would publish within 100 days of taking office. The “New Deal for Working People” would contain many of the worker policy commitments referenced by Labour on previous occasions, including: repealing trade union and strike restrictions, expanding ‘day one’ rights, banning ‘fire and rehire’, banning zero hours contracts, and requiring payment of a ‘proper living wage’.

Embrace HR-led ESG

HR teams can play an integral role in helping develop and implement an organisation’s environmental, social, and governance (ESG) strategy and supporting their organisation in complying with related law and regulation. It can also be a driver of participation in voluntary schemes and initiatives pertaining to ESG issues, such as the Real Living Wage and Disability Confident.

HR data collection and benchmarking to monitor people-related ESG progress is a significant contribution, as is guarding against ‘social washing’. Employers will also want to check whether they are subject to detailed public workforce reporting under the EU Corporate Sustainability Reporting Directive, whether directly or as part of a supply chain or group arrangement.

HR may want to monitor for the outcome of the UK government consultation on new non-financial reporting obligations. The proposed new measures could lead to changes in gender pay gap reporting, but there are wider potential workforce implications too.

Voluntary publication of ESG / sustainability reports is also becoming more commonplace given the demand for greater transparency from key stakeholders, particularly investors.

Data, the digital workplace, and business protection

Ensure integrity of whistleblowing structures

HR and compliance teams are guardians of effective whistleblowing systems. Maintaining the integrity of whistleblowing procedures is even more important now that they form part of procurement responses and often market-facing ESG reporting. There may be a rise in whistleblowing concerns around environmental matters and the use of AI following some high-profile examples reported in the media. The UK government launched a review to examine the effectiveness of the whistleblowing framework in meeting its original objectives, and HR will also have an eye to the EU Whistleblowing Directive in terms of monitoring best practice or global compliance.

Factor in AI to HR decision-making

HR should already be assessing how AI can generate efficiencies for HR and other work processes, while managing associated risks. They should be considering AI adoption through the ESG lens.

Prepare for changes to non-compete clauses

The UK government proposes a maximum three month period for non-compete clauses in employment contracts, to give former employees more flexibility to join a competitor or create a rival business. Draft legislation is awaited. Although the government has not confirmed any timetable for this change, HR should prepare in 2024 to ensure business retains required protection, by reviewing which contracts and key people may be impacted.

Workforce reward and structure

Protect your workforce

Having a workforce structure that delivers value to the business, whilst also being consistent with wider company purpose, is an area of ESG focus. The growing recognition of workforces as a business asset has helped grow the demand for workforce data analytics. HR may want to ensure data collected has a clear business use and that data protection laws are complied with. A government review will report on how the future labour market should be shaped, including how to build on “good” flexibility in the labour market and the gig economy. Employers also active in the EU may watch the continued progression in 2024 of the proposed EU directive to protect the rights of platform workers. HR can identify new talent pools and consider whether 2023 retention strategies proved effective as worker shortages continue in the UK.

Review employee engagement strategies

Employee engagement strategies are growing in profile as corporate governance frameworks place value in engaging employees as business stakeholders. Long-term business sustainability is linked to engagement. Trade union recognition is one channel, but employee engagement is wider and might include giving non-executive directors an engagement remit, appointing worker directors, or operating advisory panels, focus groups and surveys.

Engagement can bring a greater diversity of viewpoints to the decision-making process and can serve as a sounding board for proposals. It can also help direct corporate purpose and values and be a channel for workforce concerns. HR may find it helpful to assess whether current engagement strategies meaningfully influence the business.

Review industrial relations strategies

Industrial relations strategies need to be monitored and reviewed to minimise business disruption. There are potential legal changes on the way that HR should follow the progress of. They include:

• the Supreme Court’s decision in the case of Mercer v AFM. The Court of Appeal confirmed that detriment protection does not protect employees from action short of dismissal if they take part in strike action;.
• a new consultation with the aim of reinstating flexibility for employers to hire agency staff to cover industrial action, though any new legislation may be challenged by unions;
• a revised draft statutory code of practice on picketing;
• a new draft statutory code of practice in relation to some dismissal and re-engagement strategies has been published and a final code is expected in spring 2024;
• the impact of the first sectoral implementation of minimum service level legislation will need to be assessed throughout 2024;
• restrictions on public sector check-off facilities will come into force on 9 May 2024.

Implement salary and benefit changes

Increases to the national minimum wage, national living wage (NLW), and statutory payments including maternity, paternity, adoption and shared parental leave pay, will be implemented in April. Most notably, the maximum NLW rate will increase to £11.44 per hour from £10.42 currently and apply to those aged 21 and over – currently the maximum rate only applies to workers aged 23 and over. The Employment (Allocation of Tips) Act will also make it illegal for employers to withhold tips from employees.

Assess annual leave entitlements

Legislation reforming holiday pay came into force on 1 January 2024. There is a lot to digest, but key measures include changes to holiday accrual and rolled-up holiday pay for part-year and irregular hours workers. Methods for calculating aspects of holiday pay are also set out along with entitlements to carry-over of annual leave. HR may want to review holiday pay and record keeping for compliance, including how bonus is calculated.

Assess workforce productivity and profitability

HR should review how the cumulative effect of workforce trends over the last few years have impacted productivity. Obvious examples are hybrid and flexible working, AI, skill or workforce shortages, and rising ill health absence.

A recent report shows a general trend of workers wanting to work fewer hours post pandemic. HR may want to ensure that systems, policies, and procedures are fit for increasingly diverse work patterns and workers with different skills and needs. HR may also want to review whether existing methods of performance management are effective. Reports of “labour hoarding” as a result of worker shortages have also been identified. This is where employers retain workers that are surplus to needs to avoid future hiring difficulties. HR may want to identify whether that is happening and if it is efficient.        

Training and skills development

HR should consider refreshing training and skills development programmes to ensure they reflect current business needs. Green initiatives, AI and other technological change, and forthcoming changes to immigration rules may have a particular impact on skills needed. ESG strategies encourage accountability around how businesses have sought to minimise negative impacts on the workforce. Offering retraining will be central to that. HR may also want to look at its own skill development programme, to ensure they are equipped to deal with new HR challenges, especially in relation to emerging technologies. 

D&I, wellbeing and culture

Culture

D&I, wellbeing, employee engagement, whistleblowing, and other aspects of the overall “employee experience” are part of the HR remit and are integral to organisational culture. Workforce culture is increasingly observed externally by other stakeholders, such as customers and investors, as part of ESG reporting and monitoring. Potential recruits may also take perceived culture into account before applying for roles in the organisation. Many businesses already see HR as a leader of business culture but if that is not the case, HR may want to assert its ownership of aspects of business culture.

Diversify board and senior leadership

HR can work with nomination committees to ensure recruitment processes support diverse representation. Gender and ethnicity inclusion is already in the spotlight under an array of governance initiatives, and socio-economic diversity is gaining attention. In 2024, the impact of FCA rules requiring UK-listed companies to set out whether they have met board diversity targets in their annual reports should continue to be monitored by relevant HR teams in the sector..

The FTSE Women Leaders and Parker reviews will continue to provide external scrutiny. The scope of employers included in these reviews expanded in 2023, in particular in relation to the largest private companies, and some employers have refreshed their targets as a result.

Respond to gender identity

HR will need to manage their organisation’s response to the expression of gender identity in the workplace.

The EHRC provided initial guidance to the government on the legal effects of changing ‘sex’ in the Equality Act to mean ‘biological sex’. Since then, the Inner House of the Scottish Court of Session decided that sex in the Equality Act does not mean biological sex and includes those who have a gender recognition certificate. However, this was in the specific context of a judicial review of legislation around the inclusion of women on public boards in Scotland. The Scottish Parliament’s Gender Recognition Reform (Scotland) Bill was blocked by the UK government using powers in the Scotland Act Nonetheless, HR will want to monitor for further developments in law and case law.

Refresh harassment prevention

HR teams need to ensure that workplace initiatives remain up-to-date in respect of  all protected characteristics and respond to new legislation.

Draft UK legislation to regulate non-disclosure agreements is awaited. In 2024, new legislation is also set to introduce a new proactive duty to prevent sexual harassment by requiring employers to take “reasonable steps”, rather than “all reasonable steps” as was originally proposed. That legislation also empowers tribunals to uplift awards by up to 25% if this duty isn’t complied with. In England, a new offence of public sexual harassment is to be created, while the Scottish government plans new criminal legislation to challenge ‘public misogynistic harassment’. HR should revisit and refresh harassment prevention strategies, particularly given the resurgence of harassment cases seen throughout 2023.

Target positive action

Employers may consider using positive action to avoid stalling on D&I targets. Government guidance on positive action was published in 2023.

Leverage data to reduce pay gaps

D&I data collection can provide a useful focus even when not legally required, for example in respect of gender, ethnicity, and disability representation and pay. HR can then guide the business on transparency issues and provide a narrative in respect of how the data should be interpreted and the relevant actions the business is taking to address identified shortcomings.

The government finalised employer guidance in 2023 to ensure responsible and accurate reporting of ethnicity data. The outcome of its review of the gender pay gap regulations is awaited and some EU-wide employers will be considering the impact in 2024 of the EU's Pay Transparency Directive. Disability workforce reporting will attract renewed attention, with the UK government expected to respond to its 2022 consultation. Multi-jurisdictional employers may want to consider the value that a global D&I data collection project may add to their group pay equality strategy.

Support disabled and neurodivergent workers

HR input may be needed if the UK government completes its review of the Disability Confident Scheme.

Support older workers

There was some focus on “unretirement” of older workers post-pandemic as it was expected that financial pressures may cause some workers to delay retirement or re-enter the workforce. The government did not pursue its idea of a “returnership” programme in 2023, but where employers continue to experience resourcing difficulties, initiatives to attract older workers, and retention strategies focussing on flexible working, caring, re-training and wellbeing, may still remain valuable for HR teams to explore.

Review family friendly policies

Planning for legislative change is required. Family-friendly legislation has been passed and preparations can be made now, including policy updates, for the rights and obligations they create coming into force. These include:

• a new right to paid leave for parents of babies requiring neonatal care, expected April 2025;
• leave for unpaid carers, expected April 2024;
• giving pregnant women and new parents greater protection against redundancy, expected 2024; and
• a day one right to request flexible working, expected April 2024.

The government. has introduced draft legislation bringing in flexibility over when and how paternity leave can be taken too. HR may want to monitor for that and consider whether it impacts existing policies on paternity leave. This is expected to come into force as early as March 2024.

As part of initiatives to recruit and retain workers, HR may also want to consider supporting career break returners. They should have reference to government guidance for employers who are looking to support people returning to work after a career break, which is focussed on returners who have childcare or other caring responsibilities.

Improve workers’ health and wellbeing

HR can make a significant contribution to an organisation’s culture in the way in which they address health and wellbeing . Getting economically inactive parts of the workforce back to work and reducing sickness absence of those in work is a significant policy objective of the UK government. Employers should expect more people with long-term health conditions to apply for roles and may want to review their own sickness absence rates with a view to getting workers back to work.

Health and safety issues impacting women should continue to attract HR attention too, with the need to support those impacted by menopause, menstruation and domestic violence, for example. Notably, the government’s response to the Women and Equalities Committee report, ‘Menopause and the Workplace’, favoured pro-active development of best practice rather than legal change in the near future. New legislation in Northern Ireland will, however, introduce at least 10 days of "safe leave", per leave year, for employees who are experiencing domestic abuse.

The Workers (Predictable Terms and Conditions) Act is intended to combat one-sided flexibility and would apply to all workers and employees, including agency workers. If a worker’s existing working pattern lacks certainty in terms of the hours or times they work, or if it is a fixed term contract for less than 12 months, they will be able to apply to change their working pattern to make it more predictable. The rights and obligations this legislation creates are not yet in force but are expected to be in 2024. HR may want to review how this may impact on their business and how it may be used as part of wellbeing initiatives.

Co-written by Gemma Herbertson of Pinsent Masons.