What lies ahead in 2024? In this programme we’ll ask ten of our lawyers what they think might lie ahead. It’s highly likely there’ll be a General Election at some point this year and current polling suggests a change of government with Labour taking over. So, repeal of some laws and a strengthening of workers' rights is very much on the cards.
2023 saw the government make some major decisions about post-Brexit employment reform and they backed an unusually high number of private members’ bills. Those reforms have spilled into 2024 meaning we can expect a lot of employment law reforms this year as we approach the election. After that, probably, a lot more change under a new government.
So, let’s get a snapshot of what might lie ahead across the main subject areas of employment law. I asked the lawyers heading each area to tell me, in a nutshell, what they expect to see. In sequence, this is what they had to say:
IMMIGRATION - Shara Pledger: ‘A key issue to look out for and to be wary of in immigration and global mobility in 2024 is changes to the law. Here in the UK, we are constantly reminded of how swiftly and comprehensively politics affects immigration policy. 2024 will see increasing salary thresholds for migrants looking to work in the UK, or to live here with their family. These are big impact changes and there is more to come on how they will be applied in individual cases. Elsewhere in the world, we see similar mindsets focused on reducing migrant numbers, or otherwise favouring resident labour markets at the expense of freedom of migration. The policy of Emiratization in the UAE, and tightening of restrictions in countries such as Singapore, are examples of this. In other jurisdictions, more flexibility is being introduced to address labour shortages, such as in Luxembourg, as well as the increased use of so-called digital nomad visas in countries including Norway and Portugal.’
SHARE PLANS - Lynette Jacobs: ‘I think the biggest issue for HR professionals in the UK with responsibility for executive remuneration may well relate to the impact of next year's General Election and, if the Labour party wins as is widely predicted, whether it would look more closely at the taxation of executive incentives.’
NMW - Jon Fisher: ‘From the national minimum wage perspective, the biggest issue for HR professionals will be looking at salaried people. The new rate of national minimum wage will be over £22,000 pounds for a full-time employee so HR professionals need to look at salaried people, make sure they're not doing unpaid overtime, make sure all their working hours are recorded, and make sure they're receiving the national minimum wage after salary sacrifice has been taken into account.’
TRAINING - Trish Embley: ‘From a training point of view, I think the biggest issue for HR in 2024 will be education around the new positive duty to take reasonable steps to prevent sexual harassment that will be coming in. Next year, the quality and Human Rights Commission will have the power to take enforcement action, and employers can face increased compensation claims for breach of this duty. As part of an overall cultural audit, HR teams would be very wise to review their existing training on this topic and consider whether this needs to be tailored to the particular risks in individual parts of the business.’
EMPLOYMENT TAX - Chris Thomas: ‘From a tax perspective, I think the biggest issue remains off-payroll working. HMRC has recently made some changes to how its CEST tool works and we understand that it's planning a more radical revamp over the course of the next year or so. We're also expecting some quite key court decisions on IR35 so all of that is likely to affect the way that status determinations need to be made. We're also expecting the government's response to its consultation on umbrella companies which included some fairly radical ideas that could impact on end users in terms of liability and in terms of due diligence requirements. So, I think overall, the message to HR is you do really need to keep your eye on the ball in relation to off-payroll because, unfortunately, it's still very far from being a settled area and there's a lot of potential for it to bite you if you don't make sure that your processes are properly up to date and, importantly, that the business is actually properly implementing them.’
TUPE (Gill Ross) – ‘In 2024 in the TUPE world we're going to see a really helpful change to the TUPE regulations meaning that any transfers which happen after 1 July 2024, no employee reps will need to be elected if the transfer involves less than 10 employees, or the employer has less than 50 employees overall. Hopefully, the government will also look to address the tricky issue of fragmentation and split employment contracts but, sadly, there's no commitment to do so currently.’
FS SECTOR - Chris Evans: ‘I think the biggest issue in 2024 for HR professionals in the FS sector will be when details of the Edinburgh reforms are published. The Edinburgh reforms include proposals to reform the employment regulatory landscape. Depending on the nature and scale of the reforms, this could give rise not only to significant procedural changes, but also open the door to complex litigation if there are uncertainties over obligations and regulatory requirements.’
EUROPEAN RESTRUCTURING - Lara Willems: ‘In Germany, particularly in the building industry, we see many insolvencies and my colleagues in other European countries are seeing the same, therefore, we expect that the number of restructuring projects will grow in 2024. From my perspective, being connected internationally will continue to be key because problems do not stop at the border and many of our clients have offices in several jurisdictions around Europe, or even around the world. It is necessary to develop a legal solution together with our international colleagues.’
DATA PROTECTION - Harriet Dwyer: ‘I think there are a couple of things we can expect to see in relation to GDPR which HR professionals should be looking out for in 2024. Firstly, I think we can expect new ICO guidance. During 2023, the ICO issued a number of pieces of guidance directly aimed at employers in relation to processing data in compliance with the GDPR. I think given this trend we have already seen, we could expect to see more guidance issued in 2024. HR professionals should be on the lookout for this as it might impact on their current way of doing things, or act as a helpful reminder to review and update data protection policies. Secondly, we can expect to hear more on the Data Protection and Digital Information Bill, which is intended to simplify, and update, the UK’s current data protection framework. The coming into force of the DPDI Bill is unknown, but it will be helpful if businesses can keep up to date with the progress and the possible changes to the current framework. Some of the changes we are expecting to see include scrapping the balancing exercise between an individual's rights and freedoms and the business's legitimate interests, and also in relation to easing some of the challenges organisations face when responding to subject access requests. So, it's definitely something to be looking out for.’
So, that’s what we think lies ahead for HR in 2024. Shortly before Christmas the team put together a Review of 2023 along with a summary of the legislative developments which the government has planned for 2024. You may be interested in that, so we’ve put a link to that in the transcript of this programme for you.
Pinsent Masons’ Weekly Briefing: ‘What’s on the Agenda for 2024’*
*See below the text from the relevant December 2023 edition of EL+ Weekly Briefing:
What’s on the agenda for 2024 – our review of recent developments and our predictions for 2024 will feature in our briefings in the run-up to Christmas. In week one, we look at employment reform, TUPE, and immigration.
Employment Reform - Another year passes with no Employment Bill, but the UK govt. progressed policy commitments by backing seven private members’ bills. All have received Royal Assent but the rights and obligations they create are not yet in force:
- carer’s leave,
- tips and service charges,
- flexible working,
- predictable working patterns,
- sexual harassment,
- extending maternity-related redundancy protection, and
- ·neonatal leave and pay.
That still leaves many govt. policy commitments outstanding, including tighter regulation of NDAs, references, and a single enforcement body.
The govt. issued draft regulations, due to come into force on 1 January, to clarify rights in relation to holiday pay, TUPE and equality law. They are designed to correct anomalies, codify existing case law, and clarify gaps, albeit potentially creating new ambiguities in the process. We await draft legislation to progress the govt.’s proposal to limit non-compete clauses to three months to heighten competition. Before a general election it is unlikely that the govt. will take further steps to reform EU legacy worker rights, but it did call for other ideas for smarter regulation, and HR will want to monitor for further developments.
Smarter regulation policies overlap with new Brexit changes in force on 1 January. The Retained EU Law Act will change the status of EU law retained in the UK. The govt. has wide powers to restate, reproduce, revoke, or replace aspects of EU law, and used these powers for changes to holiday pay, TUPE, and equality law. 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. (A new round of holiday pay litigation anyone?)
Attention has also turned to what any future Labour govt.’s reform programme might look like. Angela Rayner, Deputy Leader of the Labour Party, outlined details of an employment bill that a Labour govt. would publish within its first 100 days. The “New Deal for Working People” would contain many of the worker policy commitments referenced by Labour on previous occasions, including: repealing TU and strike restrictions, expanding ‘day one’ rights, banning ‘fire and rehire’, banning zero hours contracts and requiring a ‘proper living wage’.
2024
- Carer’s leave (anticipated April)
- Tips and service charges (anticipated May)
- Flexible working (anticipated July)
- Predictable working patterns (anticipated September)
- Sexual harassment protections extended in Worker Protection Bill (anticipated October)
- Extending maternity-related redundancy protection (no date fixed, potentially 2024)
- Changes are also anticipated around parental leave (no date fixed), to make it easier for parents to take leave, and allow for shorter blocks of leave.
- Further PMBs backed by the govt?
- Further use of post-Brexit powers to amend laws of EU origin?
- General election must take place before 28 January 2025
2025
- Neonatal leave and pay (anticipated April)
TUPE - The govt. brought forward draft legislation to allow employers to consult directly with colleagues affected by a TUPE transfer if the business has fewer than 50 employees or if the transfer affects less than 10 employees. Some employers were disappointed by the missed opportunity to increase flexibility to make changes to terms and conditions post-transfer.
In case law:
- the Court of Appeal endorsed an EAT’s decision that a right to participate in a share plan of substantial equivalence transferred under TUPE to the new employer in Ponticelli UK Limited v Gallagher;
- the EAT decided in Rajput v Commerzbank AG that an ET had been wrong to focus on UK parts of a transferring business when assessing the TUPE transfer date. It was situated in the UK but also had overseas components. An important reminder not to exclude international aspects when planning for a transfer.
- (not a TUPE case, but relevant for employers to consider on outsourcings to which TUPE applies) - where an end user client retains control over the pay of outsourced workers and they are less favourably paid than directly employed workers, discrimination claims may be made against the end user, as set out in The Royal Parks Ltd v Boohene.
2024
- TUPE consultation changes in force 1 January
Immigration - In December, the govt. announced plans to cut net migration by implementing measures including:
- health and care workers will face dependant restrictions from “Spring 2024”, and sponsors in the social care sector will need to be regulated by the Care Quality Commission,
- the Graduate route will be reviewed and possibly limited or removed from the rules,
- increasing the earning threshold for most Skilled Workers from its current position of £26,200 to £38,700,
- ending the 20% going rate salary discount for shortage occupations and replacing the Shortage Occupation List with a new Immigration Salary List which will retain a general threshold discount, and
- increasing the minimum income needed by a person supporting a family route application (e.g. a British citizen who wants to support their spouse). The current rules and salary thresholds will remain in place until these changes are implemented.
Other rules changes have been introduced at regular intervals, including modest increased salary thresholds and the move towards Electronic Visa Waivers. Measures continue to be announced to reflect visa agreements within new international trade deals, but these have resulted in low impact changes for nationals of New Zealand, Australia, Canada, Japan, and elsewhere. The expanded restriction on dependants of international students, announced earlier in 2023 and taking effect from January 2024 will be a more seismic shift.
In April, UKVI also updated guidance for employers and educators. Various amendments included new reporting obligations and specific guidance concerning work location and home working. Home Office compliance action is on the increase after low levels of activity during Covid lockdowns.
Before the December announcement on curbing net migration, the MAC had already recommended abolishing the Shortage Occupation List and focussing on addressing skills shortages through sector specific schemes instead. The government has been reluctant to pursue sector-focused options. The Seasonal Worker Scheme is active, permitting agricultural workers to come to the UK to work for a limited time. We have previously seen similar sector-focused initiatives around times of acute labour shortage, but nothing long-term.
Fines for hiring illegal workers, which are currently £15,000 for one-off offences, will increase to £45,000 per illegal worker in early 2024. Employers who are found to have hired illegal workers on more than one occasion, may face an increased penalty of up to £60,000 per worker. A new draft code of practice sets out the prescribed checks that employers should conduct to avoid a civil penalty in respect of illegal working, and the factors taken into account by authorities when determining the amount of any penalty.
2024
- Increased fines for hiring illegal workers
- Await formal guidance from the Home Office on how and when changes to reduce net migration will be implemented
For the second part of our review of 2023, we focus on pay and benefits (including holiday pay), industrial relations, workforce structures, whistleblowing and data.
Pay & benefits – Holiday pay - Two post-Brexit consultations on reforming holiday pay concluded and draft legislation was published. 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; what is normal remuneration; and entitlements to carry-over of annual leave. We are helping clients assess the potential new ambiguities around these changes (including UK’s ‘unclear’ new holiday pay regulations may catch bonuses, lawyer warns), and there are actions which can be taken which can help mitigate any risk. The Supreme Court ruling in PSNI v Agnew was favourable to workers. It confirmed that a three-month gap in a series of deductions claim under unlawful deductions from wages provisions will not automatically result in holiday pay claims being timebarred. This decision will be of greater importance to employers in Northern Ireland. GB has a restriction on workers claiming more than two years’ backdated holiday pay.
From 1 April 2024 the National Living Wage will increase to £11.44 per hour (currently £10.42) and will apply to those aged 21 and over. (It currently applies to workers aged 23 and over). Increases will also be made to the National Minimum Wage. The Living Wage Foundation increased the UK real living wage (a voluntary scheme for employers) to £12 (£13.15 in London) for 2023/ 24.
A govt. backed private members’ bill produced the Employment (Allocation of Tips) Act. It will become illegal for employers to withhold tips from employees. The rights and obligations this legislation creates are not yet in force but are expected in 2024.
The EU cap on bankers’ bonuses was scrapped in the UK in October.
2024
Trade unions and industrial action - The Strikes (Minimum Service Levels) Act 2023 gave the govt. broad powers to impose minimum service levels on employers in six service sectors to restrict employees’ ability to strike. The govt. also consulted on a draft statutory code of practice that sets out the reasonable steps a union can take to ensure that all members of that union who are identified within an employer work notice comply with minimum levels of service specified in the notice during strike action. Minimum service levels for rail, border security and ambulance services are now in force. The govt. consulted on minimum service levels for fire and rescue services and is currently consulting on minimum service level proposals for hospital services and education.
The High Court ruled that legislation allowing the use of temporary staff during strike action was unlawful as the govt. failed to comply with consultation requirements before implementation. The govt. has since launched a new consultation with the aim of reinstating this flexibility for agencies to supply staff to cover industrial action. The consultation will close on 16 January but any new legislation may yet be challenged by unions.
It is unlikely that trade unions can directly enforce most check-off facilities which form part of employment contracts following Secretary of State for the Home Department v Cox. Regulations were laid before Parliament to prepare to bring restrictions on check off facilities in the public sector into force in May 2024.
This month, in the Supreme Court, Unison will seek to overturn the Court of Appeal’s decision in Mercer v AFG that protection against detriment on the grounds of trade union activities does not extend to strike action.
2024
Workforce structure - Attention focussed on the economically inactive population with the ONS reporting that between April and June there were 8.69 million individuals in this category. The govt’s spring and autumn budgets included measures to reduce this figure. Concern also rose around rising sickness absence from those in work, with the CIPD reporting that sickness absence was at its highest level in over a decade. The DWP then updated guidance on issuing fit notes. Although changes to fit notes and SSP were anticipated in the autumn statement, the Chancellor only noted that the govt. is trialling reforms to the fit note process and will also consult on reforms to improve the use of fit notes.
A govt. backed private members’ bill produced the Employment Relations (Flexible Working) Act that will make it easier for employees to request flexible working arrangements and regulations will make flexible working a “day one” right. Acas also consulted on updates to its flexible working Code of Practice.
A govt. backed private members’ bill produced the Workers (Predictable Terms and Conditions) Act. It is intended to combat one-sided flexibility and covers all workers and employees, including agency workers. The rights and obligations this creates are not yet in force but are expected in 2024. Acas is consulting on a new predictable working request code of practice.
The govt. consulted on a draft code of practice on dismissal and re-engagement and published a detailed and comprehensive protocol. A final version of the code is likely in Spring 2024.
2024
Whistleblowing and investigations - The govt. launched a review to examine the effectiveness of the whistleblowing framework in meeting its original objectives and ACAS issued a new whistleblowing at work guide.
The FCA published the results of a survey of whistleblowers and outlined actions to improve the confidence of future whistleblowers. The FCA wants improvements in relation to making whistleblowers feel “heard” when they first report and reducing whistleblowers’ frustration in relation to updates.
The UK Labour party signalled its own plans to strengthen the whistleblowing protections for the reporting of sexual harassment in the workplace should it be voted into power at the next UK general election.
Ajaz v An NHS Foundation Trust confirmed that new detriment claims can be raised even if based on protected disclosures relied on in earlier litigation. However, COT3s can prevent future detriment claims.
A Scottish decision highlighted the need for employers to work with their legal teams to establish whether privilege applies to investigation reports.
2024
Data protection and convictions - The ICO published new employer guidance on subject access requests, monitoring workers and information about workers’ health. Two consultations were also launched this month on draft guidance on recruitment exercises and keeping records about workers.
Important changes to the periods it can take for certain convictions to become spent also came into force in October. A review of the effectiveness of the disclosure and barring regime in safeguarding children and vulnerable adults was also published.
The govt. brought forward regulations to amend UK data protection legislation to refer to rights derived from UK law, rather than retained EU law rights.
2024
- 1 January holiday pay changes in force
- NMW/ NLW increases take effect
- Single enforcement body legislation awaited
- Restrictions on public sector check off facilities in force - 9 May
- Possible lifting of ban on use of agency workers during strike action and possible TU challenges to its removal
- Re-invigoration of various 2022 policy commitments? These included plans to require unions to put pay offers to a member vote to ensure that strikes can only be called once negotiations have genuinely broken down; ballot turnouts raised from 40% to 50%; notice period for strike action increased from 2 to 4 weeks; a “cooling off period” after each strike and union payments during strike no longer tax free
- Flexible working as a “day one” right in force – 6 April 2024 (additional changes to flexible working rights may be in force on the same date but unconfirmed)
- Right to request predictable working pattern in force – likely September 2024
- Govt. response to draft Code of Practice on Dismissal and Re-engagement - Spring 2024
- Fit note trials and consultation
- Draft legislation to limit non-compete provisions in employment contracts to max. three months
- Outcome of UK whistleblowing review
- Businesses with an EU presence continue to adjust to requirements of the EU whistleblowing directive
- New ICO guidance on recruitment and worker record keeping
- Further post Brexit change to data protection legislation based on the EU GDPR?
- Changes to Scottish disclosure regime (by April 2025)
In our final part of our Review of the Year we round up equality developments flowing from Brexit and other developments impacting pay transparency/ gender pay gap, harassment, positive action, family friendly, menopause, gender and ESG. Best wishes for a very relaxing and enjoyable festive season.
Brexit codification - To avoid eroding employee rights when EU laws are revoked at end 2023, new draft regulations amend the Equality Act to retain EU-derived equality rights.
Pay transparency/ gender pay gap - The EU adopted its pay transparency directive to tackle pay discrimination. The directive will represent notable legal change in many EU countriesand UK employers will need to be alive to the implications. As part of a review of non-financial reporting, the govt. is looking at gender pay gap reporting. The Fawcett Society publicised the reduction in the mean gender pay gap for full time employees to 10.7%, from 10.9% last year.
Harassment - A govt. backed private members’ bill to strengthen harassment protection in the workplace received Royal Assent. The rights and obligations it creates are not yet in force but are likely to come in 2024. It introduces a new proactive duty to prevent sexual harassment by requiring employers to take “reasonable steps”, and it empowers tribunals to uplift awards by up to 25% if this duty isn’t complied with. Employers are advised to revisit and refresh harassment prevention strategies, particularly given the resurgence of #MeToo that has taken place in 2023.
Positive action - The govt. published guidance on positive action which enables employers to take proportionate action to reduce disadvantage, meet different needs and increase participation, and can be used to improve equality of opportunity and to recruit or promote candidates.
Family friendly rights - Private members’ bills enhancing family friendly rights received Royal Assent:
- The Carer’s Leave Act - a new statutory unpaid leave entitlement for employees who are caring for a dependant with a long-term care need;
- The Protection from Redundancy (Pregnancy and Family Leave) Act – extends existing maternity-related redundancy protection. The legislation enables the govt. to give women a preferential right to any suitable available vacancy while pregnant and for 18 months after birth. There will be new adoption leave and shared parental leave redundancy protections too; and
- The Neonatal Care (Leave and Pay) Act - parents will be entitled to 12 week’s neonatal pay and leave.
These new protections will come into force in April 2024. The govt. will also introduce legislation bringing in flexibility over when and how paternity leave can be taken, but there will be no change to Shared Parental Leave.
Menopause: The govt. confirmed that no legislative change will be brought forward despite the increasing profile of menopause in the workplace. A govt. appointed Menopause Champion shared her four-point action plan. The EHRC will launch employer menopause guidance.
Gender recognition: An ET decided that an employer was liable for harassment for comments made to an employee who had expressed gender critical beliefs. The EHRC provided initial guidance to the govt. 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 (in the specific context of women on public boards in Scotland). The Scottish Parliament’s Gender Recognition Reform Bill was blocked by the UK govt. using powers in the Scotland Act and a legal challenge by the Scottish govt. was unsuccessful. This would have removed current medical certification requirements, and reduced the period that applicants must have lived in their acquired gender to three months.
ESG: most workplace developments in relation to the ‘social’ aspect of ESG have an equality angle and include:
- Workforce reporting: Corporate Sustainability Reporting Standards compliment the EU Corporate Sustainability Reporting Directive which will require large companies to report on their environmental and social impact. Its impact will also be felt outwith the EU because non-EU corporates may have EU connections caught by the CSRD. Disclosures around an organisation’s own workers and workers in its value chain will need to be made and many equality topics will be reportable alongside other material workforce topics. The govt. published guidance on measuring ethnicity pay gaps voluntarily and re-confirmed that it will not proceed with mandatory reporting. The FCA published disclosure expectations for new comply or explain diversity rules for listed companies.
- Board diversity: TheFTSE Women Leaders Review reported that women’s representation on boards of FTSE 350 companies is at 40.2%, up from 9.5% in 2011. The Parker Review reported that in the FTSE 100, 96% of boards included ethnic minority directors by the end of 2022 (compared with 89% in 2021). The review also set new targets and is expanding to include the largest 50 private companies.
- Workforce governance: The FCA and PRA consulted on D&I with the aim of boosting this in the financial sector. The BSI published a new code of practice for employers that provides practical steps for employers to promote D&I in the workplace.
2024
- Changes to Equality Act to codify Brexit case law – 1 January 2024
- Carer’s leave in force – 6 April 2024
- Enhanced redundancy protection for family leave in force – 6 April 2024
- Strengthened harassment laws in force - likely 2024
- Outcome of FCA/ PRA consultations on D&I
- Draft legislation for paternity leave flexibility proposals
- Outcome of gender pay gap regulation review
- Outcome of 2022 consultation on disability workforce reporting
- Outcome of Disability Confident Scheme review (announced in 2021)
- Affected employers to prepare to report under the CSRD and EU Pay Transparency Directive
- Scottish criminal draft legislation creating new offence of ‘public misogynistic harassment’
- Outcome of Scottish govt.’s challenge to the UK govt. blocking of its gender recognition reforms
- Northern Ireland progression of plans to introduce at least 10 days of "safe leave", per leave year, for employees experiencing domestic abuse
- Northern Ireland progression of plans to introduce miscarriage leave and pay
- Draft legislation on NDAs and employer references?
- Neonatal leave and pay - April 2025?
