What’s happening in UK employment law in 2024?

Last year saw the government make major decisions about post-Brexit employment reform and back an unusually high number of private members’ bills. The combined result is a significant amount of employment law reform in 2024. In this article, we look at what’s changing, share our pick of the key cases to watch out for, and flag what might be in store under an incoming Labour government.

First up: key post-Brexit employment law changes happening from 1 January

Some important post-Brexit reforms took effect on 1 January 2024. This is the result of the Retained EU Law (Revocation and Reform) Act which finally passed last year, ending the supremacy of EU law over UK law from 1 January 2024 and giving the government new powers to reform EU-based employment laws. Importantly, key EU caselaw decisions concerning holiday pay and non-discrimination are being written into UK legislation to ensure that their effects are preserved. From 1 January 2024:

• New laws on holiday entitlement and pay come into effect, requiring employers to maintain full normal pay levels for at least four weeks of an individual’s holiday entitlement and allowing workers to carry forward unused holiday entitlement in certain circumstances. If you pay overtime, commission or other allowances to your workers, you should check that you are factoring this into their holiday pay as required. You should also make sure that you are reminding workers about the need to use up their holiday entitlement within the holiday year.
• Regulations amending the Equality Act 2010 also take effect. These are designed to preserve the effects of certain EU caselaw but (in some instances) look more like new law in practice because they involve EU caselaw that had not actually been applied by the UK appeal courts. Employers do not need to take any particular action as a result of these changes, but should be aware of the widened scope for claims in some areas (such as indirect discrimination, recruitment and workplace breastfeeding), and keep an eye on future caselaw developments.

By contrast, the government has taken some (relatively modest) steps to do away with EU caselaw on TUPE consultation obligations and working time record keeping obligations.

Taken in the round, these post-Brexit changes to UK employment law do not add up to anything like the bonfire of EU employment rights that some people were worried about last year. There may be more change on the horizon, however. The meaning of certain UK laws will also become less certain from 1 January 2024 when EU supremacy ends and EU legal principles cease to apply. UK laws no longer need to be interpreted in line with EU requirements and EU-based caselaw is no longer the reliable authority it once was. In practice, this means that any grey areas in EU-derived UK law are now open to re-litigation. Employers should watch out for new caselaw and, if involved in new tribunal litigation, consider if new points relating to EU-derived law could be argued.

What else is happening in early 2024?

Moving to a different topic entirely, a draft Code of Practice on ‘fire and rehire’ was introduced in 2023, in response to heightened attention on this practice. The final version is expected to be published early in 2024 so watch out for this if you are looking to change contractual terms imminently.

Employment law changes happening in April 2024

April is traditionally the month when most employment law changes take effect, and this year there’s a lot happening.

On 1 April 2024, the National Living Wage will jump to £11.44 per hour (up from £10.42). This will be the largest ever increase in the minimum wage in cash terms and the first time it has increased by more than £1. It will narrow the gap between the legal minimum and the so-called ‘real’ living wage, namely what people really need to live on, taking account of the cost of living (currently £12 per hour outside of London, according to the Living Wage Foundation). It has also been proposed (although not yet confirmed by the government) that the rates of statutory pay for family leave including statutory maternity, paternity, adoption and shared parental leave will increase from £172.48 to £184.03 per week, and statutory sick pay will increase from £109.40 to £116.75 per week.

From 1 April 2024, there will also be a new holiday system for workers with irregular hours or who work part of the year. The rules apply to holiday years starting from 1 April 2024, so you may not be impacted immediately depending on when your holiday year starts. For example, if you operate a calendar holiday year then the new rules won’t apply to you until January 2025. Under the new system (explained in more detail here) workers with irregular hours or who work part of the year will accrue holiday entitlement at the end of each pay period at the rate of 12.07% of hours worked, and can be paid holiday pay on a rolled-up basis (i.e. by way of a supplement to basic pay) if the employer chooses. If you engage these types of workers, these changes are significant, and you should think about taking legal advice on updating your approach.

On 6 April 2024, workers will be able to ask for flexible working from day 1 of employment (instead of having to complete 6 months of employment before putting in a request). This change is expected to be introduced alongside other more limited flexible working reforms. It may raise the prominence of the right to request flexible working at a time when some employers are taking a tougher approach to office attendance, but ultimately the changes are limited: whether to accept or decline a request remains in the hands of the employer.

On 6 April 2024, the new right to carer’s leave also comes into effect. From this date, employees will have a new statutory right to a week’s unpaid leave to care for a dependent. Whatever the size or nature of your business, you are likely to employ some workers with caring responsibilities even if they have not previously disclosed that they are a carer. You will need to think about updating or creating new policies, introduce a system of record-keeping to track the number of days taken and ensure that people managers are aware of this new right.

From the same date, employees who are pregnant or returning from maternity, adoption or shared parental leave will gain priority status for redeployment opportunities in a redundancy situation. The changes will materially increase the numbers of employees with protection (for example, fathers taking just 6 weeks’ of shared parental leave will become eligible for 18 months of protection). If you are considering or planning restructuring in 2024, you will need to think through the implications of the new protections and the practical issues that may arise.

Also in April 2024, the government is expected to make minor changes to paternity leave. This will allow paternity leave to be taken at any time in the first year and to be split up into two separate blocks of one week. The current six-month qualifying period, overall limit of two weeks’ leave and low levels of statutory payment will continue, however, so this does not make paternity leave into a much bigger right.

Key employment law changes happening from May 2024 onwards

Looking ahead to the remainder of the year, there continues to be a lot of legislative change.

The long-awaited new law on fair distribution of tips seems likely to come into effect on 1 July 2024, impacting employers in the hospitality sector.

A new statutory right to request a predictable working pattern is also due to come into force in around September 2024, giving all workers the right to request a more predictable contract and requiring employers to put new processes in place for handling those requests. While the new right appears to apply to a wide range of workers, employers will retain the right to reject requests.

Importantly, on 26 October 2024, the Worker Protection Act comes into effect, requiring employers to take proactive steps to prevent their employees from being sexually harassed at work. Ahead of the October commencement date, the Equality and Human Rights Commission will be publishing new guidance or a new Code of Practice on what proactive steps employers are expected to take. What the EHRC say (whether in new guidance or a new Code) will be critical in setting the bar for employers. That bar has gone up in a post #metoo world, so all employers need to pay close attention to this development.

At some point during 2024, the government is expected to pass its Data Protection and Digital Information Bill, which aims to maintain data protection adequacy with the EU while relaxing a few areas that may benefit employers, including a less expansive definition of personal data and a new ability to ignore vexatious or excessive data subject access requests.

A new right to neonatal leave is also on the way. The government has indicated that this will not take effect until April 2025 but it could potentially happen sooner.

What else? The 2022/3 parliament was unusual in that the government chose not to launch its own employment bill and set about backing a series of bills sponsored by backbench MPs instead. That’s one of the key reasons why we are seeing so many new rights being introduced this year. Is the government now going to make a habit of backing new private members’ bills? If so, one of the contenders could be the bill being put forward by Conservative MP Nickie Aiken MP to introduce a statutory right to time off for fertility treatment (which is a topic that some employers are paying more attention to).

What about non-competes? Things have all gone rather quiet on that front. In 2023, the government announced that it would be capping the length of post-employment non-compete clauses at three months. With no mention of legislation to achieve this in the recent opening of the UK parliament, however, it is now unclear if this will go ahead.

Impact of general election in 2024?

With the next UK general election widely expected in Autumn 2024, and the Labour Party leading in the polls, a 2024 Labour victory seems likely. The employment law landscape under a Labour government could look very different. Headline proposals include:

• a right not to be unfairly dismissed from the first day of employment (scrapping the current two-year qualifying period);
• a move to a simple two-part framework for employment status (abolishing the three categories we have now);
• a ban on zero-hours contracts;
• strengthened trade union rights including a right of entry to workplaces;
• further strengthening of harassment laws; and
• the introduction of ethnicity and disability pay gap reporting.

If elected, Labour has promised an employment rights bill to introduce reforms within the first 100 days. It’s unlikely that most reforms would actually take effect that quickly, but we are certainly highly likely to see election manifestos published in 2024, and that’s the point when employers will want to start thinking about preparing for the changes.

Employment caselaw decisions to expect in 2024

There are plenty of employment cases to look out for in 2024, including:

• Manjang v Uber Eats – on facial recognition software. Is it race discrimination to use facial recognition software to verify the identity of platform workers? This is a high-profile and union-backed claim currently going through the employment tribunal process.
• Mercer - on strikes. What can employers do in response to strikes apart from deduct pay for strike days? What measures short of dismissal are legitimate? The Supreme Court heard this case in December 2023 and a ruling is expected this year.
• Bathgate v Technip – on settlement agreements. Can you negotiate a deal with an employee to settle a future claim which hasn’t arisen yet? This case was heard by the Inner House of the Scottish Court of Session in November 2023, and a ruling is expected this year.

What to expect in employment law in Northern Ireland?

If you have employees in Northern Ireland then it’s important to be aware of the increasing divergence between Northern Ireland and the rest of UK as regards employment law. The differences between these two legal regimes look set to widen further as the changes explained above will not necessarily all apply in Northern Ireland. For more details, you can read our article on what to expect in employment law in Northern Ireland in 2024. Our lawyers in Belfast can help you with navigating the Northern Irish employment law landscape.

What’s happening in immigration law in 2024?

There’s also a lot happening in immigration law in 2024, including the tripling of fines for employing people who do not have the right to work. For more details, see this article from our immigration experts. 

In summary: a year of employment law change and challenge

2024 looks set to be a year of significant change to employment legislation. This comes as employers are facing a range of other employment challenges, including enforcing stricter return to office policies, managing conflicting viewpoints amid the so-called ‘culture wars’ and trying to stay on top of the developments in AI. A Labour victory could also mark the start of the biggest employment law shake-up for many years. Our lawyers and specialist training team are here to support you with navigating these developments and staying on top of the changes.