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What to expect in employment law in 2024

Posted: 05/01/2024

As we welcome another year, we continue our series of annual articles looking ahead to what the next 12 months will bring for employment law and consider what may lie in store during 2024.

EU law

Although the ‘bonfire’ of EU legislation promised by the government will no longer take place, the Retained EU Law (Revocation and Reform) Act 2023 will still have an impact on UK employment law. In summary, the act gives ministers new powers to reform EU-based legislation that has been introduced into the UK by way of statutory instrument.

As of 31 December 2023, the principle of the supremacy of EU law no longer exists, and UK laws no longer have to be interpreted in line with EU law. This legal uncertainty means that re-litigation of well-established EU-based case law points is expected. However, given the ongoing delays in the employment tribunals, it may take a number of years for these to result in any meaningful change.

Aside from the above, although the outlook for the year is in many ways uncertain, there are a number of developments we can expect to see in early 2024. These include some significant changes to the law relating to holiday pay, particularly for part-year and irregular-hours workers (for details see this previous article).

Family-friendly rights

Changes to the flexible working regime will come into force in April, with new regulations making the right to request a flexible arrangement a ‘day one’ right, and the new Employment Relations (Flexible Working) Act making changes to the requirements for those submitting a request.

Additional protections for women who are pregnant or on maternity leave will also be introduced in April. The draft Maternity Leave, Adoption Leave and Shared Parental Leave (Amendment) Regulations 2024 will extend redundancy protection from pregnancy through to 18 months from the first day of the expected week of childbirth, or the date of the baby’s birth. Similar protections will apply for those on adoption leave or shared parental leave.

While this does not mean that those covered by this additional protection can never be made redundant, it will give them priority to be considered for suitable alternative employment, and employers will need to proceed with caution when considering such employees for redundancy.

In addition, the long-anticipated Carers Act will come into force in April, providing a statutory right to one week's unpaid leave per year for employees providing or arranging care for a dependant with long-term care needs.

Other changes

The Worker Protection (Amendment of Equality Act 2010) Act 2023 is expected to come into force around October 2024. This act will introduce a new duty on employers to take reasonable steps to prevent sexual harassment of their employees, and give employment tribunals the power to uplift sexual harassment compensation by up to 25% where an employer is found to have breached the duty. For further details of this new duty and the steps employers should take to be ready for it, see this previous article.

Changes are also expected to the law relating to non-compete provisions in employment contracts, restricting their length to three months, and to the distribution of tips to workers. Further details of these provisions, and their implementation dates, are awaited.

Possible future developments

Aside from the above, what other areas may prove to be a significant feature of the employment law landscape in 2024?

Artificial intelligence has been a phrase on everyone’s lips, and it will come as no surprise that Collins has named AI the word of 2023, beating ‘nepo baby’, ‘Bazball’, ‘greedflation’ and ‘ULEZ’ (even though a few of them aren’t words). While generative AI may still be some way from replacing us all with robots, its impact on the workplace has already been significant, and there is little doubt that this will continue through 2024 and beyond.

In March, the white paper AI regulation: a pro-innovation approach, laid out the UK government’s framework to regulate AI and highlighted its ‘innovative and iterative’ approach, which has been criticised by some as not being interventionist enough. In contrast to the UK, the European Commission has been working on prescriptive harmonised rules to regulate AI in the EU and, after much work, it was announced in December that provisional agreement on the Artificial Intelligence Act had been reached. The AI Act provides a regulatory framework to classify AI systems based on the perceived level of risk to citizens. However, this approach too has been criticised, with the French president, Emmanuel Macron, warning that the act goes too far and could hamper innovation.

It will be interesting to see how the differing approaches to the regulation of AI are developed – one thing that can be agreed is that there is no time to lose in this incredibly fast-moving sector.

Strikes and industrial action
Once again, strikes and industrial action dominated the news headlines in 2023 as 3.9 million working days were lost to strike action (the most since the 1980s). With fears of a recession looming, and numerous ongoing industrial disputes showing little sign of resolution, industrial action will continue to be a feature of the employment landscape in 2024.

Although in July the High Court upheld the judicial review of the government’s decision to allow agency workers to cover striking employees, in November, undeterred by this setback, the government opened a fresh consultation on repealing the ban on agencies supplying staff during periods of industrial action. It will be interesting to see how this plays out as the year unfolds.

July saw the arrival of the Strikes (Minimum Services Levels) Act 2023. This legislation gives the government the ability to set minimum service levels (MSLs) which must be met in specific services including health, education, fire, transport, border security and nuclear decommissioning. The MSLs will come into force in the relevant sectors when secondary legislation is passed by Parliament, and draft regulations for the rail, ambulance and border security staff services were announced in November. MSLs pose a significant curtailment to the right to strike and have therefore been highly criticised – their implementation is likely to be a significant feature of the industrial relations landscape in 2024.

General election
The political arena continues to be volatile, and with a general election due to be called by January 2025, significant changes in employment law could be on the horizon. As well as repealing the law relating to MSLs, the Labour Party has indicated that, if it is elected, it will radically overhaul employment law, including strengthening workers’ rights by banning zero-hours contracts and overhauling strike legislation. It has also indicated that it may end qualifying periods for rights such as unfair dismissal, sick pay, and parental leave, the first of which would be a seismic change if it were to go ahead. If Labour is elected, we can expect the introduction of an employment bill within its first 100 days of entering office, a piece of legislation which has been hotly anticipated for some years but has failed to materialise.

Restructuring and redundancy
As predicted, restructuring and redundancy continued to feature heavily throughout last year. Economic turbulence continued as the Bank of England increased interest rates 14 times since December 2021. The impact of such consecutive rises naturally increased costs for businesses and, as a result, employers have been restructuring and making redundancies. The financial services sector has seen an increase of over 30% in planned redundancies and three of the Big Four accounting firms announced redundancies and redeployments.

As ever, dismissals can lead to disputes. This is particularly pertinent in an economic downturn where alternative employment is harder to come by. Between September and November, the estimated number of vacancies in the UK fell by 45,000, making this the 17th consecutive period during which vacancies have fallen.

However, the employment tribunals continued to struggle with workloads last year as demand continued, with recent statistics indicating that 470,000 cases remained outstanding at the end of the year. Delays of up to two years have been seen in claims listed for hearing which has made it much harder for afflicted employees to seek justice and simultaneously imposes greater costs on the employers dealing with claims.

In the courts
The Supreme Court’s decision in Mercer v Alternative Future Group Ltd and another is expected following the recent hearing in December. The appeal questioned the extent of employee protection, if any, under the Trade Union and Labour Relations (Consolidation) Act (TULRCA) 1992 from detriment short of dismissal for taking part in or organising industrial action. Given the ongoing strikes and industrial action, this decision on the protection offered by TULRCA will be eagerly awaited by employers, trade unions and workers.

We may then see some development in the law relating to employment contracts and the practice of ‘fire and rehire’ as the Supreme Court prepares to hear the appeal of Union of Shop, Distributive and Allied Workers (USDAW) v Tesco in January. In this case, Tesco’s employment contracts included an enhanced payment known as ‘retained pay’ which was expressed to be a permanent benefit for the length of employment. This remained in place until 2021 when Tesco announced its intention to remove it. The employees who accepted this change were offered a lump sum payment, while those that did not would have their existing employment contracts terminated on notice and would then be offered new contracts without this benefit.

The High Court granted an injunction to prevent Tesco from dismissing and re-engaging its workers in this way; however, this was overturned by the Court of Appeal. On the topic of ‘fire and rehire’, the government’s response to 2023’s consultation on the draft statutory code of practice and a final version of the code, are expected in April 2024.

It is clear that, like the year that preceded it, 2024 will be an intriguing one for all those who have an interest in employment law, with some certain developments on the horizon, and others which may come to fruition as the year progresses. And with a general election on the horizon, and a challenging economic climate, the pace of change in employment law shows no sign of diminishing.

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Penningtons Manches Cooper LLP is a limited liability partnership registered in England and Wales with registered number OC311575 and is authorised and regulated by the Solicitors Regulation Authority under number 419867.

Penningtons Manches Cooper LLP