May 29, 2024

Employment law develops rapidly to reflect Government priorities and tribunal activity, but employers are currently experiencing an increasing number of employment law changes and challenges impacting their businesses.

Here are some of the more significant issues that you and your teams should be aware of, both current and future.

Holiday pay

Harpur Trust v Brazel clarified the position on how holiday pay for irregular workers on permanent contracts should be calculated. The change only impacts workers with no normal working hours and who are paid on an hourly or daily basis.  

So, what does this mean? Basically, employers can no longer calculate holiday pay for workers with irregular working patterns using the 12.07 per cent method.

For permanent workers with irregular hours, you must calculate holiday pay by looking at the work they have undertaken across a 52-week reference period, discounting the weeks in which they did not receive any pay. You then need to calculate their average week’s pay across the 52-week period and multiply it by the 5.6 weeks’ annual leave entitlement.

It is worth reviewing your current holiday practices to ensure they comply with the judgment. You may also need to amend contracts of employment and payroll processes.

>See also: What are the new rules on calculating holiday pay for seasonal workers?

Employment status

The Government has currently decided not to legislate on employment status but has issued helpful non-statutory guidance on this fast-moving area. This provides advice on the differences between employees, limb (b) workers and those who are self-employed (including a table of rights that attach to each), as well as an explanation of the key factors in determining status. 

It also looks at some of the more difficult issues or developments in this area, such as those associated with gig economy workers, zero hours workers, freelancers, interns and employee shareholders. So, if you need a bit of clarity in this area, the guidance is well worth exploring.

>See also: Zero hours contracts advantages and disadvantages

Fire and rehire

This has been in the news again. The Government will be publishing a new Statutory Code of Practice to clamp down on controversial tactics used by employers who fail to engage in meaningful consultations with employees and instead terminate contracts and offer to re-engage employees on new terms.

As a Statutory Code, tribunals and courts would be required to take it into account when considering relevant cases, including those for unfair dismissal. A tribunal would then be able to apply an uplift of up to 25 per cent to an employee’s compensation where their employer unreasonably fails to follow it.

Parents and carers rights

The long-awaited Neonatal Care (Leave and Pay) Act 2022 will give parents whose babies need hospital neonatal care 12 weeks of paid leave in addition to their statutory maternity or paternity leave. This has not yet come into force – realistically we’re looking at 2024. It will be available from day one of employment and apply to parents whose babies are admitted to hospital for seven or more days in the first month of their lives.

Similarly, The Carer’s Leave Bill will change the current right for parents to 18 weeks of unpaid parental leave for each child up to 18, by introducing a new entitlement available to any carer to take up to one week of unpaid leave each year to provide or arrange care for a dependant with a long-term care need. This is regardless of length of service. Carers won’t be required to show how or for whom it will be used.

Menopause rights

The Government has also now outlined its policy on menopause and employment. This includes the creation of a menopause taskforce to ensure the issue is prioritised in public policy on inclusion and diversity at work and the appointment of Government ‘menopause employment champions.’

Rooney v Leicester City Council saw the first binding decision related to menopause discrimination, with the Employment Appeal Tribunal holding that it was wrong to find that an employee suffering from significant menopausal symptoms was not disabled under the Equality Act 2010 (EQA).

As an employer, there are easy wins in this area. Train managers to signpost and support, make reasonable adjustments to working conditions and produce a relevant menopause policy for your employees.

Reporting thresholds

The business threshold for any future reporting regulations has doubled from 250 employees to 500 employees. This includes gender pay and executive pay ratio reporting regulations, but not ethnicity reporting, which the Government has decided will not be made compulsory.

More reporting requirements came in with the new Modern Slavery Bill, aimed at strengthening the protection and support for victims of human trafficking and modern slavery, particularly through increasing the accountability of organisations to their supply chains. The Bill strengthens the requirements on companies with an annual turnover of at least £36m to publish more rigorous annual reports and introduces a single reporting deadline and a mandated format. There will also be penalties for non-compliance, resulting in a key change to legislation which has previously been described as ‘toothless’.

Immigration

New digital ‘right to work’ checks, using ID validation technology became available for employees with valid British or Irish passports from April 6, 2022. The changes mean that employers will now need to either:

  • Carry out a manual check by physically meeting with the employee to check and copy their original documentation.
  • Appoint an Identity Service Provider to check the passport of the employee on their behalf or carry out the check themselves using ID document validation technology.

>See also: Businesses must pay for digital ID checking from April

Tipping

The Employment (Allocation of Tips) Bill, likely to benefit more than two million workers, has passed the Committee stage. The key points are that tips may not be withheld from staff and a new statutory Code of Practice on how tips should be distributed will be developed. Employers will be required to have a written policy on tipping and keep a written record of their tipping practice. They will also have to give their workers the right to ask questions and demand information about their tipping records.

The Employment Bill

The long-promised Employment Bill will potentially be very wide reaching but is still a work in progress. It will act as a single enforcement agency for employment rights and is likely to include extended redundancy protection and a right to request a ‘predictable and stable contract’ after 26 weeks.

Retained EU Law (Revocation and Reform) Bill

The government is currently grappling with the December 31, 2023 deadline imposed by the Bill to amend, repeal and replace current EU law that is still in force in the UK. With some 2400 UK regulations across 21 Government departments, this deadline is not going to be possible to achieve and is likely to be pushed back.

EU law had far-reaching impact and effect on employment law in the UK, so employers would be well advised to keep an eye on the Government’s REUL dashboard which is updated quarterly and records where EU-derived legislation remains and where legislation has been amended, repealed or replaced.

Further reading

What owners should put in an employment contract

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