Flurry of amendments proposed to employment law legislation

In our recent blog we looked at proposed changes to the law relating to protecting employees from third party harassment.  The government has brought forward a number of additional pieces of draft legislation proposing to make amendments to existing employment law provisions.

The most significant changes are addressed below:

Changes to TUPE and holiday pay issues which would come into effect on 1 January 2024

  • Making clear that if a worker cannot take their statutory annual leave entitlement due to sickness absence or other statutory leave, it can be carried forward to the next holiday year but will expire after 18 months (4 weeks can be carried forward in the case of sickness absence, the full 5.6 weeks in relation to statutory leave).

    However, if an employer fails to recognise that a worker is entitled to paid annual leave, or fails to give workers a reasonable opportunity to take annual leave, or fails to tell them that annual leave not taken will be lost at the end of the year, the carry forward will apply indefinitely (4 weeks only), until such time as these factors no longer apply.

    This could mean a very significant liability building up, and it is important to remember that the right to paid annual leave applies not just to employees, but to consultants, contractors and those referred to as “self employed” if in reality they are “workers” and not genuinely self-employed, in business on their own account.

  • Significant changes are proposed to the calculation of holiday entitlement for “irregular hours workers” – those whose hours are wholly or mostly variable – as well as “part year” (e.g. term time) workers.  Rather than being due the full 5.6 weeks’ annual leave per year, such workers will accrue annual leave entitlement at the end of each pay period, at 12.07% of the hours worked during that pay period.

    The question of what the worker is entitled to be paid for those hours remains complex if pay is variable, but this change will provide some much needed clarity in this difficult area and would effectively overturn the Supreme Court decision in Harpur Trust v Brazel.  There are complex provisions in relation to accrual of annual leave during sick leave or statutory leave. 

  • The draft Regulations also allow “rolled up holiday pay” for irregular hours and part year workers – i.e. that a worker’s hourly rate of pay can be enhanced by 12.07% and paid at the same time as their wages for working these hours.  The employer need not then make a further payment to the worker when the annual leave in question is taken.  This will be a very welcome change for many employers whose workforce work irregular work patterns.  There is also a requirement to pay average holiday pay to the worker during a period of sick leave or statutory leave.
  • Changes to TUPE informing/consulting obligations are proposed for transfers taking effect after 1 July 2024.  At present a transferor must provide information about a proposed transfer to employee representatives, and if applicable must consult with these reps.  The employer must carry out an election of reps if there are none in place already.  That is only disapplied in cases where the employer has fewer than 10 employees in total, in which case the information/ consultation process can simply take place with all affected staff directly.  The draft Regulations propose that election of representatives will not be required if the employer has fewer than 50 employees in total, or if fewer than 10 employees are expected to transfer (whatever the size of the whole workforce).  This is a helpful provision which will mean that employers are less likely to have to undertake a cumbersome election process.

Changes to the Equality Act 2010 also proposed to come into effect from 1 January 2024

  • Discrimination at work which relates to breastfeeding will be unlawful direct sex discrimination (this previously did not apply in relation to employment)

  • Where a provision, criteria, or practice (PCP) of an employer puts people holding a protected characteristic at a particular disadvantage, employees/workers who do not have that protected characteristic, but are placed at essentially the same disadvantage, will be able to claim indirect discrimination, subject to the employer’s ability to justify the PCP.

    So, for example, a policy of not paying bonuses to those with excessive absences could discriminate against people with a disability, but someone with a condition that did not amount to a disability, which caused excessive absence, may also be able to claim discrimination. 

  • It will be unlawful for an employer to make a statement about not wanting to recruit those of a particular protected characteristic, even if there is no recruitment ongoing or planned, and therefore no “victim” of the discrimination

  • The definition of disability would be amended to state that “normal day to day” activities includes the ability to “participate fully and effectively in working life on an equal basis with other workers”

Predictable working patterns

  • Finally, a reminder that as mentioned in our recent newsletter, the Workers (Predictable Terms and Conditions) Act 2023 comes into force in Autumn 2024. This legislation will amend the Employment Rights Act 1996 giving workers and agency workers the right to request a predictable work pattern if they meet certain criteria. The process will be similar to applications for flexible working.    Consultation about a draft Code of Practice is ongoing until January 2024.
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Please contact our team of specialist employment lawyers to discuss any of the above changes.

This update contains general information only and does not constitute legal or other professional advice.

Douglas Strang, Senior Associate: dst@bto.co.uk / 0141 221 8012 / Connect with Douglas on LinkedIn