Employment Law: 2023 round up and changes to look out for in 2024

2023 saw several significant changes in employment law, including some being introduced at very short notice in November/ December to be implemented from January 2024. Here, Paul Ball and Abi Pawlett explore a handful of the most important changes for employers to be aware of as we move into 2024.

New employer duty to prevent sexual harassment

The Worker Protection (Amendment of Equality Act 2010) Act 2023 received royal assent on 26 October 2023 and will come into force in October 2024. This legislation will introduce a new duty on employers to take ‘reasonable steps’ to prevent sexual harassment of their employees.

It will also allow employment tribunals to uplift compensation in successful sexual harassment claims by up to 25% where an employer is found to have breached the new duty to prevent sexual harassment.

While there is no exhaustive list of the steps that employers will need to have taken to comply with the new duty, it is our view that most employers will need to do far more than they are currently doing. Simply having a bullying and harassment policy will not come close enough.

Reasonable steps are likely to include:

formulating and communicating an effective anti-harassment policy;
assessing risk in your organisation and taking steps to minimise it;
engaging with and training staff about the organisation’s approach to sexual harassment on an ongoing basis;
making sure people know how to report sexual harassment; and
dealing effectively with complaints.

We consider this piece of legislation will be one of the most significant pieces of employment legislation (in terms of impact in the workplace) in the last 20 years or so. Therefore, employers should be proactive and prioritise this before October 2024.

Claims regarding underpayment of holiday pay likely to be worth more

The Supreme Court’s recent decision in Chief Constable of the Police Service of NI and others v Agnew means that in claims for unlawful deduction from wages under the Employment Rights Act 1996 employees have more scope to link back a previous series of underpayments of holiday pay.

Agnew established that it is a matter of fact for the employment tribunal to determine whether or not any given underpayment of holiday pay can or cannot be linked to any previous or subsequent underpayment, but crucially that underpayments of holiday pay can be linked even where there is a gap of more than three months between any underpayment.

This means that any claim in respect of underpaid holiday pay can potentially go back to up to two years’ worth of underpayments (N.B. this limit does not apply in Northern Ireland, where claims could potentially be made in relation to underpayments going back to the commencement of employment or 1998 when the Working Time Regulations were introduced) even if there were gaps of more than three months between any underpayment.

The likely effect of this judgment is that we’ll see more holiday pay claims which will potentially be worth more.

Changes to TUPE, holiday pay calculations and entitlement, and WTR record-keeping

In November 2023, the Government published the draft Employment Rights (Amendment, Revocation and Transitional Provisions) Regulations 2023. The Regulations mean that:

from 1 January 2024, the need for employers to keep a record of workers’ daily working hours is removed;
from the commencement of the next annual leave year starting on/ after 1 April 2024, employers will be allowed to use an annual leave accrual method of 12.07% of hours worked for irregular hours workers* and part-year workers*;
employers will also be allowed to use rolled up holiday pay. This will be introduced for irregular hours workers and part year workers* (including some agency workers);
employers will be able to pay workers for holiday by enhancing their regular pay (by at least 12.07%) instead of having to calculate holiday pay and pay it each time a worker takes holiday (N.B. this change will not apply to full time workers); and
TUPE – the consultation requirements will change to allow small businesses (with fewer than 50 employees) and businesses of any size undertaking a small transfer (with fewer than 10 employees) to consult directly with their employees if there are no existing worker representatives in place.

* The Government proposes to provide additional commentary to clarify what these terms mean.

Equality Act 2010 (EqA) amendments

The Equality Act 2010 (Amendment) Regulations 2023 will amend the EqA to reproduce in domestic law certain discrimination protections derived from EU law and will come into force on 1 January 2024. Under the Equality Act 2010 (Amendment) Regulations 2023:

there will still be a ‘single source’ test for establishing an equal pay comparison;
the right to claim indirect discrimination by association is to be included in the legislation; and
the definition of disability will take into account a person’s ability to participate in working life on an equal basis with other workers.

It is worth noting that the codified introduction of indirect associative discrimination could be used against employers in some situations.

According to the 2021 Census results there were around 2.5 million unpaid carers in employment, so there is a high degree of probability that any given employer will have employees who fall into this category and who may therefore need to make requests for flexible working. Where this happens, an employer who rejects the request without being able to objectively justify it will be more at risk of losing a discrimination by association claim that may be brought.

Increased protection from redundancy for pregnant employees

The Maternity Leave, Adoption Leave and Shared Parental Leave (Amendment) Regulations 2024 extends the special protection given to employees who take maternity or other statutory family leave. It extends the right for pregnant employees to be offered first access to suitable alternative employment in a redundancy situation when:

they are in the ‘protected period of pregnancy’;
they have recently suffered a miscarriage; and
they return from maternity, adoption and shared parental leave.

The redundancy protection during pregnancy will start when an employee tells their employer about the pregnancy. The ‘protected period’ will then continue for the period of 18 months from the start of the maternity leave period.

The new additional protection period will apply where the statutory leave ends on or after 6 April 2024.

In relation to shared parental leave, the protection will apply where the employee has taken at least six weeks of leave after 6 April 2024.

Conclusion

After what’s been a very interesting year of developments in employment law in 2023, we will continue to provide legal updates on any new changes that will come into force in 2024 and look forward to supporting and advising our clients on what should be done to ensure compliance with these, and all other, changes.

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