Review Of Key Employment Law Changes

Céline Winham and Deborah Casale highlights what is new on the legislation books and explores some key areas that employment practitioners should be aware of.of.

Retained EU law

The Retained EU Law (Revocation and Reform) Act 2023 (Retained EU Law Act) came into force on 1 January 2024. Under the Act, EU-derived legislation will be retained unless specifically revoked or amended and, together with retained EU case law, will be known as ‘assimilated law’. It abolishes the principle of supremacy of EU law, meaning that domestic law no longer needs to be interpreted to give effect to EU law where it conflicts. Furthermore, once the relevant provisions are enacted, it will be easier for the UK courts and tribunals to consider whether to depart from assimilated case law; tribunals will be able to refer points of law to the Court of Appeal and Supreme Court to decide whether to depart from previously binding case law.

Holiday pay and entitlement

The Equality Act 2010 (Amendment) Regulations 2023 (ER(A) regs) also came into force on 1 January 2024 and amend the Working Time Regulations 1998 (WTR). The regulations aim to clarify the law on holiday pay and entitlement and codify decisions of the ECJ and UK courts in this area.

‘Irregular hours workers’ and ‘part year workers’

To address the perceived unfairness created by the Supreme Court’s decision in Brazel, the regulations define two new classes of workers: ‘irregular hours workers’ and ‘part year workers’ (reg 15F workers).

For reg 15F workers, whose leave year begins on or after 1 April 2024, the regulations set out a new method of leave accrual. Namely, that leave is to accrue at the rate of 12.07% of the number of hours worked in each pay period, subject to a maximum of 28 days in any leave year. A separate method of accrual is set out for periods of sick or statutory leave. Additionally, and for reg 15F workers only, the regulations permit accrued leave to be paid by way of an uplift to pay at the time of accrual (ie rolled up holiday pay – which had previously been ruled as unlawful), rather than by paying holiday pay in the period when leave is taken. This also takes effect for leave years beginning on or after 1 April 2024.

‘Normal pay’

The ER(A) regs also set out a new definition of ‘normal pay’ for all workers, including commission payments intrinsically linked to the performance of tasks under the contract, payments for professional or personal status relating to length of service, seniority or professional qualifications and other payments, such as overtime payments, which have been regularly paid to the worker in the last 52 weeks.

For reg 15F workers, all accrued holiday entitlement must be paid at the rate of normal pay and therefore include the above. However, for all other workers, the Government has decided not to create a single pot of 5.6 weeks’ annual leave. Instead, it will maintain the two pots of four weeks’ EU-derived annual leave (reg 13) and 1.6 weeks’ domestic leave (reg 13A). Employers must continue to pay EU-derived leave at a worker’s normal rate of pay, but can reduce it to basic pay for the remaining domestic leave.

Right to carry forward leave

For the first time, the regulations also set out when a worker can carry forward leave from one year to another, codifying decisions of the ECJ and UK courts. The categories of carry over include:

• where a worker has been unable to take their leave due to statutory leave or sick leave;
• where an employer fails to recognise a worker’s right to leave or payment for that leave;

• where an employer fails to give the worker a reasonable opportunity to take leave or encourage them to do so; and

• where an employer fails to inform the worker that untaken leave not taken by the end of the leave year which cannot be carried forward will be lost.

For reg 15F workers, the carry forward provisions apply to all of their accrued leave entitlement (subject to the maximum of 28 days). For all other workers, carry over is limited to reg 13 leave (EU derived), save for in the case of statutory leave above which applies to both reg 13 and 13A leave.

Record keeping

The new regulations require employers to keep ‘adequate’ records to demonstrate compliance with the WTR in respect of the maximum working week, working time for young workers, night work, health assessments and the transfer of night work to day work. Although the regulations aim to simplify the law in this area, many practitioners have voiced concern that the new rules create yet further complexity and uncertainty and further litigation looks likely.

TUPE

The ER(A) regs also expand the existing micro business exception, which permits direct consultation with affected employees where there are no appropriate representatives. For TUPE transfers taking place on or after 1 July 2024, the exception shall also apply to businesses with fewer than 50 employees or fewer than 10 employees transferring and where there are no appropriate representatives in place.

Immigration

This month is also set to see a number of significant changes to immigration law, including a tripling in penalties for employing illegal workers and changes to the Skilled Worker visas, aimed at reducing their use. The minimum salary threshold for Skilled Worker visas will rise by almost 50%, from £26,200 to £38,700 per year, or the going rate for the role if higher. Exceptions to this increase include individuals on the Health and Care visa route and those on national pay scales.

Other key reforms coming into force this month which are likely to impact businesses and migrant workers include:

• the spouse/partner visa minimum income will first increase to £29,000 in ‘spring 2024’; to around £34,500 at an unspecified time (likely later in 2024); and finally to around £38,700 ‘in early 2025’;
• the 20% salary discount for roles on the Shortage Occupation List will be eliminated. Instead, a smaller list of shortage roles on an ‘immigration salary list’ will be introduced, maintaining a general threshold discount;
• students will lose the right to bring dependants to the UK, unless enrolled in post-graduate courses designated as essential research;
• care workers will no longer be permitted to bring dependants to the UK and employers seeking to sponsor visas must now be Care Quality Commission (CQC) regulated;
• the Immigration Health Surcharge will see an increase from £624 to £1,035 per year starting in January;
• ·visiting workers will be allowed to work remotely while in the UK, as long as remote work is not the primary purpose of their visit and there are various expansions to permitted activities of visiting professionals;
• the Youth Mobility Scheme (YMS) route will be extended to eligible Uruguayan nationals and the number of allocated places for nationals of Japan and the Republic of Korea will increase; and
• changes to the EU Settlement Scheme (EUSS) will be implemented to prevent a valid EUSS application as a joining family member by individuals with irregular arrivals to the UK, including small boat and illegal entrant arrivals. Visitors in the UK must submit any application to the EUSS as a joining family member within three months of their arrival and limited leave to enter or remain granted under the EUSS may be curtailed.

Key changes to the Equality Act 2010 (EqA)

The Equality Act 2010 (Amendment) Regulations 2023 (EqAA regs) (in force from 1 January 2024) consolidate specific discrimination protections derived from EU case law to ensure that employment tribunals continue to interpret UK equality law in line with decided EU cases. The law is therefore not technically changing, rather the EqA is amended to codify EU discrimination case law that tribunals, and higher courts, have (to date) been factoring into their decision-making processes.

The key amendments are explored in more detail below.

The definition of disability

New wording is inserted to provide that the reference to a person’s ability to carry out normal day-to-day activities is to be taken as including the person’s ability to participate fully and effectively in working life on an equal basis with other workers.

Protection for breastfeeding mothers

Section 13 EqA historically has protected women from direct sex discrimination if they are treated less favourably because they are breastfeeding. However, this right was expressly stated not to apply to discrimination at work. This exclusion has now been removed and, in doing so, clarifies to women that if they are treated less favourably at work because they are breastfeeding, they will be able to bring direct sex discrimination claims against their employers.

Less favourable treatment will now include the failure to undertake a personal risk assessment for a returning mother or failing to provide suitable facilities for her to store and express breast milk. However, these provisions do not appear to translate to a direct right to breastfeed at work – an argument which was previously rejected in the employment tribunal at first instance.

Special treatment for women in connection with maternity and the protected period

Section 13 EqA also has previously allowed women to be given special treatment in connection with ‘pregnancy or childbirth’. The word ‘maternity’ has now been inserted into the relevant provisions to ensure tribunals continue to interpret the law expansively and in line with EU case law, which provides that unfavourable treatment of a woman related to pregnancy or maternity constitutes direct sex discrimination.

Section 18 EqA has prohibited pregnancy and maternity discrimination during the ‘protected period’ (the duration of the pregnancy and any statutory maternity leave) and discrimination where the protected period had ended but the unfavourable treatment stemmed from a decision made during the protected period. Protection did not previously extend, however, where the unfavourable treatment took place after the woman returned to work and could not be related back to a decision made during the protected period. The amendments to the EqA now mean that this type of discrimination will be caught.

Indirect associative discrimination

Section 19 EqA provided that indirect discrimination may occur where A applies to B a provision, criterion or practice that is discriminatory in relation to a relevant protected characteristic of B’s. However, the requirement for B to have the protected characteristic was inconsistent with EU law. The amended wording will allow B to bring a claim, even if they do not share the protected characteristic, provided they can demonstrate that they suffer the same disadvantage.

For example, men with childcare responsibilities, who may now be able to use similar indirect sex discrimination arguments deployed by women looking for family-friendly working arrangements. Furthermore, workers who care for family members who are disabled, may also be able to argue that requiring them to work full-time or office-based, may amount indirect disability discrimination.

Equal pay claims

The EqA sets out that men and women should receive equal pay for equal work. To date, a woman must be able to point to an actual comparator who is employed by the same employer or an associated employer.

Under the Treaty on the Functioning of the European Union, workers do not need to have the same employer. Instead, the test is that their terms and conditions must be attributable to a single source. The EqA will now, therefore, provide that an equal pay comparison can be made where there is a single body that is responsible for setting or continuing the terms on which the worker and comparator are employed.

Conclusion

The changes signal the start of what is set to be a busy year for practitioners. There are many more legislative changes coming up in the calendar for this year, including the right to take carer’s leave; the extension of protection from redundancy for pregnant women and new parents; an increased duty on employers to prevent sexual harassment in the workplace; and a day-one right to request flexible working.

No doubt with a general election on the cards for 2024, we may see further changes in employment law should a Labour Government be elected and deliver on its promises, which include the removal of the two-year qualifying service period for unfair dismissal, removing the distinction between worker and employee status and implementing the right to ‘switch off’.

This article first appeared in ELA Briefing in January and February 2024