employment law

New year, new employment law – or is it?

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Chelsea Duke, HR Business Partner

03 January 2024

As 2023 became 2024, two new sets of Regulations came into force: the Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 and the Equality Act 2010 (Amendment) Regulations 2023.  Don’t panic though, none of this is actually that new and it doesn’t mean new obligations for employers, as employers are already working to the principles on which these laws are based.

Both sets of Regulations have been written to bring practises determined by the courts (case law) into legislation (written law), and in some cases, to simplify processes for employers.  The reason they have been introduced now is simply because the most of the principles in question derive from European law or European court decisions and separate regulations implementing Brexit would either have swept away this law or meant that the principles would no longer be binding on employment tribunals decided from now on*.  Thus, the Regulations have been created to avoid instability in the judicial system and uncertainty for employers.  So, all this ‘new law’ is really maintaining the status quo – old wine in new bottles, if you like.

In summary, here are the key points of each of these sets of Regulations.

The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023

Annual leave

For leave years starting on or after 1st April 2024 the Regulations specify that:

  • Workers may carry forward all annual leave untaken due to sickness absence or family leave (e.g. maternity leave, adoption leave etc.) to be taken in the following leave year (or up to 18 months in the case of sickness absence). Leave can also be carried over where the employer has either not provided an opportunity for the employee to take the leave, or has not told the worker that they will lose any leave they haven’t taken
  • Holiday pay must be calculated based on averaging of ‘normal pay’ which includes commission and elements such as regular overtime. The objective of this is to ensure that the employee’s earnings do not drop significantly when they take leave, as this is seen as a disincentive to take holiday
  • Leave entitlement for variable hours and part-year workers (e.g. term time only contracts) may be pro rated for those working less than full time hours. Employers are permitted to calculate leave entitlement by applying an accrual factor of 12.07% of the worked time, and may pay rolled up holiday pay to such workers – meaning that it can be paid as an addition to the hours worked at the time they are worked, providing that the holiday pay is shown separately on the payslip.  This means that for variable hours workers, holiday does not have to be accrued, booked and taken.  This reverses the decision in the Harper Trust v Brazel Supreme Court employment case, and will significantly simplify processes for employers.

TUPE – the Transfer of Undertakings (Protection of Employment) Regulations

Where a business is being sold or service provision transferred and TUPE applies, and the transfer is taking place on or after 1st July 2024, the Regulations provide that:` 

  • employers who do not have recognised employee representatives are permitted to consult directly with employees about a transfer if they either a) employ fewer than 50 people, or b) if the number of people transferring is less than 10. This removes the need to elect employee representatives in small organisations or small transfers.

Working Time Regulations

Removing the requirement for employers to keep detailed records of working time and rest periods for staff working regular hours.  This removes an onerous record keeping requirement, and restates the original legislative position that records are required only to demonstrate compliance with the 48 hour limit on the working week and in relation to obligations to night workers.

The Equality Act 2010 (Amendment) Regulations 2023

These Regulations act to enshrine principles into UK law which employers are already working to as they were set out in key employment court cases, many long-standing.  In the area of discrimination, the Regulations:

  • confirm that discrimination relating to pregnancy, childbirth, maternity or breastfeeding falls under the protected characteristic of sex, and includes any period of occupational maternity leave
  • bring the principle of indirect discrimination by association into UK law. This is where someone who does not have a protected characteristic is subject to the same disadvantage as a result of a provision, criterion of practice (PCP) applied by an employer that someone with the protected characteristic would have had
  • confirm that general statements (such as not wanting to recruit someone with a particular characteristic) are directly discriminatory even if there is no live vacancy and no identifiable ‘victim’
  • establish that a disabled person’s ability to participate effectively in working life equally to a person without a disability is relevant when considering what is ‘normal day to day activity’. So, for example, ability to attend the workplace regularly is likely to be considered normal day to day activity, and therefore if an employee is not able to do this, they may be considered disabled under the Act

In respect of Equal Pay, the Regulations confirm:

  • that equal pay claims may be brought where a) there is a ‘single source’ determining pay for all workers (e.g. a single body which sets pay and terms and conditions – even if those terms and conditions are different between different sets of employees), or b) where a single collective agreement covers all workers even if they are employed by different businesses

The reason for this is that if there is a single body setting the terms for all workers, that body could also restore equal treatment.  This may mean that in some circumstances wholly owned subsidiaries, trading organisations etc. in local authorities are potentially in scope for equal pay claims.  The application of ‘Green Book’ terms and conditions to staff in different local authorities however does not fall under the definition of a single collective agreement, so local government workers cannot compare themselves to workers at a different local authority.

* For more information on the differences between written law (statute, Acts and Regulations) and court-determined law (case law), and the impact of Brexit on European-derived employment law listen to Episode 8, Series 1 of our HR Edit podcast entitled ‘The Retained EU Law (Revocation and Reform Bill) – what could this mean for you?’.

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