In The Pipeline - September 2024

Employment

• Changing Terms ("fire and rehire") 18 July 2024 onwards
  • The previous Government introduced a new Code of Practice on the use of "fire and rehire" to change terms of employment, which came into force on 18 July 2024. Where an employer fails to follow the Code, the Employment Tribunal will have the power to increase compensation awarded for any relevant claim by up to 25% (although this uplift does not currently apply to compensation for breach of statutory collective consultation requirements).
  • The new Government has stated that it will strengthen the Code of Practice so that employers will only be able to use "fire and rehire" in limited circumstances. This change is set to be included in the forthcoming Employment Rights Bill, but there is no date for when it is likely to take effect. The current Code of Practice will continue to apply until it is changed or replaced by the new Government.
• Casual/Zero Hours Workers September 2024 (earliest)
  • The previous Government passed legislation to give workers a new right to request a more predictable work pattern, under the Workers (Predictable Terms and Conditions) Act 2023. Employers would have to follow a set process for considering the request and would be able to refuse the request on certain grounds (as with the process for flexible working requests). This new right was expected to come into effect in September 2024 but it appears that it will now be superseded by measures planned by the new Government.
  • The new Government has stated that it will give zero hours workers the right to move onto a regular hours contract (not just the right to request one). The contract would be based on average working hours over the previous 12 weeks. Workers would also have a right to receive notice of shifts, and compensation if shifts are cancelled or curtailed. This change is set to be included in the forthcoming Employment Rights Bill, but there is no confirmed date for when it will come into effect.
• Harassment 26 October 2024
  • The previous Government brought in the Worker Protection (Amendment of Equality Act 2010) Act 2023 which will introduce a new duty on employers to take reasonable steps to prevent sexual harassment at work, with a 25% uplift in compensation where the employer has breached this duty. This will come into force on 26 October 2024.
  • The EHRC is currently consulting on amendments to its technical guidance on harassment at work to reflect the new duty to prevent sexual harassment
  • We have produced a short briefing on the changes and how employers can prepare.
  • The new Government has stated that it plans to strengthen the duty to prevent sexual harassment and to introduce legislation covering third party harassment of employees, but there is no indication of when these changes are likely to take place.
• Unfair Dismissal Rights 2024/2025
  • Employees currently need to have two years' service to qualify for unfair dismissal protection (except for whistleblowing dismissals where there is no qualifying period). The Government plans to remove the qualifying service requirement for all unfair dismissal claims, it has said that probationary periods will be permitted.
  • This change is set to be included in the forthcoming Employment Rights Bill. Although no date has been given for when the change is likely to be made, it could come in quickly as it is a straightforward legislative amendment which it seems will not be subject to prior consultation.
• Unfair Dismissal Compensation and Statutory Redundancy Pay April 2025
  • The annual increases to the maximum compensatory award for unfair dismissal and the maximum amount of a week's pay will take place.
  • The current maximum compensatory award for unfair dismissal is the lower of £115,115 and a year's pay.
  • The current maximum amount of a week's pay (for calculating the unfair dismissal basic award and statutory redundancy pay) is £700.
• Statutory Maternity, Paternity, Adoption and Shared Parental Pay April 2025
  • The weekly rates of statutory maternity, paternity adoption and shared parental pay increase every April. The current weekly rate is £184.03.
• Statutory Sick Pay April 2025
  • The weekly rate of statutory sick pay increases every April. The current weekly rate is £116.75.
• Neonatal Leave and Pay April 2025
  • A new entitlement to up to 12 weeks' neonatal leave and pay for parents of premature babies is to be introduced under the Neonatal Care (Leave and Pay) Act 2023 (which was passed by the previous Government). The new right will apply where a baby starts neonatal care (lasting at least 7 days) within 28 days of being born.
  • This new right is expected to come into effect in around April 2025 (and there is no indication this will be affected by the change of Government).
• National Minimum Wage April 2025
  • The national minimum wage rates increase annually every April. The current hourly rates are:
    • £11.44 for workers aged 21 or over (this rate is referred to as the national living wage)
    • £8.60 for workers aged 18-20
    • £6.40 for apprentices and workers aged 16-17.
  • The new Government plans to revise national minimum wage rates to reflect the cost of living, so the next increase in April 2025 is likely to be higher in relative terms than previous annual increases.
  • In the longer term, the Government plans to extend the national living wage to workers aged 18 or over, but there is no indication of when this change is likely to take place.
• Financial Services Diversity 2025
  • The Financial Conduct Authority (FCA) is consulting on a proposed new regulatory framework on diversity and inclusion in the financial sector.
  • Under the proposals, non-financial misconduct will be incorporated into the FCA's Conduct Rules and such misconduct will be expressly relevant for assessments of fitness and propriety for certified staff and regulatory references.
  • It is proposed that large firms, with 251 or more employees, will also be required to set diversity targets and report annually on certain diversity and inclusion matters.
  • The FCA is expected to publish a policy statement later in 2024, with the new rules coming into force 12 months after that. There is more detail about the proposals in our briefing.
• Employment Status
  • In 2017, the Independent Review of Employment Practices in the Modern Economy (known as the Taylor Review) was published and in response, the previous Government published the Good Work Plan setting out a number of reforms aimed at improving the position of workers. It later published guidance on employment status, and introduced a right for zero hours workers to request a predictable work pattern (see Casual/Zero Hours Workers).
  • The new Government pledged (prior to the general election) to create a single worker status, with all workers having the full range of employment rights including parental leave and unfair dismissal. These proposals will be subject to consultation at a future date.
• Flexible Working
  • The service requirement for the statutory right to request flexible working was removed in April 2024 (under the previous Government), so all employees have the right to request flexible working from day one.
  • The new Government has stated that it intends to make flexible working the default for all roles. In practice this is likely to mean that the circumstances in which flexible working may be refused by an employer would be narrow. This change is set to be included in the forthcoming Employment Rights Bill, but there is no date given for when it is likely to take effect.
  • The new Government also pledged (prior to the election) to introduce a "right to disconnect" alongside the changes to flexible working. This new right is reportedly to be introduced in a code of practice, rather than as part of the Employment Rights Bill.
• Family Leave Rights
  • The new Government intends to remove the one-year service requirement for parental leave, so that it will be a day one right. Parental leave consists of a total of eighteen weeks' unpaid leave per child, up to the child's eighteenth birthday. This change is set to be included in the forthcoming Employment Rights Bill, but no date has been given for when it is likely to come into effect.
  • In the longer term, the new Government intends to
    • review the entire family leave system, which is likely to involve consultation on any proposed changes.
    • introduce a new right to bereavement leave for all workers, and
    • review the new right to unpaid carers' leave (which came into effect in April 2024) and consider whether the right should be paid.
• Maternity Leave and Dismissal
  • Employees who are made redundant during maternity leave must be offered a suitable alternative vacancy if there is one. In April 2024 (under the previous Government) this redundancy protection was extended so that it begins when the employee notifies the employer of the pregnancy and ends 18 months after the birth. Similar redundancy protection applies for 18 months following adoption, and in relation to shared parental leave (subject to a minimum shared parental leave period of at least six weeks).
  • The new Government plans to make it unlawful to dismiss an employee within six months of return from maternity leave (subject to certain exceptions). This change is set to be included in the forthcoming Employment Rights Bill, but there is no date for when the change will come into effect.
• Sex Discrimination and Menopause
  • The previous Government appointed a menopause champion to work on a communications campaign, and the EHRC published guidance for employers on menopause in the workplace.
  • The new Government plans to require employers with more than 250 employees to publish and implement a menopause action plan. There is no date for when this change will take place.
• Pay Gap Reporting
  • The previous Government ruled out introducing ethnicity pay gap reporting, but instead published guidance for employers on voluntary ethnicity pay gap reporting. There was a consultation on disability workforce reporting in 2021 but no response was published.
  • The new Government has stated that it will introduce mandatory ethnicity and disability pay gap reporting for employers with 250 or more employees. In addition, employers will be required to publish a gender pay gap action plan with gender pay gap figures.
  • The new pay gap reporting requirements are to be included in the Employment Rights Bill. There is no date for when the rules will come into force, but it is expected that employers will be given time to prepare before the first reports are required (as was the case with gender pay gap reporting).
• Collective Redundancies
  • Currently, employers must carry out collective consultation with employee representatives where they are making 20 or more redundancies within a 90-day period at a single establishment. In many cases this means that where there are fewer than 20 redundancies at any one site, the collective consultation obligations will not apply.
  • The new Government plans to change the rules so that the 20-redundancy threshold applies to the aggregate total of redundancies across the entire business (rather than by site). No date has been given for when this change will take place, and it may be subject to prior consultation.
    
    
• Collective Bargaining and Industrial Action
  • The new Government is planning to introduce various measures to increase trade union recognition and collective bargaining, including:
    • simplifying the statutory trade union recognition process
    • require employers to inform employees of their rights to join a trade union
    • allow trade union representatives reasonable access to the workplace
    • introducing a fair pay agreement to cover the adult social care sector (which could form the basis for similar agreements in other sectors in the future).
  • It will also become easier for trade unions to call industrial action under plans to allow electronic ballots and removing certain balloting rules introduced by the previous Government (such as the minimum turnout requirement).
  • These changes are to be included in the Employment Rights Bill but there is no date for when they will come into force.
• Enforcement of Employment Rights
  • The current three-month time limit for bringing claims in the Employment Tribunal is to be increased to six months.
  • The new Government will also create a single enforcement body which will have powers to inspect workplaces and bring civil proceedings to uphold employment rights.
  • The timing for these changes has not been specified. Establishment of the single enforcement body is expected to be part of the Employment Rights Bill, but it is not known when its enforcement powers will begin.
• Non-compete Covenants
  • In 2021, the previous Government consulted on proposed changes to non-compete covenants, and in its response stated that it would legislate to limit all non-compete covenants to a three months maximum period. We produced a short briefing on the proposed changes to non-compete covenants.
  • This legislation was not brought forward and there is no indication that the new Government intends to make any changes to the law on post-termination restrictive covenants.

EU Employment Law Developments

Following Brexit, the UK is not required to implement new EU directives, but EU laws will have implications for UK businesses with operations in Europe.

• Whistleblowing December 2021 onwards
  • The EU Whistleblowing Directive introduces various measures to protect whistleblowers, which cover not just employees and workers but also self-employed contractors, former employees and workers, and job applicants.
  • Key features of the Whistleblowing Directive include:
    • Employers with 50 or more staff are required to establish secure internal whistleblowing channels and procedures
    • Employers must provide feedback to whistleblowers within a reasonable time (and a maximum of three months)
    • A whistleblower may choose to report to a regulator without reporting internally to their employer first
    • A whistleblower does not need be acting in good faith or in the public interest to gain protection under the law
  • EU countries were required to implement the Whistleblowing Directive by 17 December 2021 (although private sector employers with 50 to 249 employees had until 17 December 2023 to establish internal whistleblowing channels).
  • The UK already has comprehensive whistleblowing laws in place, but some elements of the directive are wider than UK laws. For example, the directive requires employers to put in place internal whistleblowing channels, and it applies to job applicants and self-employed contractors as well as employers and workers.
• Parents and Carers August 2022 onwards
  • The EU Directive on work-life balance for parents and carers grants new rights including:
    • Ten days of paid leave for fathers or second parents, to be taken around the birth of a child
    • A right to four months' parental leave, of which two months are paid and non-transferable between parents
    • Up to five working days' unpaid leave per year for carers
    • The right for working carers to request flexible working arrangements.
  • EU member states were required to implement the Directive by August 2022.
  • In the UK, employees may take paternity leave and shared parental leave. In April 2024, a new to unpaid carers' leave came into force, and all employees can request flexible working from day one. The new Government plans to review the family leave system and make flexible working the default for all roles (see Family Rights and Flexible Working above).
• Zero Hours and Irregular Hours Workers August 2022 onwards
  • An EU Directive on Transparent and Predictable Working Conditions aims to introduce more certainty for zero hours or irregular hours workers, and includes:
    • A requirement for employers to provide workers who have an unpredictable work pattern with a written statement of the number of guaranteed hours and pay
    • A ban on probationary periods longer than six months (unless justified)
    • A right to request more predictable working conditions after six months
    • A right to compensation if an assignment if cancelled at short notice.
  • EU member states were required to implement the Directive by August 2022.
  • The new UK Government plans to give zero hours workers the right to a regular hours contract and the right to notice of shifts and cancellation compensation (see Casual/Zero Hours Workers above).
• Minimum Wage November 2024
  • The EU Directive on adequate minimum wages requires EU member states to provide an adequate statutory minimum wage, promote collective bargaining and improve enforcement and monitoring.
  • EU member states are required to implement the Directive by 15 November 2024.
  • The UK has had minimum wage laws in place since 1998. The new Government is planning to make some changes to minimum wage rates (see National Minimum Wage above).
• Corporate Sustainability Reporting 2025
  • The Corporate Sustainability Reporting Directive (CSRD) came into force on 5 January 2023. Organisations which are covered by the Directive will be required to report on various ESG matters, including in relation to their workforce and in their value chains.
  • EU member states had to implement the directive by 6 July 2024, and the first reports, for larger organisations already reporting non-financial information, will apply for financial years beginning on or after 1 January 2024.We have produced a briefing on the progress of member states in implementing CSRD.
  • The Directive does not have to be implemented in the UK, but non-EU businesses could have reporting requirements if they have significant business in the EU, and even those not in scope can expect to receive CSRD-related requests for information.
• Equal Pay June 2026
  • The EU Directive on equal pay and pay transparency introduces various measures to improve equal pay enforcement and transparency.
  • Under the Directive, employers with at least 250 employees will be required to publish gender pay gap information annually, and employers with at least 100 employees will have to publish this information every three years.
  • The Directive also introduces measures relating to pay in recruitment and promotion including:
    • A requirement for employers to inform job applicants about the starting salary/pay before interview
    • A ban on asking job candidate about their pay history
    • A right for workers to ask employers for information about pay levels and pay and promotion criteria
  • EU member states are required to implement the Directive by 7 June 2026.
  • UK employers with 250 or more employees have been required to publish annual gender pay gap reports since 2018. The new UK government will require employers to publish a gender pay gap action plan alongside gender pay gap figures (see Pay Gap Reporting) above.
• Board Diversity June 2026
  • A new Directive on improving gender balance among directors of listed companies will require listed companies in the EU to have at least 40% female non-executive directors or at least 33% female executive and non-executive directors, by 30 June 2026.
  • There are voluntary targets for female representation on boards in the UK but no indication that there will be any compulsory targets in the foreseeable future.
• Artificial Intelligence 2026
  • The European Parliament has approved an AI Act to harmonise AI rules across the EU, which would cover AI systems used by employers in the EU. Most of the provisions in the Act are expected to come into force in 2026.
  • Separately, the European Commission has adopted a proposal for a Directive which will introduce liability for damage related to the use of artificial intelligence (AI), which will extend to the use of AI in employment (such as discrimination arising from a recruitment process using AI technology). There is no date yet for when the Directive is likely to be published.
  • The new UK government has pledged to work with workers, trade unions and employers to ensure that there are adequate safeguards for the use of AI in employment.
• Corporate Sustainability Due Diligence 2027
  • The Corporate Sustainability Due Diligence Directive will introduce new due diligence duties for organisations to take active steps to identify and manage adverse human rights and environmental impacts in their operations (including their workforce) and chains of activities.
  • Both EU and non-EU companies with significant EU turnover are covered by the Directive.
  • The Directive is in final form and must be implemented by member states by 26 July 2026. The first compliance deadline for the very largest companies is 26 July 2027, with all in-scope companies needing to comply by 26 July 2029.
  • We have published a briefing on the new Directive and how businesses can prepare.
• Gig Economy "platform workers"
  • A new EU Directive has been proposed to improve working conditions for individuals working through digital labour platforms (such as taxi or food delivery apps).
  • Under the proposed Directive:
    • There would be a list of criteria to decide whether the platform operator is an "employer"
    • Businesses would be required to inform workers of the ways in which they use algorithms for example for monitoring and work allocation
    • Workers would have the right to contest automated decisions and have them rectified
  • There is no date yet for when the Directive is likely to be published.
  • In the UK, the new Government has pledged to create a single worker status which would improve the rights of all workers, including those in the gig economy (see Employment Status above).
• Remote Working In April 2024, the European Commission launched a consultation on possible new EU legislation to ensure fair remote working and the right to disconnect. The consultation closed in June 2024 and the response is awaited.

Immigration

• Immigration Sponsored Work Visa Reforms Ongoing 30 July 2024 onwards
  • The new Home Secretary has provided a written statement confirming the Government's approach to immigration policy in a number of areas. The statement confirms the Government's plans to bring net migration down and reduce reliance on international recruitment.
  • As part of the new approach, the Government has asked the Migration Advisory Committee (MAC) to review the IT and engineering sectors, where reliance on international recruitment is high. The MAC has been asked to report back within a nine-month period, i.e. by May 2025, with potential changes to immigration policy expected to follow thereafter.
  • The MAC is also being strengthened to work with other bodies such as Skills England, the Industrial Strategy Council and the Labour Market Advisory Board, to consider ways of addressing labour market shortages through not only migration but also by addressing local skills shortages.
• Biometric Residence Permits and eVisas By 31 December 2024
  • The Government are slowly replacing physical visa documents (including biometric residence permit ('BRP) and biometric residence card ('BRC')) with an online record of an individual's immigration status (known as an eVisa).
  • These eVisas are already being issued to EU nationals applying for UK immigration status, as well as certain nationalities when they apply for their visas from within the UK. Such applicants are not issued with BRP cards and instead, they are given access to their UK immigration status via an online portal. They are then able to share information on their visa status online with prospective employers, landlords or other relevant third parties to evidence of their right to remain in the UK.
  • This is part of the streamlining and digitisation of the UK's visa system, with a move towards a 'digital by default' border and immigration system.
• Right to Work Checks and eVisas By 31 December 2024
  • The Home Office has indicated it will stop issuing physical BRP and BRC documents to visa applicants from 31 October 2024 as part of the programme to replace these physical documents with eVisas.
  • All BRPs and BRCs being issued currently all have an expiry date of 31 December 2024 indicated on the face of the card, irrespective of the length of visa granted to the applicant. Holders of such documents are now able to register for an online eVisa account which will link to their UK visas.
  • Where an employer has completed an online right to work check and recorded the correct end date of an individual's visa, they are not required to complete repeat right to work checks for individuals who hold BRPs or BRCs with a 31 December 2024 expiry date. However, if the expiry date recorded was 31 December 2024, a follow up online right to work check will be required, to record the full visa duration.
• Electronic Travel Authorisations Ongoing - Phased programme to 2025
  • A new universal 'permission to travel' requirement is gradually being introduced in phases and will require everyone wishing to travel to the UK (except British citizens, Irish citizens and legal residents of Ireland who are travelling to the UK from Ireland, Guernsey, Jersey or the Isle of Man (i.e. the Common Travel Area)) to seek permission in advance unless they hold a UK visa or UK residence status.
  • The Electronic Travel Authorisation (ETA) will be similar to the ESTA system in the United States.
  • The ETA launched for Qatari nationals on 15 November 2023 and in February 2024, it was extended to apply to nationals of Bahrain, Jordan, Kuwait, Oman, United Arab Emirates and Saudi Arabia. The full scheme will continue to be rolled out in phases and is expected to be in place fully by the end of 2024/start of 2025, by which time, any non-British or Irish national coming to the UK for any purpose will need either an ETA or a visa.
• Introduction of European Travel Information and Authorisation System (ETIAS) 10 November 2024 to Summer 2025
  • The EU is introducing a new visa waiver programme (similar to the ESTA programme which applies in the US). Under the new European Travel Information and Authorisation System (ETIAS), all non-EU nationals travelling to the EU will need to apply online or via a mobile app prior to travel.
  • The ETIAS will be launched on 10 November 2024 and will apply to non-EU nationals (including UK nationals) by summer 2025. It will apply to stays of up to 90 days in every 180 days, while longer stays will require a visa. The ETIAS is expected to cost EUR7 and last for three years. It will initially cover all European Economic Area countries (except for Ireland and Cyprus).
  • British citizens do not require visas to visit the EU or Schengen countries, but post-Brexit, they must qualify for entry under the visitor rules, with activities subject to strict limits, including a prohibition against undertaking productive work. Our interactive map shows the rules which apply in different European countries.

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