Key employment law updates | November 2023

Government announces proposed changes to holiday entitlement and pay

The Government has recently published its highly anticipated response to the consultation relating to holiday entitlement and the consultation on reforms to retained EU employment law.

The headline proposal is that from 1 January 2024 employers will be allowed to use the accrual method of 12.07% of hours worked to calculate holiday pay for casual, irregular hours and part-year workers. This "rolled-up" holiday pay enables certain workers to receive an additional amount or enhancement to their regular pay instead of being paid when they take annual leave. It is important that employers check whether a worker falls under this approach before simply adopting rolled-up holiday pay. See our recent article for further details.

In addition, the Government proposes:

Record keeping: To legislate to clarify that businesses do not have to keep a record of all daily working hours of all their workers if they are able to demonstrate compliance with the Working Time Regulations without doing so. The draft Regulations confirm that employers can create, maintain, and keep records in a way which they reasonably see fit. The Government will also re-publish guidance alongside these changes.

"Normal rate of pay" calculations: To legislate to set out the types of payment that should be included when calculating a worker's "normal rate of pay". This will be reflective of existing case law but will provide legislative clarity.

Covid-19 carry over regulations: Repeal covid-19 regulations so that from 1 January 2024 workers can no longer accrue covid-19 carryover leave, however they will still be able to use all leave accrued prior to 1 January 2024 on or before 31st March 2024. Workers whose employment terminates on or before the 31st March 2024 will be able to claim any pay in lieu for any remaining entitlement that they were unable to use due to coronavirus.

TUPE: To proceed with reforms to TUPE to allow small businesses (with fewer than 50 employees) undertaking a transfer of any size, and businesses of any size undertaking a small transfer (of fewer than 10 employees) to consult directly with their employees if there are no existing worker representatives in place.

The Government's full response can be found on its website.

HMCTS to make audio recordings of all employment tribunal hearings from 20 November 2023

The Presidents of the Employment Tribunals in England and Wales and in Scotland have published a joint Practice Direction and Presidential Guidance on the recording and transcribing of employment tribunals hearings.

Subject to several exceptions, audio recordings will be made where the technical facility exists to do so and where such recordings can be securely retained. Where an audio recording has been made, it will constitute the record of proceedings. The recording will only be used in limited circumstances, including by a tribunal when preparing its judgment or for any purpose connected to the performance of their judicial duties.

To minimise the risk of misuse, only in limited circumstances will a party or representative be permitted to listen to all or part of an audio recording of a hearing. However, transcripts can be requested by those who participated in the hearing along with the press or public, but this will generally be at the requester's own expense.

ACAS launches consultation on a draft Code of Practice on handling requests for a predictable working pattern

Acas have launched a consultation on a draft Code of Practice they have published on handling requests for a predictable working pattern. The consultation has been launched to ensure that the Code can be understood easily to effectively support compliance with the law and guide good practice in the workplace.

The consultation is open until 17 January 2024. The draft Code of Practice and further details on the consultation can be found on the Acas website.

Government publishes menopause and employment policy paper

The Government has recently published a policy paper providing an update on the work of the Menopause Employment Champion.

The policy paper includes details on the Menopause Employment Champion's Four Point Plan to improve menopause support in the workplace. Key to the plan is the establishment of a repository of menopause resources and guidance for employers and employees, which can be found on the Government's Help to Grow website.

PRA and FCA publish joint policy statement confirming removal of bankers' bonus cap

The joint policy statement confirms the removal of the current limits on the ratio between fixed and variable pay and related provisions on shareholder approval and discount rates.

The changes are relevant for banks, building societies, and PRA-designated investment firms, including third-country branches that are subject to the Remuneration Part of the PRA Rulebook and to the FCA SYSC 19D: Dual-regulated firms Remuneration Code. The changes have been implemented swiftly since publication of the policy statement, taking effect from 31 October 2023.

Draft Equality Act 2010 (Amendment) Regulations 2023 laid before Parliament

Whilst the draft regulations amend the Equality Act 2010, they reflect existing EU-derived discrimination protections and accordingly do not change the overall effect of the law. The draft regulations are intended to safeguard and enshrine these EU-derived protections into UK legislation.

Immigration cost and fine increases happening in January 2024

From 16 January 2024, the increase to the Immigration Health Surcharge (IHS) will be effective, meaning that children, students, and Youth Mobility Scheme applicants will have to pay £776 per year (instead of £470) and adults will have to pay £1,035 per year (instead of £624). In adults, this represents a 66% increase. The IHS is an upfront fee, levied on most UK visa applicants, so that they can gain free access to the NHS and medical treatment during their stay in the UK. Visa applicants are encouraged to submit their applications before 15 January 2024, to benefit from the current rates, where possible.

In addition, a new draft Code of Practice on the civil penalty scheme for employers (preventing illegal working) has been published, which will apply to all right to work checks from 22 January 2024, including where a follow-up check is required to maintain a statutory excuse, even if the initial check was undertaken using the previous version of the code which was current at the time.

The civil penalty for each illegal worker will rise from £15,000 to £45,000 (if there are no previous breaches in the last 3 years) and £20,000 to £60,000 for repeated breaches. That is tripling the fine. It is therefore important that employers review their right to work policies to ensure adequate compliance, in accordance with the latest guidance and train their staff appropriately. Please see our podcast and article for more information.

Autumn Statement: National Minimum & Living Wage increases, call for evidence on lifetime pensions provider model and immigration changes  

The Chancellor has now published the Autumn Statement 2023, with several key employment and immigration updates:

National Minimum & Living Wage – From 1 April 2024 the National Living Wage (NLW) will increase to £11.44 for workers in the UK, an increase of nearly 10%. In addition, the National Living Wage will now be applicable to workers aged 21 and over, where previously it was only applicable to those aged 23 years and over.

The National Minimum Wage (NMW) will also be increased for younger workers as below:

• 18 - 20: £8.60
• 16 - 17 and apprentices: £6.40

Pensions: The government is launching a call for evidence on a lifetime provider model which would allow individuals to have contributions paid into their existing pension scheme when they change employer. This could potentially mean a new right for employees to request new employers pay into an existing pension pot, rather than having to sign up to a different pension scheme run by their new employer.

Immigration: From January 2024, reforms will be introduced to simplify and expand the business visitor visa route, with further improvements expected later that year. Jeremy Hunt announced that the business visitor route will include expanding and clarifying the intra-corporate activities, simplifying arrangements for those on paid engagements and including greater provision for the legal services sector. Hunt also delivered new and expanded agreements for 2024 with Japan and South Korea due to come under the Youth Mobility Scheme route. The political decision is to focus on short-term visas which 'do not impact on the overall level of net migration' with the upcoming General Election next year.