This is our selection of recent developments which we think will impact on HR practice.
Holiday entitlements and pay; TUPE: Legislation changes
Discrimination: Legislation changes
Discrimination: Philosophical belief
Other recent developments
Women’s health: Menopause and the workplace
1. Holiday entitlements and pay; TUPE: Legislation changes
Following consultations this year on proposed changes to the Working Time Regulations (WTR) and TUPE, the government has published draft amending regulations.
Irregular hours workers and part-year workers: New rules for calculating holiday pay will apply for part-year and irregular hours workers, for holiday years from 1 April 2024:
- Rolled-up holiday pay – where workers receive an additional amount or enhancement to their normal pay to cover their holiday entitlement – will be allowed for these workers if:
- Holiday pay is calculated at 12.07% of all pay for work done
- The 12.07% element is paid at the same time as pay for the work done
- The worker’s holiday pay is itemised separately in their payslip
- New accrual system – these workers will accrue annual leave entitlement on the last day of each pay period at the rate of 12.07% of the number of hours they have worked during that pay period, subject to a maximum of 28 days per year. This new provision has been introduced in response to last year’s Supreme Court decision in Harpur Trust v Brazel in which it was held that, under the WTR, holiday entitlement for permanent part-year workers should not be pro-rated so that it’s proportionate to that of a full-time worker.
Recording working time: Employers will be required to keep ‘adequate’ records, instead of a full record of the daily working hours of their workforce.
Holiday pay and normal remuneration: The government has decided not to proceed with its proposal to merge the four weeks’ EU-derived statutory leave with the additional 1.6 weeks’ leave entitlement under UK law. So workers will continue to have a minimum entitlement to four weeks’ leave at normal pay and 1.6 weeks’ leave at basic pay.
The new regulations clarify that the following should be included in normal remuneration for the four weeks’ leave:
- Payments, including commission, intrinsically linked to the performance of tasks which a worker is contractually obliged to carry out
- Payments for professional or personal status relating to length of service, seniority or professional qualifications
- Payments, such as overtime payments, which have been regularly paid to the worker in the previous 52 weeks
Holiday carry-over: The new regulations intend to restate current EU principles on carrying forward untaken holiday in certain situations, including where workers are unable to take holiday due to being on family leave or sickness.
Holiday accrual: The government’s proposal to change the way that a worker’s leave is calculated in the first year of employment has been dropped.
TUPE consultation: The government has also confirmed that it will proceed with its planned TUPE reforms, which will apply to TUPE transfers taking place on or after 1 July 2024. Employers that do not already have worker representatives in place will be able to consult directly with employees for consultation on a TUPE transfer, if:
- The business has fewer than 50 employees
- The proposed transfer involves fewer than 10 employees
Employers should review their holiday pay practices and policies, and contracts, and consider whether changes are needed to comply with the new rules.
2. Discrimination: Legislation changes
Upcoming discrimination legislation changes will see changes to the Equality Act 2010 and a new duty to prevent sexual harassment.
The UK government has published draft regulations which aim to preserve discrimination protections which would otherwise have disappeared at the end of this year due to Brexit. This includes:
- The right to claim indirect discrimination by association – this covers a situation where a person does not share a protected characteristic themselves (e.g. a disability) but suffers the same disadvantage as those who do have that characteristic because of an employer’s provision, criterion or practice, due to their association with someone with the protected characteristic (eg. an employee caring for a disabled relative)
- Amending guidance on the definition of disability to take into account a person’s ability to participate in working life on an equal basis with other workers
- A ‘single source’ test for establishing an equal pay comparator – this means an equal pay comparator can potentially work for a different business so long as the body responsible for setting terms is the same
- Protections that prevent women from experiencing less favourable treatment at work because they are breastfeeding
- An extension of direct discrimination protection to cover discriminatory statements made about not wanting to recruit people with certain protected characteristics even where there is no active recruitment process ongoing and no identifiable victim.
The regulations will come into effect from 1 January 2024.
New legislation has been passed which will introduce a duty for all employers to take reasonable steps to prevent sexual harassment of their employees in the course of their employment. The new duty will come into force in October 2024.
If an employer breaches the duty, it could potentially face:
- Enforcement action by the Equality and Human Rights Commission (EHRC), and/or
- An uplift of up to 25% in any compensation awarded if a tribunal finds that an employee has been subjected to sexual harassment and the employer failed to take reasonable steps to prevent that harassment.
The EHRC’s technical guidance on sexual harassment and harassment at work will be updated to reflect the new duty and to set out the steps that employers should take to comply with it.
Employers should review their policies, procedures and training programmes to ensure that they are taking sufficient steps to meet the new duty to prevent sexual harassment.
3. Discrimination: Philosophical belief
An employment tribunal has ruled that an employee’s opposition to critical race theory was a protected belief under the Equality Act.
Mr Corby, a senior mediator for ACAS, posted on Yammer (a private workplace communications platform) that the “woke” or “critical theory” approach to racism is misconceived in that its belief in structural racism is divisive because it sees white people as a problem. He believed the better approach is that of Martin Luther King which desires a society where people are judged by their character rather than the colour of their skin, and which emphasises what people of all races have in common. ACAS dismissed complaints by some of Mr Corby’s colleagues, including questioning his right to be employed by Acas, but instructed him to remove the posts which criticised the Black Lives Matter movement as some employees had found them offensive. Mr Corby subsequently brought a claim for unlawful belief discrimination.
An employment tribunal has held that his opposition to the critical race theory was a protected belief under the Equality Act 2010. Notably, the tribunal found that Mr Corby’s beliefs related, in essence, to the best way of eliminating racism in society and were clearly worthy of respect – and, even if some of his colleagues objected to them, his beliefs could not be described as incompatible with human dignity or conflicting with the fundamental rights of others.
This is a tribunal decision, so it will not be binding on other tribunals.
This case highlights the challenges for employers in trying to accommodate employees with opposing views. It is important for employers to seek to encourage employees to respect their colleagues’ views even where they profoundly disagree with them. It is worth emphasising the point once made by Lord Justice Sedley that a right to speak inoffensively is no freedom at all.
4. Other recent developments
There have been a number of recent workplace developments which will impact on employers.
ACAS has published a draft Code of Practice on handling requests for a predictable working pattern, to sit alongside the new right to make these requests – which is due to come into effect in Autumn 2024. The Code has been published in draft as ACAS is seeking views on it as part of a consultation which closes on 17 January 2024.
The draft Code includes guidance on how an employer should handle a request for a predictable working pattern.
The periods within which certain criminal convictions must be disclosed to prospective employers have been reduced to help enable former offenders to find new employment. According to the Government’s press release, it is anticipated that over 120,000 former offenders will find it easier to get work and turn their lives away from crime following this change in the law.
Amendments to the Rehabilitation of Offenders Act 1974 mean that, as of 28 October 2023, some offences will become ‘spent’ seven years after the end of the sentence and will not need to be disclosed to employers after that point.
For example, with some exceptions for serious offences and roles that involve vulnerable people, custodial sentences of more than four years are now spent seven years after the sentence has been served, unless the individual commits a further offence in that period.
The FCA and PRA have removed the cap on bonuses that can be paid to material risk takers at banks, building societies and PRA-designated investment firms with effect from 31 October. The cap prevented these firms from paying bonuses of more than 100% of fixed salary, or 200% with shareholder approval. It does not directly affect solo-regulated FCA firms.
Employers with atypical workers should start preparing for handling requests for more predictable working patterns under the new legislation when the right comes into force.
5. Women’s health: Menopause and the workplace
The government has published a policy paper providing guidance “to help recruit, support and retain women experiencing menopause and stop women considering giving up their employment”.
The Menopause Employment Champion has introduced a four-point plan to improve menopause support in the workplace. Initially, the plan will be focused on a few sectors – hospitality, retail, care, manufacturing, and professional and technical sector – and other sectors (including construction and education) will be brought into the programme over the coming months.
The four-point plan includes:
- A portal for employers, which is set up by sector, to share best practice
- A sector-based ally-ship programme for women
- “Menopause-friendly employers” to act as advocates within a sector
- A sector-based communications plan to improve the working lives of women in their sector, through strategic partnerships
The government’s website, Help to Grow, will have a library of resources and guidance on the menopause for employers and employees.
Further developments on menopause support in the workplace are anticipated following the publication of a Manifesto for Menopause by an all-party Parliamentary group. The Manifesto calls on all political parties to commit to seven reforms ahead of the next General Election, which include the following employment-related reforms:
- Requiring employers with over 250 employees to introduce menopause action plans to support employees
- Providing specific guidance to small businesses, to support employees going through the menopause
- Introducing tax incentives to encourage employers to integrate menopause into occupational health
Labour has previously committed to the first two of these reforms.