EU Reform – some, but not all change – what do businesses need to know?
The Government plan for thousands of EU-era laws to expire automatically at the end of 2023 was dubbed a post-Brexit bonfire which has become a bit of a damp squib. However changes are afoot and 2024 starts with the first UK employment law updates coming into effect.
EU law supremacy has now ended, this means the UK can alter EU based laws. From January 2024, UK laws may in some cases be interpreted without having to apply existing EU case law. Many EU-based laws will still exist but we can expect more flexibility and further changes ahead.
There are some key day-to-day practical changes for employers to get to grips with now and within the next few months, as a result of these Post Brexit reforms and as part of a programme of employment law updates anticipated in 2024.
With effect from 1 January 2024
- Extension of statutory definition of a week’s pay for holiday pay purposes
After years of confusion, clarification has been provided on what needs to be included as ‘normal’ pay for holiday pay purposes. Additional elements that need to be included in the calculation are;
- Commission payments – payments which are intrinsically linked to the performance of tasks which a worker is obliged under their contract to carry out should be included.
- Supplemental payments due to having a professional qualification.
- Overtime payments – payments which have been regularly paid to a worker in the 52 weeks preceding the calculation date
Please note that the amended definition of ‘normal’ pay will only apply to the 4 week EU law derived holiday entitlement. In theory, the 1.6 week additional domestic entitlement can be calculated on the current, unamended extended definition of ‘basic’ pay, but employers should consider whether this is the right approach from a practical and morale perspective.
- Clarification of holiday carry-over entitlement
It has been made clearer when a worker/ employee is entitled to carry-over their holiday entitlement because they were unable to take statutory holiday due to maternity or other family-related leave, will be entitled to carry over all of their untaken leave into the following leave year. Some employees who have not been able to take their holiday due to sickness or where an employer has not enabled holiday to be taken will have a more limited holiday carry–over entitlement.
For leave years started on or after 1 April 2024
- New system of holiday accrual for part-year and irregular hour workers
A welcome resolution of a complex area for many clients:
- A pro-rata method of calculating annual leave for irregular hour workers and part-year workers has been introduced, this will be calculated at 12.07% of actual hours worked.
- Employers can choose whether to pay this as holiday taken, or to pay as rolled up holiday pay (additional payments in each payslip during working time instead of while the worker is on holiday)
With effect from 6 April 2024
- Day one right to request flexible working arrangements
- There will no longer be a requirement to complete six months’ service before an employee can submit a flexible working request.
- Carer’s Leave
- Long term carers will have an entitlement to one week’s leave in each rolling 12-month period
- Extension of redundancy protection for pregnant employees and those returning from maternity/adoption leave and shared parental leave
The right to be offered an alternative employment vacancy in priority over other employees is extended;
- to pregnant employees when they employer has been notified of the pregnancy
- to 18 months from the child’s date of birth, or in the case of adoption, date of placement
- to 18 months for those taking more than six weeks of shared parental leave
- New Paternity Leave Regulations
The ‘Paternity Leave (Amendment Regulations) 2024 will make the following changes and apply in all cases where the expected week of childbirth is either on, or after, 6 April 2024;
- employees will now be able to take their two-week paternity leave entitlement as two separate one-week blocks
- Paternity leave can now be taken at any time in the 52 weeks after the birth (as opposed to having to take the leave in the 56 days following birth)
- Only 28 days’ notice will be required before going on paternity leave
With effect from 1 July 2024
- Changes to TUPE consultation obligations (The Transfer of Undertakings (Protection of Employment) Regulations 2006)
Current regulations require that where there is a TUPE transfer employers must inform and consult with representatives from either a trade union or other employee representatives. Currently, employers can only inform and consult directly with employees if they have fewer than 10 employees.
For TUPE transfers taking place on or after 1 July 2024, if there are no existing employee representatives in place, employers will be able to consult with employees directly without electing a representative where:
- the employer employs fewer than 50 total employees; or
- the proposed transfer involves fewer than 10 employees, irrespective of the size of the business.
Whilst there is helpful government guidance available about the changes to holiday pay Holiday pay and entitlement reforms from 1 January 2024 – GOV.UK (www.gov.uk), some of these changes are relatively complex. We would be happy to discuss with you and assist on how you should adapt your business policies, employment contracts and procedures to accommodate them. Contact us at [email protected] or on 0203 667 5400.
