A guest blog from Simon Bloch, Employment Partner at JMW Solicitors LLP.
Employment laws are constantly being updated and changed. There have been a significant number of developments in employment law over the last few months, as well as forthcoming changes that employers should be aware of due to the impact they are likely to have on employment practices. Below is a summary of some of the key changes.
Legislation
Family-friendly Laws Receive Royal Assent
On 25 May 2023 the Government announced that three family-friendly laws had received Royal Assent which are aimed at affording increased protections of carers and parents within employment by encouraging workforce participation and protecting vulnerable workers. Whilst there is no set timeline as of yet, it is hoped that these laws will be implemented in the near future:
- Carer’s Leave Act
Employees will be entitled to take a minimum of one week’s unpaid leave to provide or arrange care for dependents with long term care needs. They will also be protected from dismissal and detriment for having taken or requested time off for this purpose.
- The Protection from Redundancy (Pregnancy and Family Leave) Act
The existing period of protection for pregnant employees will be extended under the new Act, meaning that they will be protected from dismissal or redundancy from the point that they notify their employer of their pregnancy, and until six months after they have returned to work. Protection will also be extended to those taking adoption or shared parental leave.
- Neonatal Care (Leave and Pay) Act
This Act will introduce an entitlement for parents to take up to 12 weeks’ paid leave where their baby is required to receive neonatal care. Such leave can be taken in addition to maternity and paternity entitlements and will be introduced as a day one right.
- Employment Relations (Flexible Working) Act
Having received Royal Assent on 20 July 2023, this Act will make changes to the current flexible working framework by allowing employees to make two flexible working request per year and no longer requiring them to explain the effect that such change would have on their employer or how this should be addressed. In addition to this, employers will only have two months to make a decision on flexible working requests and will also be required to consult with employees before rejecting them. At present, the right to request flexible working is not going to be introduced as a day one entitlement, however it is thought that secondary legislation will be implemented by the Government to allow this at a later stage.
Case Law
Government Strike Legislation Quashed: R (on the application of ASLEF and others) v Secretary of State for Business and Trade
Following proceedings in this case, the High Court made the decision to quash controversial Government legislation which allowed employers to replace striking workers with agency staff.
Proceedings were brought by a number of trade unions to instigate judicial review of The Conduct of Agencies and Employment Businesses (Amendment) Regulations 2022 that were introduced in July last year. The new provisions repealed Regulation 7 of the Employment Agencies and Employment Businesses Regulations 2003 that had originally made it an offence for employers to replace employees taking part in official industrial action with agency workers.
On the 13 July 2023 it was confirmed that the High Court had quashed the Government’s legislation, once again making it a criminal offence for employers to engage agency staff for the purposes of replacing striking employees.
What’s in the Pipeline?
Consultation on Holiday Pay
Following the Supreme Court judgement in the case of Harpur Trust v Brazel in July 2022, the Government launched a consultation seeking views on their proposals in respect of how holiday pay should be calculated for part-year and irregular workers. The consultation closed on 9 March 2023, but we are still awaiting the outcome of this.
The consultation made the following proposals:
- Making pro-rating a lawful approach.
- Introduction of a 52-week reference period.
- Weeks in which no work is performed to be included in reference period.
- A monthly reference period to be used where employees have less than 1 years’ service.
The Government has since published a further policy paper on 10 May 2023 entitled ‘Smarter Regulation to Grow the Economy’ outlining intentions to make changes to the law in respect of holiday pay and leave entitlement as follows:
- The Government intends to merge the two existing holiday entitlements that employees receive (4 weeks and 1.6 weeks) to create one single leave entitlement of 5.6 weeks.
- It further announced its intentions to allow the use of “rolled-up” holiday pay to be paid at 12.07% of all hours worked, which is currently deemed to be unlawful.
The aim of these proposed changes is to address the administrative burden that the calculation of holiday pay and leave entitlement has on employers, and to address the ‘absurdities’ that the ruling of Harpur Trust potentially creates where part-year workers are entitled to the same as their full-time counterparts.
Government Consultation on Umbrella Companies
On 6 June 2023, the Government issued a new consultation aimed at regulating umbrella companies and tackling non-compliance within the umbrella market. In its consultation, the Government sought views on its proposals to better define umbrella companies to ensure compliance with tax regulations and employment rights.
The following proposals were set out within the consultation:
- Mandating Due Diligence: Imposing a requirement for recruiters or their clients to conduct due diligence on umbrella companies and imposing penalties for those found to be non-compliant.
- Transfer of Tax Debt: Legislation which allows HMRC to collect unpaid tax from another party in the labour supply chain.
- Employment Businesses that supply workers to the end client to be deemed as the Employer for Tax Purposes: Recruiters are to be treated as the employer for tax purposes and would be held responsible for any irregularities on payroll, even where they used an umbrella company to perform that function.
The consultation closed on 29 August 2023 and it is hoped that there will be further updates in respect of this in due course.
Artificial Intelligence
On 11 August 2023, the House of Commons published a report reviewing the relationship between Artificial Intelligence (“AI”) and employment law. This follows a policy paper published by the Government back in March 2023 entitled “A pro-innovation approach to AI regulation”, which proposed a framework for non-statutory regulation of AI in the UK.
AI tools continue to become an increasingly prominent feature across various sectors and as such, the House of Commons report focuses on the use of AI within three broad areas of the workplace:
- Recruitment
- Line Management
- Monitoring and Surveillance
There are currently no express UK laws which govern the use of AI within the workplace, however, it is clear from the Government’s publications that it intends to “strike a balance between regulation and innovation”. Despite the Government’s proposal of a non-statutory framework to regulate AI, there are a number of non-governmental organisations who have advocated for AI-specific legislation to be introduced.
It will therefore be interesting to see how the Government intends to address the topic of AI in the workplace in the future.
Simon is a Partner at JMW Solicitors LLP, a full serviced law firm. He is a qualified solicitor and experienced employment lawyer and has specialised in working with advising businesses in the recruitment sector for over 15 years. He regularly advises in relation to restrictive covenant disputes in the recruitment sectors and has a keen interest in the business protection issues that have arisen from the use of social media. Simon has been recognised in the Legal 500 as “experienced advising clients in recruitment compliance, as well as in restrictive covenant disputes and employment issues involving the use of social media” and was ranked in the 2023 Chambers and Partners.
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