Round-up of employment law changes in 2024 and what to look out for in 2025

There has been a significant amount of employment law changes or proposed changes, particularly with the Labour Government coming into power earlier this year. A change of government usually entails a raft of changes or proposed changes in employment law, but alongside this, there has been a notable paradigm shift towards the importance of workers’ rights since various industrial unrest and additional costs to be borne by employers, for example, in the form of increased National Insurance contributions, increased day one rights and scrutiny of ‘fire and rehire’ practices and exploitative zero hour contracts. In this article, we will take a whistlestop tour of the various key employment law and case law changes that have taken place this year and then we will highlight what to expect in 2025.

Key employment law changes in 2024

January

Updated Code of Practice on Flexible Working

At the end of January, ACAS updated its Code of Practice on Flexible Working in which the updated Code incorporates the changes made to Flexible Working laws with effect from April 2024. The update in flexible working has been significant since the widespread Covid-19 lockdowns, and the Code must be followed if any statutory requests for flexible working are submitted.

February

New Code of Practice on fire and re-hire

In February, the statutory Code of Practice on Dismissal and Re-engagement was introduced, which came into force on 18 July 2024. There is no standalone claim for breach of its provisions, however it must be considered by the Employment Tribunal in relevant cases, such as unfair dismissal. The Code gives the Employment Tribunal the ability to uplift compensation by up to 25% if an employer unreasonably fails to follow it. The uplift does not apply to protective awards for failure to inform and consult in collective redundancy situations. Notably, the Code states that ‘fire and rehire’ should only be used as a last resort and that the purpose of the Code is to “ensure that an employer takes all reasonable steps to explore alternatives to dismissals and engages in meaningful consultation with a view to reaching an agreed outcome with employees and/or their representatives”.

March

Annual update to the Vento Bands

The Vento bands establish the awards the Employment Tribunal can make to compensate for an injury to feelings in discrimination cases. In respect of claims presented on or after April 2024, the Vento bands are:

• A lower band of £1,200 to £11,700 (less serious cases);
• A middle band of £11,700 to £35,200 (cases that do not merit an award in the upper band); and
• An upper band of £35,200 to £58,700 (the most serious cases), with the most exceptional cases capable of exceeding £58,700.

April

We saw the usual annual increases to Tribunal awards, National Minimum Wage/National Living Wage and family friendly rates commence to account for inflation. A particular point to note in relation to a dismissal award, was that a minimum award (£8,533 from 6 April 2024) in exceptional cases, where the reason or principal reason for dismissal was trade union membership or activities; activities as a health and safety representative; duties as an occupational pension scheme trustee; functions or activities as an employee representative or candidate; or working time grounds applies.

May

Labour published its ‘new deal for working people’, entitled Labour’s Plan to Make Work Pay, in which it set out its mission to grow the UK economy and raise living standards by introducing legislation in Parliament within 100 days of entering government. Its pledge included ending “one-sided flexibility” (including banning zero hour contracts), ending “fire and rehire” and setting out new basic day one rights.

June-July

We witnessed a significant election campaign over the course of June which led to the Labour Government coming into power in early July. The King’s Speech also set out Labour’s legislative agenda for their first few months in government seeking to implement their ‘New Deal for Working People’ in full.

August

Repeal of the Strikes (Minimum Service Levels) Act 2024

The government announced that it was going to appeal this Act which had only been introduced by the previous Conservative Government during a wave of industrial action which enabled employers to require a minimum level of service to be provided during a strike, which applied to specific services. It was reported that the Act had not been used by any employer and had not resolved a single strike so unsurprisingly such considerations have resulted in this Act being repealed. The Government had emphasised its commitment to promoting positive industrial relations to “ensure [its] workers have a voice”. The Act is due to be repealed through the Employment Rights Bill.

Right to switch off

The government made a pledge to “bring in the ‘right to switch off’” in their ‘Make Work Pay’ paper where it announced its consideration of this approach to be introduced in a Code of Practice. The pledge did not consider how this work in practice but if to be considered in a Code of Practice, it would be envisaged that a standalone claim could not be brought for breach of the right to switch off, however it would be considered as an aggravating factor to consider the level of compensation any awards made by the Tribunal. We will provide more details on this potential new Code, particularly where no details have been provided as to what type of claims this Code could apply to.

September

Despite this Act receiving Royal Assent in September 2023, it was confirmed that the Workers (Predictable Terms and Conditions) Act 2023 would not be brought into force in Autumn. However, it seems that the concept of the Act would be considered by the government, particularly where it had proposed banning exploitative zero-hour contracts and ensuring that workers had a right to a contract that reflects the number of hours they regularly work.

October

Allocation of tips

The Employment (Allocation of Tips) Act 2023 came into force on 1 October 2024. Under the Act, employers are required to pass tips on to workers; employers of businesses where tips are left more than occasionally are required to have a tipping policy in place; and workers have a new right to request a copy of their tipping record, in order to enable them to bring a claim to Employment Tribunal where they believe they are not receiving tips they should be. Employers are also required to have regard to a new statutory Code of Practice when distributing tips which also came into force on 1 October 2024.

Employers’ new duty to prevent sexual harassment

A new legal duty came into force on 26 October 2024 in the form of the Worker Protection (Amendment of Equality Act 2010) Act, placing a positive obligation on all employers to take reasonable steps to prevent sexual harassment in the workplace. The Equality and Human Rights Commission published practical guidance on this ‘preventative duty’ and what employers need to be doing.

The guidance makes clear that this preventative duty covers not only harassment committed by another worker or agent of the employer but also third parties.  It is an anticipatory and ongoing duty and so employers are expected to anticipate the risks for employees of sexual harassment within their businesses, take action to prevent this and keep this under review.

An employer who breaches this duty can face enforcement action from the EHRC and, if an individual succeeds in a claim for sexual harassment, any compensation the employer is required to pay can be increased by up to 25%.

Employment Rights Bill

In this month, we also witnessed the significant Employment Rights Bill being published which contained a full shake-up of employment rights. The bill itself was 158 pages long and introduced 28 individual employment reforms estimated to provide more rights to nine million workers. Notable changes included, day one rights for unfair dismissal with a set probation period, day one family rights, bereavement leave, sick pay amendments, flexible working amendments, a requirement for employers to make an offer of guaranteed working hours, changes to the scope of sexual harassment preventative measures and changes to fire and rehire practices, redundancies and trade union rights. In addition to this, the Bill contains substantial changes to collective redundancy laws, including the removal of “at one establishment” from the legislation and increasing the protective award from 90 to 180 days. Such a bill is extensive and demonstrates a shift to giving workers increased rights. Since the announcement of this Bill, many of these reforms are being consulted on and we will update over the course of this year.

November

The government issued an Amendment Paper on the Employment Rights Bill in which key changes included extending the time limit for bringing all tribunal claims from 3 months to 6 months and changing the definition of ‘initial period of employment’ for the purposes of unfair dismissal becoming a day one right. It is now clear that the initial period of employment, to be set out later in the Regulations, must be between 3 and 9 months.

Key employment case law changes in 2024

We also saw the following key cases which will have significant impacts:

• Fire and rehire – Tesco Stores Ltd v USDAW [2022]
• Supreme Court upheld an injunction to prevent Tesco from using ‘fire and rehire’ practices on employees who had the contractual benefit to enhanced pay which was described as “permanent”. Tesco had offered enhanced pay to staff willing to relocate to new distribution centres (“Retained Pay”). The terms of the Retained Pay were contractually described as “permanent” subject to specific circumstances. Tesco wished to bring Retained Pay to an end and if an employee did not agree their employment would be terminated and they would be offered re-engagement on the same terms but with the Retained Pay term removed. The Supreme Court upheld the High Court’s decision that the right to receive Retained Pay will continue for as long as employment in the same role continues, and commented that this right is deprived of its value if there is nothing to prevent Tesco unilaterally terminating the employment to defeat it.
• Breakdown of trust – Ms N Hanson v Interaction Recruitment Specialists Ltd [2024]
  • An employment tribunal held that an employer had contributed to the breakdown of the trust and confidence with their employee by failing to respond to the employee’s greeting. The claimant had arrived late to work due to a medical appointment and attempted to greet the company’s managing director by saying hello to him three separate times, but the director refused to reply. The director had mistakenly thought that the claimant was late to work and he was not aware of her pre-approved medical appointment. The director also contacted two employees who report to the claimant to inform them of a pay rise without previously informing the claimant. The tribunal held that the director of the employer had already formed their view of the claimant’s role performance and the employers conduct was held to be calculated or likely to destroy or seriously damage the trust and confidence between the claimant and employer.
• Disability discrimination – Mrs K Hibbert v The Chief Constable of Thames Valley Police [2020]
  • An employment tribunal awarded a former police officer £1.1million in compensation for a disability discrimination and constructive dismissal claim. The claim was brought against the officer’s employer who had withdrawn permission allowing the former officer to run an events business alongside her policing role. The tribunal held that the employer had failed to make reasonable adjustments and that discrimination had arisen from the former officer’s disability in respect of the withdrawal of her permission to conduct a business interest. The tribunal conducted a grossing up exercise to decide what tax would be payable and to make an additional award to reflect this. The grossing up exercise was necessary in this case as majority of the compensation (most notably the future income losses and pension payments) were taxable.
• Protected characteristic – British Airways plc v Rollett and others (minister for Women and Equalities intervening) [2024]
  • EAT upheld the Tribunal’s decision and confirmed that claimants who share the same disadvantage as those with a relevant protected characteristic are entitled to bring a claim for indirect discrimination, even though they do not share that protected characteristic. The claimants, a group of cabin crew, argued that British Airways’ restructuring exercise and scheduling changes put employees who live abroad (predominately non-British nationals) and employees with caring responsibilities (predominately women) at a particular disadvantage. The claimants included individuals who did not share the protected characteristics but who suffered the same disadvantage, for example male employees with caring responsibilities. The EAT confirmed that the tribunal had jurisdiction to hear the claims of indirect discrimination from those who did not have the relevant protected characteristic.

What to look out for in 2025

• Employment Rights Bill – As we mentioned above, this Bill is currently making its way through Parliament. The Regulatory Policy Committee published its opinion on the Bill in November this year and was of the opinion that the overall impact assessment is “not fit for purpose”, it will therefore be interesting to see the Bill’s passage through Parliament and how many of the provisions are enacted.
• Women and Equalities Committee Inquiry – Women and Equalities Committee have launched an inquiry into paternity and shared parental leave and is conducting a call for evidence which will last until 31 January 2025. The Committee’s report will examine options for reform to paternity and shared parental leave and aim to identify ways of incentivising more equal sharing of childcare responsibilities between parents.
• S207A of the Trade Union and Labour Relations (Consolidation) Act 1992 Order – On 20 January 2025, S207A of the Trade Union and Labour Relations (Consolidation) Act 1992 will give a Tribunal the power to uplift or reduce compensation by up to 25% for unreasonable failure to comply with the dismissal and re-engagement code of practice.
• The Neonatal Care (Leave and Pay) Act – The Act received Royal Assent on 24 May 2023 and will allow eligible employed parents with newborn babies that have been admitted to neonatal care to take up to 12 weeks of paid leave. This will be in addition to other leave entitlements, such as maternity and paternity leave. The Act is likely to take effect from April 2025.
• Equality (Race and Disability) Bill – The government committed to introducing a draft Equality (Race and Disability) Bill in the Kings Speech earlier this year. The Bill aims to tackle pay discrimination at work and will introduce mandatory reporting for employers with 250 or more employees, who will be required to report and publish their ethnicity and disability pay gaps.

That’s the end of our whistlestop tour which demonstrates the raft of employment law changes we have witnessed or have been proposed over the past year. We will continue to review the outcome of the various outcomes of the consultations and will report on these in due course.

If you require further advice on these topics, please do not hesitate to contact a member of our employment law team.