Top 5 recent workplace developments – June 2024

Here is our selection of key recent employment law developments for employers, HR professionals and in-house lawyers.

1. Impact of the General Election on upcoming legislation 

The announcement on 22 May that the General Election would be held on 4 July has several implications for upcoming legal changes in employment law. 

Very soon after the election was announced, Parliament was dissolved. In the short period before dissolution, it had to be decided which bills would be passed and which would be dropped. In this Parliamentary “wash-up” period prior to dissolution:

• the Paternity Leave (Bereavement) Act 2024 received Royal Assent, 
• the House of Lords approved the draft statutory code of practice on the fair allocation of tips and
• the Code of Practice (Dismissal and Re-engagement) Order 2024 was made.

Any ongoing consultations which had not closed may continue as usual but no publicity for the consultation can be issued during the election and the consultation period may be extended beyond the original timeframe. There is therefore a chance that in the event of a new Labour government the TUPE consultation announced last month may be delayed. 

It will be for the next government to decide which unimplemented employment laws will be taken forward. Labour set out its plan for change in its paper “Labour’s plans to make work pay”, published on 24 May. Given its more radical plan to give workers the right to “have a contract that reflects the number of hours they regularly work”, it seems possible that the current proposal to introduce a right to request a predictable working pattern (due to come into effect in September this year) is at risk of being shelved. Other changes, such as the new duty to take reasonable steps to prevent sexual harassment and plans to introduce neonatal leave and pay are already in place and coming into force – we cannot see any incoming government doing anything to affect these changes. 

The government announced last year that it planned to introduce legislation to limit non-compete restrictive covenants to three months. However, these reforms have not progressed since then and we will have to wait and see what the incoming government does. Non-compete reforms are not included in the Labour Party’s employment law reform proposals. It may be that this is something that is a long way down the priority list and we won’t see any change actually coming through for some time – maybe if at all.

Fire and re-hire: We are expecting the Statutory Code on dismissal and re-engagement to come into effect on 18 July 2024. Accompanying the Code were regulations which would allow an uplift or reduction in compensation if the Code is not followed. These regulations will not come into effect on 18 July as expected because there was insufficient time before the election for them to be approved by Parliament. This means that for the time being, a failure to follow the Code will not lead to an uplift to the protective award, although it could lead to an uplift of compensation award in other claims such as unfair dismissal. 

Practical point

Employers should continue to prepare for upcoming changes in employment law but look out for announcements after the new government is installed after 5 July 2024. 

2. UK General Election: what are the main parties proposing on employment law?

With a General Election on 4 July 2024, what are some of the main political parties pledging to do on employment law if elected?

The Labour Party, which is ahead in the polls at the time of writing, has set out plans for far-reaching changes to workplace rights and protections if elected. These changes would have a significant impact on employment law in the UK. Key proposals include:

• moving to a two-category framework for employment status whereby people are classified as either ‘workers’ or ‘genuinely self-employed’ 
• giving all workers the same basic rights and protections from the first day of work, including statutory sick pay (SSP), parental leave and protection against unfair dismissal
• strengthening redundancy rights and protections, including reversing the Woolworths case
• introducing new rules designed to prevent the abuse of zero hours contracts 
• introducing ethnicity and disability pay gap reporting for employers with more than 250 employees
• strengthening trade union rights
• reforming the law on "fire and rehire".

For more details of these proposals, please see our detailed update.

The Conservative Manifesto includes the following proposals:

• overhauling the ‘fit note’ system to move responsibility from GPs to other work and health professionals
• continuing with the implementation of minimum service level agreements in relation to industrial action
• cutting employee national insurance to 6% by April 2027
• abolishing national insurance for self-employed people by the end of the next Parliament
• funding 100,000 high-quality apprenticeships for young people

The Liberal Democrats Manifesto includes the following proposals:

• establishing a new ‘dependent contractor’ employment status in between employment and self-employment, with entitlements to basic rights 
• doubling Statutory Maternity and Shared Parental Pay to £350 a week, and increasing paternity pay to 90% of earnings with a cap for high earners
• giving all workers, including self-employed parents, a day one right to parental leave and enhanced pay on the birth or adoption of a child
• increasing minimum wage by 20% for people on zero-hour contracts at times of normal demand 
• changing the burden of proof in employment tribunals so that the employer has to disprove employment status (rather than employee prove it)
• giving people a right to SSP from day 1, and removing the lower earnings limit
• introducing new Equality Act protected characteristics of ‘caring’ and ‘care experience’
• requiring large employers to publish data on gender, ethnicity, disability, and LGBT+ employment levels, pay gaps and progression, and publish five-year aspirational diversity targets
• introducing ‘Adjustment Passports’ to record the adjustments and equipment a disabled person has received, and ensure that support and equipment stays with them if they change jobs.

The Green Party Manifesto includes plans to move to a four day working week, increase minimum wage to £15 an hour for all ages, give equal employment rights to all workers from the first day of employment (including zero-hours and gig economy workers) and repeal ‘anti-union legislation’ and replace it with a new set of rights ‘with the right to strike at its heart along with a legal obligation for all employers to recognise trade unions.’ 

Practical point

We will keep clients updated on the potential for future significant changes to UK employment law as a result of this election. If elected, the Labour Party have promised an Employment Rights Bill to introduce reforms within the first 100 days but has promised to consult fully on legislation banning zero hours contracts, ending fire and rehire and introducing basic day one rights. It is unlikely that most reforms would take effect that quickly, but we could see some proposals for change relatively quickly on workplace law.

3. Trade unions and industrial action: protection from detriment for striking workers

Supreme Court has ruled that UK trade union legislation does not protect striking workers from sanctions short of dismissal.

The Supreme Court (the UK’s highest court) has found that the statutory provision which prohibits an employer from subjecting a worker to a detriment short of dismissal for taking part in the activities of a trade union (section 146 of the Trade Union and Labour Relations (Consolidation) Act 1992), does not provide protection from detriment short of dismissal to workers participating in lawful strike or other industrial action.

Protection is limited to activities which are outside working hours or within working hours with the employer’s consent. Industrial action will almost always be carried out during working hours to have the desired effect and it would be very unusual for an employer to consent to industrial action. This means that workers do not currently have statutory protection against sanctions short of dismissal where they take part in lawful strike action during working hours.

However, the Supreme Court concluded that the fact that workers do not have this protection is not compatible with Article 11 of the European Convention on Human Rights, which protects freedom of assembly and association and includes the right to strike. The Court found that it was not possible for it to read the legislation in a way which would be compatible.

As a result, the Court issued a declaration of incompatibility stating that section 146 is incompatible with Article 11. It is now for the UK parliament to decide what steps to take in light of the declaration of incompatibility, including whether and if so, how, to amend the legislation. 

Practical point

Despite this decision, employers should continue to exercise caution around taking action against striking workers (other than by withholding pay during strike action, which is allowed). This is to manage various legal and practical risks. However, action short of dismissal is no longer an automatic “no” following this decision (at least at the moment). We are of course ready to assist and advise in relation to any specific issues.

Parliament may well legislate to introduce new statutory protections for workers participating in industrial action, and it is likely that a future Labour government would do this sooner rather than later.

Secretary of State for Business and Trade v Mercer

4. Contract: Benefits provided by third-party provider

The Employment Appeal Tribunal (EAT) has ruled that an employer couldn’t rely on terms with a third-party provider to withdraw a lifelong travel benefit. 

The claimants, employed by Heathrow Express, were contractually entitled to discounted rail travel, which they were aware was provided by a third party. Initially, the benefit was lifelong for employees who retired or were made redundant after at least five years' service. An agreement between Heathrow Express and third-party provider, Rail Delivery Group (RDG), the sector's membership body, allowed for the benefit to be curtailed or withdrawn. Subsequently, RDG notified Heathrow Express that the lifelong benefit would be retained only for employees whose employment commenced before 31 March 1996 and who retired or were made redundant.

The claimants had over five years' service when they were made redundant in 2020 but had commenced employment after 31 March 1996 so were no longer entitled to the lifelong rail travel benefit. They subsequently brought breach of contract claims in relation to Heathrow Express’ refusal to provide this benefit. An employment tribunal dismissed their claims on the basis that the terms of the scheme, including the withdrawal terms contained in the agreement between Heathrow Express and RDG, had been incorporated into the claimants' employment contracts.

On appeal, the EAT found that there was no proper basis for finding that the agreement between Heathrow Express and RDG had been incorporated into the claimants' contracts. This was because they were not party to that agreement, reference was not made to it in their employment contracts, they hadn’t been provided with a copy of it and didn’t know of its existence. The EAT concluded however that the tribunal's finding - that the claimants, who had been made redundant after over five years' service, had an incorporated contractual right to enjoy the lifelong rail travel benefit after dismissal - could stand.

This means that the claimants had accrued the contractual right, and that Heathrow Express could not unilaterally remove it (relying on the agreement with RDG). The claims therefore succeeded. 

Practical point

Employers that provide contractual benefits with the support of a third-party provider should ensure there is unambiguous and express communication to employees of the limits of the employer's commitment to provide that benefit by reference to what has been agreed with the third-party provider. 

Adekoya & Others v Heathrow Express Operating Company Ltd 

5. Gender pay: Pay transparency 

The government has paused a pilot scheme on pay transparency which sought to help tackle the gender pay gap.

To mark International Women's Day in 2022, the government launched a pay transparency pilot which sought to improve pay transparency in the job application process and help businesses in attracting women to their positions. 

Participating employers of the scheme, which was intended to put women in a position where they could negotiate pay on a fairer basis, were required to: 

• include information about salary details in their job advertisements, and 
• not to ask candidates to disclose salary history during the recruitment process. 

However, few details about the pilot scheme have been made available and, in May 2024, it was confirmed that it has been paused. The government has said that it wants to learn from the experiences of other countries that are exploring legislative options before taking any further action.

Practical point

Despite this pilot scheme being paused, there are expectations for greater pay transparency in the UK. 

The EU Pay Transparency Directive, which EU Member States must implement into their own law by 7 June 2026, introduces new obligations on employers to disclose salaries at the point of recruitment, comply with employee requests for pay data, publish gender pay gap statistics and face compulsory audits and penalties where unjustified discrepancies come to light. 

The Directive establishes a new benchmark for pay transparency and whilst it will only directly apply to EU Member States, and non-EU employers who employ people in the EU, it will undoubtedly raise expectations of pay transparency in the UK. The war for talent and employee expectations will inevitably be impacted as will the expectations of shareholders and clients, who are choosing to work for and do business with companies according to their Environmental Social and Governance (ESG) strategy, which increasingly will include higher expectations on pay transparency.

For further details about the EU Directive and its likely impact on UK employers, see our update. 

Government abandons pay transparency pilot.