With 2024 having ended, we thought it would be useful to reflect on some of the key legislative changes extracted from the CIPD’s ‘People Management’ publication that will shape people strategies and workplace culture this year.

Flexible Working Legislation (implemented)

The government announced new flexible working regulations which came into effect on 6 April 2024, giving employees the right to request flexible working arrangements from day one of employment. Under previous legislation, workers had to have been employed for at least 26 weeks before making a request to work flexibly.

‘Flexible working’ can refer to working patterns or hours, including part time, flexitime, term time, compressed hours and adjusting start and finish times, as well as location; for example, working from home – either partially or fully.

Holiday Pay Reform (implemented)

Changes to the Working Time Regulations were introduced by the government from the start of 2024, simplifying calculations of holiday pay for irregular hours and part-year workers. The changes follow the 2019 Supreme Court ruling Harpur Trust v Brazel, which meant that part-year workers on permanent contracts were entitled to the full 5.6 weeks’ holiday pay that a full-time worker would receive.

Instead, irregular hours and part-year workers now have their holiday pay calculated as 12.07 per cent of actual hours worked in a pay period, for leave years starting on or after 1 April 2024. This calculation is based on the fact that all workers are legally entitled to 5.6 weeks’ leave, the guidance noting that they may be entitled to more than the minimum if specified in their contract.

Labour’s Plan to ‘Make Work Pay’: Day 1 protection (proposed)

As part of a flurry of employment law reforms (28 in total) that will form part of the new Employment Rights Bill, Labour plans to introduce a day-one right to protection from unfair dismissal for all workers, which also include parental leave, sick pay and flexible working. It went on to assuage employers’ concerns by stating the change to give employees greater protection from unfair dismissal “will not prevent fair dismissal, which includes dismissal for reasons of capability, conduct or redundancy, or probationary periods with fair and transparent rules and processes”.

The plan further emphasised that the government would ensure employers are able to operate probationary periods to “assess new hires”. However, it added: “The changes will help to ensure that newly hired workers are not fired without reason or cause and will help drive up standards in workplaces.”

Labour’s Plan to ‘Make Work Pay’: Single Worker Status (proposed)

The new government has promised to consult on adjustments to the “complex area” of employment status, including scrapping the UK’s current three-tier system and creating a single status of ‘worker’ in which people are either employed or self-employed.

As part of Labour’s Plan to Make Work Pay, which was published before its election victory and outlined its proposed reforms to workers’ rights, the party said that it would “transition to a simpler two-part framework for employment status” and will consult in detail on a simpler framework that “differentiates between workers and the genuinely self-employed”.

In its manifesto, Labour said this “could properly capture the breadth of employment relationships in the UK, adapt to changing forms of employment and guard against a minority of employers using novel contractual forms to avoid legal obligations,” all while ensuring that workers can benefit from flexible working where they choose to do so.

Fire & Rehire (proposed)

The proposal here is to ban dismissing employees who refuse to agree changes in their contracts and offer to re-employ them on new terms, and to bring in a new Code of Practice to support this. The bill will restrict employers’ ability to use fire and rehire by amending the law on unfair dismissal so that, where employees are dismissed for failing to agree to a change in their contract of employment, those dismissals will be treated as automatically unfair unless the employer can show evidence of financial difficulties and demonstrate that need to make the change in contractual terms was unavoidable. A new statutory Code of Practice on fire and rehire and dismissal and re-engagement came into force on 18 July this year ahead of the Labour’s plan to ban the practice entirely, with the code saying the option should be treated as a “last resort” but that employers may use dismissal and re-engagement if it has “participated in a thorough and open information-sharing and consultation process, as part of which it has genuinely considered any reasonable alternative proposals”.

Whilst no doubt a key term for Labour, and one they will wish to implement quickly, it is anticipated this will require significant consultation and new legislation.

Banning of zero-hours contracts

This proposal is to ban the use of ‘exploitative’ zero-hours contracts and to replace such contracts with a new right for employees to have a contract that reflects the hours regularly worked (in a 12-week reference period). The legislation will also apply to workers on low-hours contracts.

Clause 1 of the Bill introduces a new obligation on employers to offer “guaranteed hours contracts” to qualifying workers. This applies to workers who, over a specified reference period, regularly work more hours than those guaranteed in their contracts, effectively making it illegal for employers to offer zero or minimal guaranteed hours while expecting workers to fulfil a higher workload. This move is designed to protect workers from the uncertainties associated with zero hours contracts and ensure that those who consistently work a regular pattern have this reflected in their contract. However, there are complexities to watch out for. For example, it’s not yet clear how employers should handle seasonal work or fluctuating demand, which could lead to unintended consequences such as employers limiting hours or restricting workers from developing regular patterns.

The Bill also includes exceptions for contracts that are genuinely temporary, such as those that expire upon the completion of a specific task or event. This gives employers some flexibility, but care will need to be taken to ensure that these exceptions are not overused to undermine the spirit of the law.

Clause 2 of the Employment Rights Bill introduces a new right for workers to receive reasonable notice of their shifts. The intention is to give employees greater certainty about their working hours, enabling them to plan their lives with more confidence. The detail of what constitutes “reasonable notice” is yet to be finalised, but the government aims to ensure that workers have adequate time to prepare for shifts or changes in working hours.

Closely related to the new right to reasonable notice is the right to compensation when shifts are cancelled or changed with insufficient notice. Clause 3 of the Bill makes it clear that workers will be entitled to compensation if their shifts are cancelled at short notice or if their hours are curtailed. The exact level of compensation and the definition of “short notice” will be set in Regulations in due course, but it is expected that any notice given less than seven days before the shift will fall into this category.
For employers, this adds real complexity, as you will need to balance flexibility with the financial implications of cancelling or altering shifts. If an employer cancels a shift too close to the scheduled time, they will need to compensate the worker for the lost hours, potentially paying out for work that wasn’t performed. This could have a considerable financial impact, especially for businesses that rely on short-notice adjustments to their workforce, such as those in retail, hospitality, or care.

So, lots to be thinking about – and more to come.  As always if you have any questions regarding the above or if you’d like to discuss these or any other points further please give one of our expert team a call or get in touch via our Contact Form.