National Wage increases
The National Living Wage will increase by more than a pound an hour from April 2024, the Treasury has announced.
Chancellor Jeremy Hunt said that the pay threshold will rise from £10.42 per hour to £11.44, the largest increase in more than a decade.
It will also be extended to 21-year-olds for the first time, meaning overall a pay rise of £1,800 a year for a full-time worker.
National minimum wage for 18 to 20-year-olds will also increase by £1.11 to £8.60 per hour, the Government has said.
Apprentices will have their minimum hourly rates boosted, with an 18-year-old seeing their minimum hourly pay increase by over 20 per cent, going from £5.28 to £6.40 an hour.
There has been yet another development in a tribunal claim relating to holiday pay. Prior to the case of Chief Constable of the Police Service of Northern Ireland & Anor v Agnew & Ors, Employees had a 3-month time limit from the last holiday underpayment to request their holidays were backdated and corrected for the last 2 years. If their last underpaid holiday was more than 3 months ago, they had no right to ask for it.
The UK’s Supreme Court last week diminished the 3-month time limit so employees can claim underpayment of holidays going back 2 years. Note that Northern Ireland does not have a limit on the 2-year timeframe!
Holiday Pay rates:-
The Department for Business and Trade has recently announced plans to make significant changes to annual leave and holiday pay laws. A response to two consultations and draft regulations have been published which, subject to parliamentary approval, will make the following key changes:
From 1 January 2024, the law will more clearly specify what is included in holiday pay for the first four weeks’ annual leave (reg 13 WTR 1998) so that, to the extent it does not already do so, it must now include:
- Payments, including commission payments and performance-related bonuses, which are intrinsically linked to the performance of tasks which a worker is obliged to carry out under the terms of their contract;
- Payments for professional or personal status relating to length of service, seniority or professional qualifications; and
- Other payments, such as overtime payments, which have been regularly paid to a worker in the 52 weeks preceding the calculation date.
Payments for the remaining 1.6 weeks and above can continue to be paid at a rate of basic pay plus guaranteed overtime.
Irregular-hours and part-year workers, including rolled-up holiday pay
In relation to leave years starting on or after 1 April 2024, provided they meet the relevant statutory definition, these workers will be removed from the scope of the existing holiday entitlements under regulation 13 and 13A of the WTR 1998 (set out above). They will instead be subject to new regulations, which will provide:
- A new holiday entitlement whereby holiday accrues based on 12.07% of the hours worked in the previous pay period; and
- An optional right for employers to implement a system of rolled-up holiday pay for their irregular-hours and part-year workers. This will be based on a 12.07% uplift on pay paid at the time work is done, instead of when the worker takes annual leave.
A worker is an irregular-hours worker if, under their contract, the number of paid hours that they will work in each pay period during the term of their contract in that year is wholly or mostly variable. A worker is a part-year worker if, under the terms of their contract, they are required to work only part of that year and there are periods within that year (during the term of the contract) of at least a week which they are not required to work and for which they are not paid (ignoring any periods of sick leave or statutory family leave).
The Government has published draft legislation to amend the Equality Act 2010 with effect from 1 January 2024. The Equality Act 2010 (Amendment) Regulations 2023 modify certain EU-derived discrimination protections which would otherwise have disappeared at the end of this year due to Brexit.
- The right to claim indirect discrimination by association (to cover a person who does not hold the relevant protected characteristic but suffers the same disadvantage at the hands of the employer’s PCP as those who do have that characteristic)
- An amendment to guidance on the definition of disability to state that consideration of a person’s ability to participate fully and effectively in working life on an equal basis with other workers is relevant when looking at ‘day-to-day activities’.
- A ‘single source’ test for establishing an equal pay comparator (the idea that an equal pay comparator can potentially work for a different business so long as the body responsible for setting terms is the same)
- An extension of direct discrimination protection to cover discriminatory statements made about not wanting to recruit people with certain protected characteristics even where there is no active recruitment process ongoing and no identifiable victim.
- Confirmation that employment discrimination on grounds of breastfeeding falls under the protected characteristic of sex.
Employment (Allocation of Tips) Act 2023
This piece of legislation received Royal Assent in May of this year. In summary, there is a new legal obligation for employers to:
- Fairly allocate tips over which they exercise control or significant influence (for example paid via card machine and going into a central bank account) and
- Pay workers in full within a month of the payment made by the customer • Have a written policy where tips are paid on a regular basis
- Maintain a record of tips for three years
Workers (Predictable Terms and Conditions) Act 2023
Received Royal Assent on the 18th September 2023.
- Under this legislation, all workers will have the legal right to request a predictable working pattern. This includes zero-hour contracts
- A minimum service requirement of 26 weeks
- Two applications allowed in a 12-month period
- Employers will have one month to respond.
Worker Protection (Amendment of Equality Act 2010) Act 2023
Received Royal Assent on the 26th October 2023.
- New duty to take reasonable steps to prevent harassment of employees
o Watered down from all reasonable steps
o Also removed the reintroduction of liability for third-party harassment which was previously repealed in 2013
- 25% in tribunal awards if employers have failed to take reasonable steps
The Employment Relations (Flexible Working) Act 2023
As mentioned on a blog back in July, amendments to the flexible working legislation was currently waiting for Royal Assent. This was granted and the following changes are expected to be put in place.
- Removal of requirement for employee to explain impact of request
- Employees able to make up to two requests within a 12-month period
- Employers will be required to respond to flexible working requests within 2 months rather than the previous 3 months
- Mandatory consultation before rejection
- Day one right