Major Changes to UK Employment Law in October 2024: What Employers Need to Know

Significant updates to UK employment law are set to take effect in October 2024, reshaping employer responsibilities and strengthening employee rights. These changes focus on combating workplace harassment, improving job security, and enhancing employee protections.

The key developments include the Worker Protection (Amendment of the Equality Act 2010) Act, Employment (Allocation of Tips) Act 2023 and the Employment Rights Bill, which are set to create safer, more secure, and fairer working environments. Here’s a closer look at what these changes entail and how they will impact both employers and workers.

1. Worker Protection and Sexual Harassment: A New Duty for Employers

On 26 October 2024, the Worker Protection (Amendment of the Equality Act 2010) Act will come into force, introducing a landmark change aimed at tackling workplace harassment. Under this new law, employers will be required to take proactive measures to prevent sexual harassment in the workplace. This shift places a greater emphasis on employer accountability by making it a legal obligation to establish preventative measures rather than simply responding to incidents after they occur.

Failure to comply with this duty could lead to increased compensation penalties in sexual harassment claims, with enforcement powers granted to the Equality and Human Rights Commission (EHRC). This move is designed to address longstanding concerns about the prevalence of harassment in the workplace and the inadequacy of many employers’ responses to such incidents​.

The emphasis of this law is not only on responding to complaints but ensuring that systems are in place to prevent harassment before it happens. Employers must implement measures such as anti-harassment training, clear reporting mechanisms, and policies that foster a safe and respectful work environment. They will also be expected to monitor these measures regularly to ensure their effectiveness. With the EHRC holding direct enforcement authority, businesses can no longer afford to take a reactive stance on harassment issues.

2.  Employment (Allocation of Tips) Act 2023, commonly referred to as the "Tipping Act."

On 1 October 2024, the law aims to ensure that all tips, gratuities, and service charges paid by customers are distributed fairly and transparently among workers. Here's an overview of the key provisions:

• Fair Distribution of Tips: Businesses will be required to distribute 100% of qualifying tips, gratuities, and service charges to workers without any unauthorised deductions. The only allowable deductions are for tax purposes.
• Written Policy: Employers must have a written policy in place outlining how tips will be allocated among staff. This policy must be readily accessible to all workers and cover the factors used to determine how tips are shared, such as hours worked, role, and customer intention.
• Record-Keeping: Employers will also be required to keep records of all tips and their distribution for a minimum of 3 years. Workers can request access to these records to verify that they have received their fair share of tips.
• Tribunal Claims: Workers will have the right to bring claims to an employment tribunal if they believe that tips have not been allocated fairly or if the employer fails to comply with the record-keeping or policy requirements. Employers found to be in violation may face compensation claims of up to £5,000.

3.  Strengthened Employment Rights: A New Era for Worker Protections

Equally significant is the Employment Rights Bill, a crucial part of Labour’s “New Deal for Working People”, expected to be introduced by 12 October 2024. This bill introduces a range of important reforms aimed at improving job security and fairness for workers across the UK. The reforms include:

• Day 1 Unfair Dismissal Rights: Employees will gain protection from unfair dismissal from their very first day of employment. Although probationary periods will still exist, workers will have more security against arbitrary or unjust termination, enhancing job stability for many​.
• Banning Exploitative Zero-Hours Contracts: The bill includes measures to eliminate exploitative zero-hours contracts, which often leave workers with little job or financial security. Under the new law, workers will be entitled to contracts reflecting their average hours, giving them more predictability in their work schedules and earnings​.
• Flexible Working by Default: Flexible working arrangements, which gained prominence during the pandemic, will become a right from the first day of employment. This change acknowledges the growing demand for work-life balance and ensures that employees can request flexible working without needing to justify it as a special accommodation​.
• Fire and Re-Hire Restrictions: The bill will also curb the controversial practice of "fire and re-hire," where employees are dismissed and then rehired on less favourable terms. This practice, which has been widely criticised, will face tighter regulations to ensure workers are treated fairly during restructuring or downsizing​.
• Enhanced Union Rights: Workers’ rights to organise and participate in union activities will also be bolstered, improving union access to workplaces and strengthening collective bargaining​.

4. The Implications for Employers

These sweeping reforms reflect a shift towards a more protective stance on employee rights and well-being in the UK. Employers must now take proactive steps to ensure their workplaces comply with these new regulations. For example, businesses need to review their existing anti-harassment policies and training programmes and tipping policies to ensure they align with the new duties under the Worker Protection Act and the Tipping Act. Moreover, companies should assess their contract practices, particularly regarding zero-hours arrangements, and make the necessary adjustments to comply with the new rules.

The shift towards flexible working as a default right will also require employers to rethink traditional work models and create more adaptable schedules that accommodate the needs of their workforce. Meanwhile, those engaging in restructuring should be particularly mindful of the new fire and re-hire restrictions, as failure to comply could result in legal challenges.

In summary, the October 2024 changes to UK employment law mark a pivotal moment for both workers and employers. The Worker Protection Act will hold businesses accountable for preventing harassment, the Tipping Act will clearly define employer obligations and the Employment Rights Bill will introduce new standards of fairness and flexibility in the workplace. Employers who act now to comply with these reforms will be well-positioned to navigate this new legal landscape, while workers can look forward to increased protections and security.

For our lovely HR Pulse clients, rest assured, all our resources, tools and HR documents will be updated to reflect the latest changes in employment law.  

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