It’s a busy time for employment law, with the Government having announced three new sets of regulations which come into force over the coming weeks. Employment partner, Nick Wilson, considers the implications for business owners to help them plan ahead.

Industrial action

We have previously looked at the impact of industrial action on employers – not just those with staff taking industrial action, but the impact upon employees in businesses where no action is being taken. Earlier this year, the Government introduced The Strikes (Minimum Service Levels) Act 2023, which sought to ensure that there are minimum service levels in sectors such as emergency services, health, public transport, and education.

On 7 November, three sets of draft regulations were published: the Strikes (Minimum Service Levels: Passenger Railway Services) Regulations 2023; Strikes (Minimum Service Levels: NHS Ambulance Services and the NHS Patient Transport Service) Regulations 2023; and Strikes (Minimum Service Levels: Border Security) Regulations 2023.

The effect of the regulations is that when a trade union notifies an employer who falls within the scope of the relevant regulation, that its member employees will be taking strike action, the employer can issue a ‘work notice’ to that union. The work notice should set out the minimum service levels including the work that needs doing and the people required to do the work during the strike. The union is then obliged to take reasonable steps to ensure that the people named in the notice do not take part in the industrial action. If the union does not take reasonable steps then any strike may lose its legal protection and be an actionable tort in law – a tort amounts to a civil liability where a party is in breach of obligations imposed by the law.

An employee who is named in the work notice, but who takes part in industrial action in breach of the notice, will not be protected from being automatically unfairly dismissed for taking part in industrial action. However, they may still be able to bring an ‘ordinary’ unfair dismissal claim.

It is envisaged that these regulations could be in force this year and may coincide with planned industrial action by members of several rail workers’ unions in December and into the New Year. We will see what impact, if any, the regulations have on strike action and whether disruption to services and other businesses is minimised.

Holiday pay

The new year sees the introduction of the Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023. Whilst the regulations deal with a number of matters, we’re focusing on the calculation of holiday pay.

As a result of Brexit and higher courts’ powers not to follow retained EU law, the new Regulations seek to ensure that the calculation of statutory holiday pay is simplified, which, for some employers, may be a blessing.

There are two components to annual leave entitlement in England and Wales. The first four weeks is derived from the EU Working Time Directive (which the UK implemented as the Working Time Regulations (WTR)); the additional 1.6 weeks was introduced by the Government under the WTR.

For many years, different rules have applied for how to calculate holiday pay. However, from 1 January 2024, when calculating holiday pay for the first four weeks, the calculation must be based on the worker’s normal pay and include the following:

• Payments, including commission, intrinsically linked to the performance of tasks which a worker is contractually obliged to carry out;

• payments for professional or personal status relating to length of service, seniority or professional qualifications; and
• payments, such as overtime payments, which have been regularly paid to a worker in the previous 52 weeks.

There are no changes to the additional 1.6 weeks where basic pay can be paid when the worker takes annual leave (subject to exceptions), although most employers already pay their workers the same rate of pay across the full 5.6 weeks, so the application of these changes may be limited.

Another notable feature of the regulations is that of permitting the concept of ‘rolled-up’ holiday pay. This allows employers to pay holiday pay by way of 12.07% uplift to the normal rate of pay. Workers can still take annual leave but they will be paid for that leave via the sum rolled up into their pay. Such arrangements were generally unlawful, as they acted as something of a disincentive for workers to take annual leave with the resultant health and safety concerns.

It should be noted that rolled up holiday pay will only be permitted for workers with irregular hours of work, or those who work only part years. This change also applies for annual leave years that begin on or after 1 April 2024.

Discrimination

Draft Equality Act 2010 (Amendment) Regulations 2023 have been published to deal with law which may have fallen away as a result of Brexit and the UK no longer following all EU law. The regulations seek to reproduce EU law relating to the following areas:

• Direct discrimination related to pregnancy, maternity and breastfeeding;
• indirect discrimination where a person without a relevant protected characteristic suffers substantively the same disadvantage as those with that protected characteristic;
• direct discrimination in the context of access to employment and occupation as regards public statements outside a recruitment process;
• the right to equal pay where employees’ terms are attributable to a single source (Article 157 of the Treaty on the Functioning of the European Union1 ); and
• the definition of disability in relation to employment and occupation.

The regulations are due to come into force on 1 January 2024 and once we have digested the detail, we will look at them in greater detail.

For help and advice on these and other employment law matters, please get in touch with our friendly team on (01482) 325242 or email nick.wilson@andrewjackson.co.uk