UK Employment Law Forecast: Emerging Challenges and Trends for 2024

We have previously written in detail about the key legislation to be implemented in the United Kingdom in 2024 and considered the changes employers must grapple with this year. In this article, we take a step back to look at some of the key employment law trends and challenges that UK employers are likely to face over the coming year and how best to be ready to deal with them.  

We expect that companies’ primary focus may be on more universal issues, particularly given the challenging economic, political, and cultural environment that 2024 brings. However, it will be important for employers to be ready to react to the specific legislative changes coming in and the developing legal position, particularly as we anticipate a corresponding increase in requests and challenges from employees as a result of these changes.

1) Facing uncertainty from outside

Employers will be facing uncertainties and shifts brought about by legal, political and economic change and uncertainty. We predict the following three areas are likely to have the most impact on UK employers this year:

The impact of the Retained EU Law (Revocation and Reform) Act 2023 (“REULA”)

We have written throughout 2023 about the likely impact of REULA on employment law as it comes into force. The main impact of REULA is legal uncertainty. REULA is notoriously complex, and issues of interpretation of laws derived from Europe will need to be battled out in the courts because previously settled questions could be reopened as new facts and circumstances arise.

The government has also decided to write certain principles into legislation (such as in respect of discrimination and holiday entitlements—see here, here and here) to save workers’ rights that might otherwise have be lost due to the operation of REULA. The government considers that the amendments to the Working Time Regulations 1998 and Equality Act 2010 will ensure that the areas of law covered will continue to have the same effect after the end of 2023 as it did before. However, it is difficult to draft case law and principles, devoid of their factual context, into legislation without creating some uncertainty.

We will have to wait to see whether REULA and the legislation that has followed will have unintended consequences. Employers and practitioners will be watching closely to see how the case law develops in this space. Regardless, it seems likely that employers will face more (or at the very least new) challenges as a result. These changes will be outside of the employers’ control, and it may not be possible to predict how the law will be interpreted. Employers will need to ensure that policies and internal decision making keeps pace with any material developments.

A changing political landscape? The impact of an election

The UK press has been speculating when the next general election will be called, and Sunak hinted recently that it will be in the second half of this year. Regardless, it must be held by January 28, 2025. Many commentators are anticipating the possibility of a change in government based on current polling. If Labour were to win an election it will no doubt have a significant impact on the future of employment law in Great Britain, with the prospect of a “New Deal for Working People.” Some of the key developments under Labour could include: changes to unfair dismissal protection; repealing amendments to trade union laws; introducing a right to “switch off.” It seems at this stage to be too early to start preparing for such a seismic change as there are too many unknowns, however employers will need to be keeping a watchful eye on proposed policies set out in party manifestos.

Not change but more of the same – the cost-of-living crisis

Inflation and the cost-of-living crisis continue to be headline issues in the press and real live issues for many people. So, we cannot ignore the challenging economic climate facing employers. The Office for National Statistics reports in its January 2024 bulletin that from October to December 2023, the estimated number of vacancies in the UK fell by 49,000. Vacancies fell on the quarter for the 18th consecutive period, the longest consecutive run of quarterly falls ever recorded, possibly signposting an ongoing cooling in the UK job market. In response to the cost-of-living crisis, some pay increases have been reported, but largely not keeping pace with inflation and rising prices leading to a visible increase in trade union activity and widespread discussion of basic employment-related rights and working conditions. Stable employment is of paramount importance to workforces in the cost-of-living crisis.

So how can employers manage risk in changeable times?

The most practical approach is not to try to second-guess the legal, economic and political developments and to look inwards. Whenever there is wider change and uncertainty, it is likely that employers will also face some disruption internally.

For example:

  • When facing any period of change, an organisation should anticipate an increase in grievances from employees and day-to-day workforce problems. Employers should ensure that these are dealt with expeditiously and fairly in accordance with any formal procedures;
  • Economic pressures may mean that redundancy dismissals (or other cost-cutting measures short of dismissal) may be required. Again, employers shouldn’t panic and should ensure that any redundancy processes are fair, remembering that reductions in force of 20 plus, or any wider scale changes, may trigger collective consultation processes;
  • Issues such as long-term sickness and capability may come under increased scrutiny as perceived poor performance is often more aggressively managed in a challenging business environment, which can shine a spotlight on previously unmanaged issues and increase the internal workload for management and HR alike.

A focus for employers, therefore, is in ensuring HR teams and managers are prepared. Relevant staff must be confident that they can manage processes and handle any appeals and challenges particularly where there is a risk of litigation. Employers can prepare by ensuring HR teams and managers are up to date on their training, have the right support from senior leadership, and feel confident in the messages they need to deliver.

2) Cultural climate change

Flexible working continues

The COVID pandemic seems like an increasingly distant memory in the world of work, but the legacy of flexible and hybrid working remains. Whether as a direct result of the pandemic, or growing from a variety of factors, employers are facing changing expectations from their workforces. The upcoming amendments to flexible working requests and the introduction of leave entitlements such as unpaid carer’s leave reinforce this new environment. However, despite this, we are beginning to see an increased focus by employers on clarifying current hybrid working arrangements. The trend seems to be towards more employers aiming for clearer attendance expectations and reassessing the benefits from in-person attendance.

Given the impending changes to flexible working requests, employers must be consistent and proactive in balancing competing needs when responding to flexible working requests. Now is a good time to review policies and procedures. Employers can use a policy refresh as a starting point for revisiting ideas around attendance and work requirements. To avoid issues that invariably grow out of uncertainty, managers should review both broader and employee-specific arrangements, ensuring that agreements are documented appropriately and that arrangements are clear. Employers should also consider addressing employees’ specific needs; in particular, we have found that issues around mental health and neurodivergence have gained prominence in the media and are becoming increasingly relevant to employees regarding their working arrangements.

Competing cultural perspectives

Cultural divisions are increasingly reported in the press. Whether the magnitude of the dividing lines in society is being accurately reflected in the news is open to debate; however, what is undeniably true is that personal disagreements can often be the cause of employment-related headaches. It is not new for 2024 that there are divisive topics that can cause complications within the workplace. Environmental concerns, gender politics and global conflicts are all topics that can polarise opinion and employers must be careful not to police their employees’ views. However, leaving a workforce to navigate these territories alone can lead to problems. Competing rights can create tensions, and discussion of different opinions on difficult subjects can create niggles that can escalate to full blown discrimination claims. Employers in 2024 should seek to look beyond the mere legal obligations but look to create true inclusion and tolerance in its culture.

Further ahead on the horizon

As we move forward into 2024, there are both known legal transformations and the potential for significant unknown legal transformations, depending on the impact of REULA, the election and economic pressures. Cultural issues such as how workers want to balance home life with work and how employers manage that, together with handling topics of cultural division, will continue to be a significant challenge. Employers will need to face ongoing change in workplace dynamics and employee rights and be ready to adapt to the upcoming challenges by being flexible and responsive.

As the employment landscape in the United Kingdom evolves, employers will need to stay abreast of the upcoming legislative changes in 2024. Employers should proactively engage with these changes, to foster a workplace that is not only legally compliant but that also to creates a more equitable and supportive work environment. By addressing legal compliance and cultural values together, employers can reduce the risk of employee issues arising or escalating. Whilst there is a lot on the horizon to consider, there is no need to panic. The best approach is to be prepared, looking inward at the support available for those dealing with HR matters and taking a holistic view of the impact of change on the workforce in challenging times.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.