UK Employment Legislation Round-up

We previously wrote about the flurry of new employment law bills introduced to UK Parliament this year. Two of those employment law bills have now become law – 1) the Workers (Predictable Terms and Conditions) Act 2023 and 2) the Pensions (Extension of Automatic Enrolment) Act 2023.

Workers (Predictable Terms and Conditions) Act 2023

The Workers (Predictable Terms and Conditions) Act 2023 introduces a new statutory right for workers and agency workers who have a lack of predictability in relation to any part of their working pattern to request a predictable working pattern, subject to meeting qualifying criteria. This right is intended to cover casual and “atypical” workers, for example those on zero-hours contracts or fixed-term contracts with a term of less than 12 months.

Workers will be able to make two formal statutory requests per year, and the application process will be similar to the existing flexible working framework. Employers will be obliged to deal with the requests and notify the worker of the outcome. Requests may be refused on the basis of one of the specified grounds in the Act, for example if the change in working pattern would have a detrimental impact on the employer’s business. These are similar to the grounds in the existing flexible framework but are slightly more limited in number.

This new right will not come into force until regulations are made to specify further detail, including the minimum service requirement (which is expected to be 26 weeks), and to bring operative provisions into force. It is anticipated that it will come into force in Autumn 2024 at the earliest, in order to give employers time to prepare.

Acas has also prepared a new code of practice to give guidance on making and dealing with predictable terms and conditions requests – a draft was published on October 25 and is open for consultation until January 2024.

See here for more detail on the recent updates to the flexible working regime and what employers need to know, and here for our thoughts on the growing shift towards employees’ gaining greater control and flexibility over their working hours.

Pensions (Extension of Automatic Enrolment) Act 2023

The Pensions (Extension of Automatic Enrolment) Act 2023 has also just passed into law and aims to boost pension savings by UK workers by extending the existing auto-enrolment regime.

Currently all employers are required to automatically enroll certain eligible workers into a qualifying occupational or personal pension scheme. The new Act introduces powers for regulations to be made to:

  • reduce the lower end of the age threshold for eligible workers – currently only workers who are at least 22 years old must be automatically enrolled. It is anticipated that this threshold will be reduced to 18 to enable pension saving from the start of most peoples’ working lives; and
  • to reduce or abolish the lower end of the qualifying earnings band so that pension savings are calculated from the first pound earned (currently auto-enrolment pension contributions are only calculated on earnings between £6,240 and £50,270 for the 2023/24 tax year).

However, the Act does not make any changes to the minimum earnings threshold a worker must meet in order to qualify for automatic enrollment into a pension scheme. Currently employers do not need to automatically enroll into a pension scheme any workers earning less than £10,000. This means that, even if regulations are passed to reduce or abolish the lower end of the qualifying earnings band, it will only affect employees with qualifying earnings of at least £10,000.

Once in force, these changes could open up workplace pension savings to a greater number of people and allow contributions to be based on a greater proportion of earnings – potentially from the first pound of salary. However, the Act requires a period of consultation prior to enacting any regulations to bring these changes into force. It is not yet known when these regulations will be made.

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.