Significant changes in the laws governing work are underway - some of which could have a considerable impact on the third sector, as lawyer Daniel Gorry explains

Sweeping changes to employment laws are coming into play. They affect pay, holiday entitlement, flexible working and redundancies. New rules around sexual harassment will soon become law too. And charities cannot afford to take their eye off the ball.

Indeed, charities and social enterprises - owing to the ways in which many work, particularly in sectors such as care - need to be more vigilant than most to ensure they do not inadvertently find themselves on the wrong side of the law. Because doing so could have costly consequences at a time when funding is, in the politest of terms, challenging. 

It’s important that all employers understand what’s happening - and when - over the course of the rest of this year. And it could pay dividends to seek professional advice if you are unsure about anything.

What’s happened already?

New laws took effect on 1 January. They include how to calculate holiday pay for part-year and irregular hours workers, including those whose hours fluctuate weekly. And these changes apply to holiday years beginning on 1 April.

Crucially, these rules confirm that the first four weeks of holiday pay for all workers should be based on their “normal remuneration” and include elements such as regular overtime, commission and other work-related allowances.

The January changes also confirmed new staff transfer rules under TUPE. From 1 July - where the employer has fewer than 50 employees or where the transfer involves fewer than 10 employees - employers will have the option of informing and consulting with the transferring staff directly rather than via employee representatives, if no existing representatives, such as a recognised trade union, are in place.

On 1 April, the National Living Wage increased by £1.02 per hour to £11.44. Significantly, that rate now applies to all workers aged 21 and over. Previously the National Living Wage rate applied to workers aged 23 and over.

There was also a £1+ per hour increase to the apprentice and young worker rates (up to £6.40) and the development rate for 18-20 year olds (up to £8.60).

The increases are good news for employees in minimum wage level roles struggling with the cost of living. But they will see significant cost increases for employers who pay at minimum wage levels, which charities would be wise budgeting for.

This is a big month which has also seen:

• The right to make a flexible working request becoming a day one right (currently you must be in post for 26 weeks). Employees also have the right to make two requests in any 12 month period rather than one. The timescales for employers considering the requests have decreased from three months to two and employees no longer have to explain the impact their request will have. Employers are still entitled to refuse a flexible working request by relying on one or more of eight possible reasons set out in the regulations.
• Carers have a statutory right to one week’s unpaid carer’s leave a year. Employees who are providing - or arranging care for - a dependent with a long-term care need can take the leave in either individual days or half-days up to a block of one week.
• Family-friendly protection from redundancy has been extended so that pregnant employees will be entitled to priority over any suitable alternative vacancies if they are selected for redundancy. This applies from the point they tell their employer that they are pregnant. Previously that priority was for parents on maternity, adoption or shared parental leave. In addition, those on family leave enjoy an extended right so that it applies for 18 months after birth or placement.
• People have the option of taking paternity leave as two non-consecutive blocks at any time within the first year after birth or placement rather than the first eight weeks.

What’s still to come

September: Workers and agency workers are expected to be able to request more predictable terms and conditions of work, where there is a lack of predictability to their work pattern. They will have the right to make two applications in a 12 month period. However, a minimum service requirement of 26 weeks is expected to be required to access the right to request predictable terms. 

October: The Worker Protection (Amendment of Equality Act 2010) Act 2023 is expected to come into force, placing a duty on employers to take reasonable steps to prevent sexual harassment of their employees. To prepare for this, we suggest that all employers consider implementing a policy on anti-harassment and identify any staff and / or management training needs on what constitutes sexual harassment, how to detect issues, deal with complaints and support staff. If a sexual harassment claim is successful, a breach by the employer of their duty to take reasonable steps to prevent sexual harassment could result in an uplift in compensation by up to 25%.

And looking even further ahead, we expect that in April of next year that there will be a new entitlement to paid time off for parents whose baby needs neonatal care. Statutory neonatal care leave is expected to be capped at 12 weeks. 

All of these changes are designed to make working life better. For employers - including charities and social enterprises for whom positive reputation is vital - it’s so important to get it right. Proper preparation and staff training is undoubtedly the key to success.

Daniel Gorry is a partner in the Employment Law team at Scottish legal firm Lindsays.