Employment law

A new EU Whistleblowing Directive is now in force, setting minimum requirements for whistleblowing policies and protections across the EU. As of 17 December 2023, the directive now applies to businesses in Europe with 50 or more employees. While the directive does not apply in the UK, in-scope businesses should be considering their global whistleblowing policies to ensure compliance, as well as delivering whistleblowing "speak up" training for staff and "listen up" training for managers on how to handle complaints. 

The focus on whistleblowing and "speak up" reflects a wider expectation from regulators, investors and the media that workplace complaints, on issues such as bullying and harassment, are escalated and properly investigated.

The UK already has mandatory gender pay gap reporting for large employers (250+ employees). A new EU Pay Transparency Directive will introduce an EU-wide gender pay gap reporting regime from 2026, with stronger enforcement mechanisms. If there is a gender pay gap of 5 percent or more, employers will be required to conduct a joint pay assessment with their workers' representatives and EU member states will be required to introduce penalties for employers that break the rules. While the directive will not apply in the UK, UK businesses with operations in Europe may be caught. The directive will initially require annual reporting for businesses with 250+ employees and reporting every three years for businesses with 150+ employees.

In the UK, the Government is encouraging voluntary ethnicity pay gap reporting and a Labour Government would introduce mandatory ethnicity and disability pay gap reporting for large businesses.

From 26 October 2024, employers in the UK will come under a new positive duty to take reasonable steps to prevent workplace sexual harassment. This new duty will apply to all employers regardless of their size or sector. Failure to do so could expose the employer to an uplift in compensation of up to 25 percent in a successful claim or – even where there is no claim – potential enforcement action by the Equality and Human Rights Commission (EHRC).

The EHRC is updating its statutory guidance to take account of the new duty but employers should begin preparing now by reviewing anti-harassment policies and training, thinking about implementing a standalone sexual harassment policy and also considering a wider culture audit to identify risk areas. For more information, please see our briefing on the new duty.

On 6 April 2024, a number of changes to flexible working and family friendly rights will come into effect:

• the right to request flexible working will become a "day one" right and employers will have a shorter period to respond to requests;
  
  
• a new right to unpaid carer's leave will come into force for employees with caring responsibilities;
  
  
• redundancy protection will be extended for pregnant employees and employees returning from maternity, adoption or shared parental leave; and
  
  
• changes will be made to the way statutory paternity leave is exercised.

Employers should ensure their flexible working and family friendly policies are updated to reflect the changes. For more details of the changes see our January 2024 Employment Update.

A number of changes are coming into force in relation to holiday entitlement and pay for holiday years starting on or after 1 April 2024. The changes affect workers with irregular hours (such as casuals, zero hours workers and agency workers) and workers who work part of the year (such as term-time workers). For such workers, holiday will accrue at the rate of 12.07 percent of hours worked and employers will be allowed to pay "rolled up" holiday pay, by including an element for holiday pay in the worker's hourly rate. 

Additional changes to the holiday rules came into force for all workers on 1 January 2024. They confirm what additional payments (such as commission and overtime) must be included in holiday pay and the circumstances in which statutory holiday entitlement may be carried forward from year to year. 

Employers may wish to review their policies and practices on holiday and holiday pay in view of the above changes. Our November 2023 Employment Update has more details.

While the US has long taken a strict approach to competition compliance in labour markets, the EU and UK are now beginning to follow suit. No-poach agreements (where businesses agree not to approach or hire each other's employees) and wage-fixing agreements (where businesses agree to fix employees' pay or benefits) are particular areas of focus for enforcement. Please see our briefing for more details.