Key employment law updates | September 2024

Welcome to our monthly update, where we share upcoming changes to employment law.

Right to request four-day working week

Under new government plans to increase flexible working, full-time workers' rights to request a four-day working week could be strengthened. Whilst employees would still have to work their full hours to receive their full pay, they could request to compress their contracted hours into a shorter working week. The four-day week being discussed would allow someone to work 10 hours a day for four days instead of working eight hours a day for five days.

Of course, employees do already have the right to request flexible working, and employers can turn them down providing they deal with the request in a "reasonable" manner and "have a good business reason for doing so".  It is not yet clear what the government plans to strengthen workers' rights will entail, however further details are expected in the Autumn as part of its "New Deal for Working People".

Right to disconnect

Labour has promised, as part of its "New Deal for Working People", to introduce a "right to switch off" in order to prevent employers routinely contacting their employees outside of their normal hours. The aim of this is to allow employees time to rest outside of their working hours, to ensure the lines between work and home life are not blurred, and to ultimately boost productivity in the workplace. This right to disconnect already exists in other European jurisdictions, such as Ireland and Belgium, and ministers are reportedly exploring these models.

Consistently contacting an employee outside of their agreed normal working hours, and therefore breaching employment conditions, could lead to a possible tribunal claim. However, the government has noted that different sectors will have different needs and these plans are not a "one size fits all" approach.

1 October 2024: New tipping law coming into force

From 1 October 2024, the new Tips Act (Employment (Allocation of Tips) Act 2023) comes into force to improve transparency and fairness in the allocation of tips. Under the new law, employers will need to allocate the total amount of "qualifying" tips between workers fairly.

Alongside the Tips Act, a statutory Code of Practice on Tipping will set out greater detail on the principles of fairness and transparency to which employers must have regard when allocating tips. The Code is expected to set out instances where it would be fair for tips to be allocated disproportionately and how employers should avoid discrimination in allocating tips.

The Tips Act also requires employers to maintain a written policy on tipping and allocation unless tips are only received occasionally and exceptionally. In these workplaces, employers will also be required to have clear record keeping of tips and allocation. 

Asda employees to begin equal pay case

Over 60,000 current and former Asda employees have brought a case before the employment tribunal regarding equal pay, making it the largest-ever private sector equal pay claim. Those behind the claim argue that retail work, such as checkout operators and shop floor staff, which consists of predominantly women, is of equal value to Asda as warehouse work. This case follows a recent tribunal ruling involving more than 3,500 current and former Next workers (see below), which found that retail staff should not have been paid at lower rates than warehouse staff.

An Asda spokesperson has said that it respected the right of staff to bring the case but "strongly rejects" claims that pay rates are influenced by gender. The ruling of this case is expected in 2025.

FCA's annual whistleblowing report published

On 5 September 2024, the FCA published its latest annual report covering whistleblowing disclosures made to it between 1 April 2023 – 31 March 2024 under the Prescribed Persons (Reports on Disclosures of Information) Regulations 2017 (SI 2017/507).

A summary of the key points from that report are as follows:

• The report shows that the FCA received 1,124 new whistleblower reports covering 3,094 allegations. This reflects the pre-existing trend of the number of reports made to the FCA which has been rising slightly since 2020.
• The top ten allegations related to (in order from most frequent to least frequent): compliance, fitness and propriety, culture of the organisation, consumer detriment, systems and controls, fraud, Consumer Duty, treating customers fairly, unauthorised business and anti-money laundering.
• The online reporting form is the most popular reporting channel for whistleblowers followed by email and telephone. Most whistleblowers provided their identity while one-third reported anonymously.
• The FCA has updated its approach to whistleblowing. A new web form was launched earlier in the year to improve the data and information collected from whistleblowers at the start of the process. The FCA hopes this will strengthen its ability to take action. The FCA makes it clear that protecting whistleblowers' identities is its main priority, but it plans to use the whole whistleblowing dataset to better understand emerging trends.

The Publication of the annual report comes against the backdrop of FCA commitments to improve its approach to non-financial whistleblowing in response to the "Sexism in the City" inquiry by the House of Commons Treasury Select Committee. While the FCA's annual report shows a steady increase in the number of reports made, questions remain as to how the FCA will ensure that whistle blowers reporting non-financial misconduct will be supported and protected. Non-financial misconduct looks set to be a priority for the FCA for the foreseeable future after the difficulties it has faced in handling such reports in the past (see commentary by Claire Holland here). Last year, a consultation was published by the FCA setting out proposals to strengthen its approach to non-financial misconduct and improve diversity and inclusion in the financial sector (which we reported here). We await the FCA's full response to the consultation.

The government's decision to scrap the right to predictable hours

The government, for now, has decided to scrap the right for workers to request predictable hours. The previous Conservative government had introduced the Workers (Predictable Terms and Conditions) Act 2023 with the aim to give workers with uncertain hours a right to request predictability in respect of their working days and times, the number of hours worked, and the length of their contract. The Act was intended to address the imbalance of workers on zero-hour contracts or with other atypical working arrangements.

However, the Act had been described as "toothless" and the current government still intend to bring more security and certainty for these workers, with some provisions likely to feature in the upcoming Employment Rights Bill and Make Work Pay programme. It is not clear what this new right will look like, but it is expected to be more robust than the (now scrapped) Act's protections.