UK Employment Law Coffee Break: Budget, actions for employers in March/April, and supply chains webinar

Spring Budget 2024 

The Spring Budget 2024 focused on making some tax cuts for working people, making a cut to the main rate of employee national insurance by 2p, from 10% to 8%, from 6 April 2024. A cut of 2p from the main rate of self-employed national insurance was also announced, meaning that from 6 April 2024 the main rate of Class 4 NICs for the self-employed will be reduced from 9% to 6%. 

The other change of interest to working families is the High Income Child Benefit Charge which will see the threshold raised from £50,000 to £60,000 to help support working families with the cost of living. The rate at which it is charged will also be halved, so that it will be 1% of the child benefit for every £200 of income that exceeds £60,000 (rather than £100) meaning that child benefit is not fully withdrawn until individuals earn £80,000 or higher. Employees may be interested in claiming child benefit or restarting child benefit payments if they have previously opted out. See the new guidance available. 

There will also be a consultation on changing the child benefit system by April 2026, assessing the high income child benefit charge based on household income rather than individual earnings; although we are still awaiting the date of the next general election which is due to be held at the latest by January 2025 and which will potentially have an impact on future commitments. 

Spring Budget 2024 has not seen as many announcements immediately affecting employers as recent budgets have, but the government's focus appears to remain on measures to support the long-term sick and disabled and the long-term unemployed. This desire to encourage these workers, as well as the older economically inactive, back to work is supported by other measures such as carer's leave and the day one right to flexible working, due to come into force this April (see below). 

Employers will also need to remain alert to the needs of a more diverse workforce and ensure managers address any issues around capability and performance sensitively, and ensure that reasonable adjustments are introduced accordingly. As employers seek to recruit and retain skilled employees, consideration should also be given to what benefits will be most attractive to employees at different stages in their working lives, for example, flexible working opportunities, pension contributions, fertility benefits, childcare support, and health and dental insurance. 

Please see our tax team's update on the Spring Budget. 

Actions for employers in March/April 

With a number of new employment rights, as well as adjustments to existing entitlements, coming into force in April, employers will need to ensure that they are aware of the changes and have taken the necessary steps to reflect them in any processes and policies, as well as training for staff and managers. 

March and April will also see some employees, and other individuals with whom businesses engage, such as customers and suppliers, observing religious holy days and festivals; appropriate accommodations will need to be carefully considered and addressed sensitively, reflecting individual needs.

Religious festivals 

With a number of religious festivals taking place during coming months, employers should anticipate requests around accommodating different working hours and flexible working, as well as employees seeking to take annual leave; where a request cannot be accommodated, clear and objective business reasons should be given and any reasonable alternatives considered. It will be important to ensure that a fair system is in place for granting leave where a number of requests coincide, ensuring that any decisions do not put particular employees at a disadvantage. 

As well as ensuring employees are educated about what different religious festivals involve, it will be important to ensure up-to-date policies are in place which recognise religious beliefs and that seek to prevent less favourable treatment that may be connected with such beliefs. For example, where employees are observing Ramadan, managers should be reminded of the potential impact that fasting may have in terms of sleep, food and drink deprivation, particularly towards the end of the day. Employees should also be excused if they wish from team and client entertainment events. Undue disciplinary action or penalties imposed on an employee suffering such symptoms leaves an employer vulnerable to claims of religious discrimination, and potentially constructive dismissal. Employers should also consider any health and safety risks and where appropriate conduct a risk assessment and agree any actions with an employee. 

New statutory compensation limits on termination 

The following increases to the statutory tribunal compensation awards have been announced – these include that the maximum amount of a week's pay for the purpose of calculating a redundancy payment will increase to £700 and maximum amount of the compensatory award for unfair dismissal will increase to £115,115. These new rates will apply to terminations taking effect on or after 6 April 2024. 

Round-up of other statutory changes

• National minimum wage rates
  From 1 April 2024, new national minimum wage rates come into force. The national living minimum wage will also apply to workers who are 21 (at present a worker must be 23 to qualify). The new rates are set out in our previous update.
   
• Holiday
  Holiday pay for irregular and part-year workers will be calculated at an hourly rate of 12.07% (effectively reversing the Supreme Court decision in Harpur v Brazel), subject to a maximum of 28 days a year. Rolled-up holiday pay will also be permitted from this date for irregular and part-year workers. 
   
• Paternity leave and pay
  Changes to statutory paternity pay and leave are due to come into force on 8 March and will take effect in relation to children whose expected week of childbirth starts after 6 April 2024 and children whose expected date of placement for adoption or expected date of entry into Great Britain for adoption is on or after 6 April 2024. 
  The changes relate to how the existing entitlement to two weeks of statutory leave can be taken, the period within which that leave must be taken, together with changes to the requirements relating to notice and evidence of entitlement. 
  While the regulations making changes to the existing regulations on paternity pay have been passed, the regulations making changes to the leave requirements itself are still in draft but are expected to be passed imminently. 
   
• Flexible working
  From 6 April 2024 the statutory right to request flexible working becomes a "Day One" right.
  While further proposed changes to the flexible working regime are also expected to come into force imminently, we are still awaiting regulations bring these changes into force and will provide a further update once we have clarification. These changes will also be accompanied by the revised Acas Code of Practice on flexible working requests.
   
• Carer's leave
  From 6 April 2024, employees will have a right to take up to one week's unpaid leave a year to care for a qualifying dependant. This is a "Day One" right.
   
• Enhanced protection on redundancy for those taking family leave
  Draft regulations provide that from 6 April 2024 there will be an extension of protection from redundancy which provides for an employer to offer employees suitable alternative employment before others for employees who are pregnant and for those who have taken a period of maternity leave, adoption leave or shared parental leave.
  We are waiting for these regulations to come into force.
   
• Statutory sick pay
  From 6 April the rate of statutory sick pay will increase to £116.75 per week.
   
• Statutory family leave pay rates
  From 7 April the rates of statutory maternity, paternity, adoption, shared parental and parental bereavement pay will increase to £184.03 per week.

Actions for employers

Employers should now consider what policies now need to be adapted or introduced in light of the changes, as well as ensuring that managers are aware of the new rights and entitlements and that these are built into employment practices to minimise the risk of related legal claims. For further detail on the impact of these developments and related actions, please see our earlier Coffee Break. Please contact your usual Osborne Clarke contact to discuss how we can support you in implementing and embedding these changes into your organisation. 

Last week we also reported on the government's response to the consultation on dismissal and re-engagement and its revised draft Code of Practice and also the latest guidance from the Equality and Human Rights Commission on menopause in the workplace. Employers should now consider these guidelines and take appropriate steps.

Webinar: Enforcement in staffing supply chains

Tuesday 19 March 2024, 12:30-13:30 GMT

We are delighted to invite you to the latest webinar in collaboration with Giant Group, providing an update on what we are seeing in terms of HMRC's recent ramping up of enforcement in staffing supply chains. Topics will include IR35, agency tax legislation, expenses, who is affected and how, and top tips looking ahead. The webinar will be a 40 minute discussion between our expert speakers, followed by a Q&A session.

Register now >