Key items for your agenda in 2024
Our standout items
What’s happening?
The UK’s FCA is considering the responses to its recent consultation on the introduction of new D&I related rules. Under the proposals, all firms would be required to report annually on their employee numbers and comply with new rules incorporating non-financial misconduct into the FCA’s Handbook.
In addition, the UK Government is introducing a new positive duty on employers to take reasonable steps to prevent workplace sexual harassment. Employers who fail to do so could face a 25% uplift in compensation if an employee brings a successful claim.
What does this mean for me?
The FCA rules would affect all FCA authorised firms, but the main impact would be for “larger firms” (broadly > 250 employees) which would be required to comply with a wider range of rules. These would include a requirement to prepare a D&I strategy, set targets, make additional disclosures and adopt related governance requirements. The FCA intends to publish a policy statement with finalised rules in 2024. The rules are expected to come into force 12 months after that date (likely in 2025).
The new positive duty takes effect from October 2024. We recommend that UK employers take steps now to prepare, including updating policies and rolling out training.
Though less wide ranging than originally envisaged in 2021, the FCA’s D&I-related proposals, rooted in the view that greater D&I can improve outcomes for consumers and the markets as a whole, will be particularly impactful for larger FCA regulated firms.
Danny Riding
Partner
EU Whistleblowing Directive
What’s happening?
The EU Whistleblowing Directive introduces various measures to protect whistleblowers, including a requirement for employers with 50 or more staff to set up internal whistleblowing channels and processes.
The UK is, of course, no longer required to implement EU directives, but has, in any event, had its own whistleblowing laws in place since 1998.
So what?
The directive had to be implemented by employers with 50 or more staff by 17 December 2023. So, all such employers in EU countries should have whistleblowing processes in place now.
We expect this new directive will lead to an increase in whistleblowing complaints in 2024.
Interestingly, some multi-national employers are choosing to set up a centralised European whistleblowing reporting hotline – a practical solution but one which requires careful consideration of issues around cross-border data transfers.
In the UK, we have seen a significant rise in workplace related investigations in recent years. We expect this trend to expand across Europe as the new EU Whistleblowing Directive gives employees confidence to raise complaints which need to be investigated and dealt with.
Ailie Murray
Partner
Other things to keep a close eye on
New European Travel Information and Authorisation System (ETIAS) and UK Electronic Travel Authorisation (ETA)
What’s happening?
Both these developments take their cue from, and are similar to, the US ESTA regime.
The ETIAS will require non-EEA visitors to participating European countries to apply for electronic authorisation before they travel unless they hold a relevant visa.
Similarly, in the UK, a new universal ‘permission to travel’ requirement (ETA) is gradually being introduced, and will require all non-UK passport holders wishing to travel to the UK (with certain exceptions relating to the Common Travel Area) to seek permission in advance unless they hold a UK visa or residence status.
So what?
The ETIAS is due to be rolled out across thirty European countries by mid-2025, at which time all visitors travelling to those countries will need a valid ETIAS if they do not hold an EU or EEA passport or a relevant visa for the country they are visiting.
The ETA is being introduced in phases (starting with certain Middle East countries) and is expected to be in place fully by the end of 2024/start of 2025. Once it is in operation, any non-British or non-Irish national coming to the UK for any purpose will need either an ETA or a visa. Crucially, this will mean that business trips to the UK will require additional advance planning, allowing time for the ETA to be processed.
Non-compete covenants in the UK
What’s happening?
The UK Government plans to limit the length of non-compete clauses in employment contracts to three months. This would be a significant change as case law currently suggests the upper limit for a senior executive is six to twelve months.
So what?
The timing on this is unknown, but we will keep you posted.
Employers are already responding to this potentially significant change – crucially, reviewing post-termination provisions (for example, non-solicitation of clients) to ensure these properly protect their businesses and also looking at other protections such as garden leave and post-termination restraints contained in incentive schemes.
Amendments are also being made to current non-compete covenants to make reference to this possible change of law.
Business transfers in the UK
What’s happening?
The UK Government has recently announced new rules to allow employers to inform and consult employees directly on a transfer of a business (or service provision change) where either (i) the employer has fewer than fifty employees or (ii) fewer than ten employees are affected by the transfer.
So what?
The new rules are expected to take effect in July 2024.
This represents a welcome change for UK employers who do not recognise a trade union and currently have to arrange for employee representatives to be elected regardless of how many employees are affected by the business transfer.
Flexible working in the UK
What’s happening?
The UK Government is planning to make the right to request flexible working a ‘day one’ right (currently employees need at least twenty-six weeks’ service). There will be changes to the flexible working request procedure, including a new duty on the employer to consult with the employee and reducing the total time for the process from three months to two months.
What does this mean for me?
The new rules are expected to take effect in April 2024.
UK employers are likely to see an increased number of requests, and our recommendation is that steps are taken now to update policies and roll out training.
Family friendly rights in the UK
What’s happening?
The UK Government is introducing new rights for UK-based employees to take up to one week of unpaid leave per year to care for an adult dependent (carers’ leave), and up to twelve weeks’ neonatal leave if they are parents of premature babies (in addition to maternity/paternity leave). There will also be changes to give more flexibility around how and when paternity leave is taken.
So what?
These various changes are not expected to take effect at the same time. Carers’ leave changes are expected to take effect in April 2024 and neonatal leave is expected to take effect in April 2025. The timing for changes to paternity leave is unknown.
UK employers should update their policies and procedures to reflect the new leave rights and notify employees of their rights in due course.
