There are a number of possible employment-related legislative developments this year, and employers should be mindful of would could change when it comes to terms and conditions.
Employment (Allocation of Tips) Bill
This proposed Private Members Bill would create a legal obligation on employers to allocate all qualifying tips, service charges and gratuities fairly between employees and workers. Employers will also need to have a written policy which sets out how it allocates qualifying tips etc among its employees as well as requiring them to keep records – and to share these records if requested – as to how in practice qualifying tips are received and allocated. For these purposes, “tips” refers to tips which are under the employer’s control, so would include service charges added to meals but not physical cash tips, which may be given directly to the employee (which includes a worker). This also creates a payroll obligation on employers as allocated qualifying tips would need to be paid through payroll and taxed accordingly.
New code of conduct on ‘fire and re-hire’
‘Fire and re-hire’ refers to the practice of employers dismissing employees under their current terms/notice period and immediately offering them re-engagement under different (and usually less advantageous) terms. Following the mass redundancies at P&O ferries in 2022, proposals to introduce a new ACAS Code of Conduct were announced. Once the new Code comes into effect, it will require businesses to hold “fair, transparent and meaningful consultations” with employees should they wish to change terms and conditions of employment. Moreover, the courts and employment tribunals will also be required to take any new code into account when making decisions as to fairness and will also be able to award an uplift of up to 25% on compensation if an employer unreasonably fails to follow the new code. Consultation closed on 18 April 2023 and the government will now review all expressed opinions before finalising the Code. As a side, if employers are proposing to amend terms and conditions of employment and it could result in termination, remember that this could – depending on proposed numbers – trigger collective consultation obligations, so remember to take advice.
Changes to the right to strike
Proposed new legislation was announced last year – the Strikes (Minimum Service Levels) Bill. This is currently going through Parliament. Should it be passed, it will provide for minimum service levels for transport services if such services are affected by strike action. Also, there is proposed legislation in relation to public sector workers and their right to strike, for example, the fire service and ambulance drivers/paramedics. Unions have criticised the legislation claiming that it would actually lengthen the time workers strike.
Retained EU Law (Revocation and Reform) Bill
The impact of this legislation could be huge! The Retained EU Law (Revocation and Reform) Bill (the “Bill”) was announced in the Autumn of 2022. To put it crudely, the aim of the Bill was to adopt a “use it or lose it” approach to EU retained law. Government departments would have until the end of 2023 (a so-called “sunset period”) to decide if certain pieces of EU retained law should be incorporated into UK law or be repealed. To explain, “retained EU Law” is a specific category of UK law which was established under the EU withdrawal agreement as part of the Brexit transition phase. It is significant for HR as there are key pieces of legislation which impact people management and HR practices; not least being holiday and holiday pay under the Working Time Regulations 1998.
The Bill is now in the House of Lords in the ‘Report stage’. During the previous ‘Committee stage’, objections were raised, and so there are amendments tabled for this current stage – which are scheduled for 19th April 2023. The Bill could be altered after this date.
The government have set up a dashboard to check which legislation is being reviewed and the progress of the sunset period.
Next steps
Certainly, measures to change the way tips are allocated will mean major changes to businesses in the leisure and hospitality sector, as well as those who work within the sector. However, the potential impact of the Retained EU Law (Revocation and Reform) Bill could lead to huge changes – although this will depend on how far reaching the review of legislation is by government departments. As ever, watch this space!
Emma O’Connor is legal director in the employment team at Boyes Turner LLP
