Employment & Incentives Legal Outlook 2024
Key topics to prepare for in 2024
Explore the topics in the publication
2024 is set to be a year of change on many fronts for workplace rights. Reforms to annual leave rights, TUPE, flexible working and family-related rights all take effect in the first half of the year, together with a new code of practice on dismissal and re-engagement. Workplace culture will be influenced not only by the ever-increasing prevalence of artificial intelligence but also by developments in the EU on pay transparency and new standards in the financial services sector on workforce diversity metrics. The backdrop to these developments is the uncertainty of how established employment rights will be understood following implementation of the Retained EU Law (Revocation and Reform) Act 2023.
Companies implementing ongoing policies and preparing remuneration policies and reports for shareholder approval in 2024, will be doing so in a similar environment as in 2023. Concerns about windfall gains, use of ESG metrics and comprehensive disclosure persist.
There is pressure to guard against what may be regarded as unjustifiably high levels of pay, and to show restraint on overall quantum. But there is also pressure to take certain factors such as company sector and size and global operations into account. 2024 may see a move towards non-standard benchmarks where appropriate, for example where there are industry-specific pressures on attracting and retaining talent.
In 2024 UK CRD V firms looking to change their pay structures following the bonus cap removal will need to navigate round some tricky issues. These include determining appropriate fixed/variable pay ratio(s), HR and contractual considerations in particular for role-based allowances, shareholder approval, governance, and gender pay gap impact. For ‘small CRD V firms’ within the new proportionality levels, some pay and disclosure rules have been relaxed, though application to groups may be complex. And regulators are exploring how to move beyond disclosure-based initiatives for factoring climate and environmental risks. A focus on remuneration policies generally and appropriate ESG metrics is likely.