Legal changes for your business to look out for in 2024

So, let’s get into the details. What are some of the key legal changes looming in 2024?

1. Companies House Reforms

The Economic Crime and Corporate Transparency Act (ECCTA) received Royal Assent in 2023 and will come into force on a staggered basis over the next 18 months or so. The ECCTA gives Companies House enhanced abilities to verify the identities of company directors, remove fraudulent organisations from the company register and share information with criminal investigation agencies. The Companies House changes will include:

1. Greater powers for Companies House to query information, stronger checks on company names, new rules for registered office addresses, and new lawful purpose statements;

2. Requirements for anyone setting up, running, owning or controlling a company in the UK to verify their identity;

3. Transitioning towards filing accounts by software only, and changes to small company accounts filing options;

4. For confirmation statements, new requirements to provide a registered email address and to confirm that the future activities of the company will be lawful; and

5. Increases to Companies House fees.

Keep an eye out for announcements from Companies House about when the reforms will come into effect.

The ECCTA also introduces a new offence of failure to prevent fraud, with harsher penalties for companies that profit due to fraud committed by their employees/agents. The Government still needs to publish guidance on what will be considered reasonable fraud prevention procedures, then the offence will come into force. The offence will only apply to large organisations, but as stated in the Government guidance, SMEs are often the victims of fraud by larger companies, so this offence is relevant to SMEs too.

2. Consumer Rights

The Digital Markets, Competition and Consumers Bill was carried over to the 2024 Parliamentary session, but is expected to become law during the course of 2024. The Bill includes the following proposed legal changes to enhance consumer protections:

1. Subscriptions: for subscription-based contracts, new rules will mean that consumers must be provided with clear information (e.g. about the minimum duration of a subscription) prior to entering a subscription contract, and must be able to exit the subscription via a straightforward process (using a single communication). Businesses must also send reminders in a prescribed form to consumers, reminding them that a free or discounted trial period is coming to an end, or their contract is due for renewal.

2. Fake reviews: platforms will be prohibited from commissioning fake reviews. In addition, an obligation will be imposed on platforms to take reasonable and proportionate steps to ensure that the reviews they display are genuine.

3. CMA powers: new powers for the Competition and Markets Authority (CMA) to enforce consumer protection laws directly and to impose higher fines on businesses that fail to comply with the law.

The Bill also includes a number of changes to UK competition law.

Businesses should undertake a watching brief on the passage of the Bill, and in preparation, they should review their consumer terms and sales practices (especially where subscription-based models are used).

3. Online Safety

The Online Safety Act came into force in 2023 and made Ofcom the regulator for online safety. The Act will bring into force laws that apply to online businesses providing “user-to-user” services (e.g. social media sites, dating apps and online gaming platforms) and “search services” (e.g. search engines or other online databases).

The new laws haven’t come into effect yet and will come into effect in a staged way, starting in 2024. The new rules will include requirements for these types of online businesses to:

1. assess the risk of harm from illegal content;

2. assess the particular risk of harm to children from harmful content (if children are likely to use the service);

3. take effective steps to manage and mitigate the risks they identify in these assessments – Ofcom will publish codes of practice they can follow to do this;

4. in their terms of service, clearly explain how they will protect users;

5. make it easy for users to report illegal content, and content harmful to children;

6. make it easy for users to complain, including when they think their post has been unfairly removed or account blocked; and

7. consider the importance of protecting freedom of expression and the right to privacy when implementing safety measures.

You can subscribe to Ofcom for updates about when the laws will come into effect and codes of practice that can be followed.

4. Flexible Working

All employees who have worked for their employer for 26 weeks or more currently have the right to ask if they can work flexibly. A new change in the law will make this a right that applies from the first day of employment (a day one right).

The Flexible Working (Amendment) Regulations 2023 received Royal Assent in 2023, and will come into force on 6 April 2024. Watch out for Acas’ new code of practice on flexible working that will be published in 2024, with guidance for employers on how to navigate the new flexible working rules.

Other changes to flexible working (under the Employment Relations (Flexible Working) Act 2023) are also due to come into force in 2024. These changes are expected to coincide with the day one right coming into force, but an exact date has yet to be confirmed. These changes include:

1. new requirements for employers to consult with the employee before rejecting their flexible working request;

2. permission for employees to make two statutory requests in any 12-month period (rather than the current one request);

3. reduced waiting times for decisions to be made (within which an employer administers the statutory request) from three months to two months; and

4. the removal of existing requirements that the employee must explain what effect, if any, the change applied for would have on the employer and how that effect might be dealt with.

5. Other Employment Law Changes

1. Carer’s leave - The Carer’s Leave Act 2023 will come into force on 6 April 2024 and introduces a statutory right for employees who are carers to take up to a week’s unpaid leave to care for a dependent in any 12-month period.

2. Enhanced redundancy protection - from 6 April 2024, the Maternity Leave, Adoption Leave and Shared Parental Leave (Amendment) Regulations 2024 will extend current protections from the point someone tells their employer they are pregnant, and also extend it for a period following their return to work. The protections mean that, before making an employee on maternity leave, shared parental leave or adoption leave redundant, employers are obliged to offer them a suitable alternative vacancy where one exists in priority to anyone else who is provisionally selected for redundancy.

3. Holiday pay calculations - The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 comes into force on 1 January 2024, with the changes it introduces taking effect from April 2024. The Regulations introduce changes to the way that holiday is calculated and paid for part-year and irregular hours workers. Those workers won’t automatically be entitled to 5.6 weeks holiday each year and instead, will accrue holiday at a rate of 12.07% of the hours they work.

4. Right to request predictable working patterns - The Workers (Predictable Terms and Conditions) Act 2023 will give workers and agency workers the right to request a predictable work pattern if they meet certain criteria, including a minimum length of service. If a worker's existing working pattern lacks predictability in terms of the hours they work, the times they work or the length of their contract, they will be able to make a formal request to change their working pattern to make it more predictable. The law is expected to come into force in Autumn 2024.

5. Duty to prevent harassment - The Worker Protection (Amendment of Equality Act 2010) Act 2023 introduces a new duty on employers to take reasonable steps to prevent sexual harassment of their employees.

6. Neonatal care leave - The Neonatal Care (Leave and Pay) Act 2023 introduces a right for parents to take 12 weeks’ leave and pay when their baby requires neonatal care, in addition to existing parental leave entitlements. The law is expected to come into force in late 2024.

7. Non-compete clauses - following a consultation, the government announced in May 2023 its intention to limit non-compete clauses in employment contracts to 3 months. Implementing legislation will be introduced “when Parliamentary time allows”.

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