In depth: The King’s speech & employment law – what you need to know

The newly-elected Labour government has set out its ambitious plans for employment law reform in the Employment Rights Bill, representing “the biggest upgrade to workers’ rights in a generation.”

The bill appears to commit to Labour’s pre-election promises contained in Labour’s Plan to Make Work Pay: Delivering a New Deal for Working People.

The bill – along with a “genuine” living wage and an Equality (Race and Disability) Bill – will end exploitative employment practices, remove the “discriminatory age bands” and will “enshrine the full right to equal pay law” for ethnic minorities and disabled people, respectively. The latter also proposes mandatory ethnicity and disability pay gap reporting to help level out pay in the workforce.

What will the Employment Rights Bill do?

• Make parental leave, sick pay and protection from unfair dismissal available from day one on the job for all workers. The government has confirmed that it will continue to ensure employers can operate probationary periods to assess new hires, but it’s not clear how these will interact with the day one protection from unfair dismissal. Time will tell.
• Ban exploitative zero-hours contracts, ensuring workers have a right to a contract that reflects the number of hours they regularly work and that all workers get reasonable notice of any changes in shift with proportionate compensation for any shifts cancelled or curtailed. This will bring an element of certainty for workers who are engaged in casual working practices. Will the government replace the Workers (Predictable Terms and Conditions) Act 2023 which aims to give all workers (including employees, agency workers and casual staff) the right to request more predictable terms and is due to come into force in autumn of this year?
• End ‘fire and rehire’ practices, whereby employers bring new changes to an employee’s contract by dismissing and rehiring on the new terms. The government has committed to introducing a new statutory code on this practice.
• Strengthen statutory sick pay by removing the lower earnings limit (£123 per week) to make it available to all workers, including those in the waiting period (the first three days of sickness absence) where SSP currently can’t be claimed.
• Make flexible working the default position from day one for all workers. Employers will be required to accommodate this “as far as is reasonable”, to reflect the modern workplace which suggests there will be provision for refusal if it is not – here comes that all too familiar term us lawyers are used to – “reasonable.”
• Strengthen the protections for new mothers by making it unlawful to dismiss a woman who has had a baby for six months after her return to work, except in specific circumstances. Whilst there is protection currently for women on maternity leave and for a period after the expected birth of their child (18 months), this proposal appears to make the protection go further and make a dismissal a potential ‘automatic’ dismissal if a woman is dismissed after six months of the expected birth of the child (with exclusions).
• Establish a Fair Work Agency, a new “single” enforcement body to strengthen the enforcement of workplace rights.
• Establish a Fair Pay Agreement initially in the adult social care sector with a view to expanding to other sectors.
• Reinstate the School Support Staff Negotiating Body, to establish national terms and conditions, career progression routes and fair pay rates.
• Update trade union legislation so it is fit for a modern economy, removing unnecessary restrictions on trade union activity such as minimum service levels.
• Introduce a regulated route to ensure workers and union members have a reasonable right to access a union within workplaces.

The government has committed to consulting with business and trade unions on its proposals, and we await the draft bill to see just how far and how many of the above proposals will go, and when they will come to fruition.

If you have any questions or queries regarding potential changes to employment law, please don’t hesitate to get in touch.

Our Legal 500-rated employment law & business immigration team are experts in guiding businesses of all sizes and backgrounds through a range of issues that may arise.