As many of you will have seen, on 17 July 2024, King Charles III delivered his first King’s Speech outlining Labour’s legislative priorities as they have formed a new government. Labour have said that they plan to ‘unlock growth’ and ‘improve living standards for working people’; how they are planning to do this is with the introduction of two new employment laws: the Employment Rights Bill and the draft Equality (Race and Disability) Bill. Labour hopes to ‘introduce’ this legislation within the first 100 days of the new parliament (i.e. by 12 October 2024), though what this means in practice is far from clear.
The Employment Rights Bill
The Employment Rights Bill has been proposed by Labour due to their commitment to ‘Making Work Pay’. The purpose of the Bill is to enhance employee protection, with the main ‘highlight’ of the Bill being that employees will have ‘day one’ rights. This means that, subject to probationary periods, employees will be entitled to parental leave, sick pay, flexible working, and be protected from unfair dismissal from the first day of employment. Under the current law in England and Wales, employees must have 2 continuous years’ service with their employer before they have protection against ordinary unfair or constructive dismissal.
Further, under current laws, employees have the right to make a request for flexible working from ‘day one’ of employment, however, Labour plan to enhance this right by making flexible working the default from day one; employers will then be required to accommodate this as much as reasonably possible.
Additionally, Trade unions are to be given additional protection – trade union legislation will be updated so as to remove unnecessary restrictions on their operations, and a new regulated route will be introduced to ensure that workers have a reasonable right to access a trade union within their workplace.
In terms of Statutory Sick Pay, the new government plans will remove the lower earnings limit to qualify for pay.
To oversee the implementation of these reforms and strengthen enforcement of employment rights, a new state enforcement agency called the ‘Fair Work Agency’, is due to be set up.
Other proposals which Labour had set out in their manifesto, and which have now been announced in this Bill, are:
- Ban on zero-hour contracts which are deemed to be ‘exploitative’, to ensure that workers have a right to a contract which reflects an average of hours worked; and,
- Restrictions on ‘fire and rehire’
Draft Equality (Race and Disability) Bill
The second legislation referred to in the King’s Speech was a draft Equality (Race and Disability) Bill. This Bills seeks to extend the current right to equal pay so that it covers race and disability, as well as sex. The Bill will also introduce mandatory ethnicity and disability pay reports. The new Labour government have made these proposals to make it easier for workers to bring equal pay claims and encourage firms to remedy any pay discrepancies; however, it is possible that this proposed reform will not come into fruition, as there have already been some criticism around the practicality of the same; for example, many employment lawyers have flagged that there will be practical issues around gathering and reporting this information, as employers could remain reluctant to disclose information.
Alongside the two Bills, the government has also promised to deliver a ‘genuine’ living wage, which will link the National Living Wage to the ‘cost of living’ in the UK. They have also proposed that the current qualifying age restrictions for the National Living and Minimum Wages will be removed, as they see them as discriminatory.
When are the changes taking place?
There is no guarantee when we can expect to see these changes implemented, but as stated at the start of this article, Labour have promised that the Employment Rights Bill will be ‘introduced’ within the first 100 days of government. We expect that this means text will be introduced by October 2024. From there, however, the Bill will need to go through both houses of parliament. This will likely take several months. Once the Bill becomes law, secondary legislation or codes of practice will be needed – so it could be 2025 or 2026 before we see legislation in place. The biggest change, being day 1 unfair dismissal rights, could be rushed through (along with other easier changes in law) but Codes of Practice and other guidance will need to be updated. The law around probationary periods will need to be considered carefully, too. All in all, legislation takes a long time to change substantially, and a lot of consultation is usually required.
What is a guarantee though is that employment law changes are ahead, and employers and employees should carefully monitor this in the months which follow, though we expect immediate changes to be limited in the next 100 days.
Should you require specialist employment advice, please do not hesitate to contact our team at employment@curzongreen.co.uk.