With the Labour Party now in power, we take an in-depth look at their proposed key employment reforms. The Labour Government are committed to delivering on policies as set out in the Plan to Make Work Pay. During the King’s Speech on 17 July 2024, two employment law related bills were announced, the Employment Rights Bill and a draft Equality (Race and Disability) Bill. These reforms are poised to significantly impact both workers and businesses across the nation.
Employment rights bill
Labour have promised to introduce this Bill within their first one hundred days in power and has been described as “the biggest upgrade to workers’ rights in a generation”. This means we can expect this Bill to be laid before parliament around the middle of October 2024. However, once a bill is introduced, it must go through both houses of parliament before receiving Royal Assent and consequently becoming law. This process is likely to take many months and even once the Bill has become law, there are likely to be new codes of practice or secondary legislation to implement these changes. Therefore, any changes are unlikely to be implemented until 2025.
Labour plans to implement the following:-
- Day one rights
- Unfair Dismissal
A big change is the proposal to give workers new “basic individual rights” from day one, “ending the current arbitrary system that leaves workers waiting up to two years to access basic rights of protection against unfair dismissal, parental leave and sick pay”.
Employers will be able to operate probationary periods to assess new starters, but changes will help to ensure that there are fair and transparent rules and processes and that new hires are not fired without reason or cause.
This change will have a far reaching impact on businesses that are currently not exposed to claims for unfair dismissal when they fail to follow due process, such as completing performance and disciplinary procedures, prior to dismissal during the first two years of employment.
Flexible working
Labour would make flexible working the default from day one for all workers, as far as is reasonable.
It suggests Labour will build on the changes to the framework for flexible working recently introduced by the current government to ensure that flexibility is a genuine default. The right to request flexible working became a day one right on 6 April 2024.
Workplace harassment
Employers will be required to create and maintain workplaces and working conditions free from harassment, including by third parties. The legal duty for employers to take reasonable steps to stop sexual harassment before it starts will be strengthened.
It is not clear whether the duty proposed would go further in other respects than the new mandatory duty to prevent sexual harassment in the workplace, created by the Worker Protection (Amendment of Equality Act 2010) Act 2023, which is expected to come into force on26 October 2024.
Employment status
Labour proposes to end the distinction between workers and employees and create a single worker category. Workers are currently entitled to paid holiday and protection from discrimination but not unfair dismissal. In addition, the self employed will be entitled to their own new protection which would include a right to a written contract.
Ending one-sided flexibility
Labour have said they are committed to ending one-sided flexibility and to ensuring that all jobs provide a baseline level of security and predictability by banning exploitative zero hours contracts that do not have a minimum number of guaranteed hours. They want to ensure that workers have the right to a contract that reflects the number of hours they regularly work, based on a twelve-week reference period. Employers will still be able to offer fixed-term contracts including those for seasonal work.
Family-friendly employment rights
Parental leave will become a day one right.
It would be made unlawful to dismiss a woman during pregnancy or within six months of her return to work, except in specified circumstances.
Right to disconnect
A new “right to switch off” would be introduced, providing workers the right to disconnect from work outside of working hours and not be contacted by their employer.
Statutory sick pay
Labour plans to strengthen Statutory Sick Pay (SSP), remove the lower earnings limit to make it available to all workers and remove the waiting period.
National minimum wage
Labour pledge to ensure that the National Minimum Wage (NMW) is a real living wage that people can live on. To achieve this the age bands would be removed to ensure every adult worker benefits.
Draft Equality (Race and Disability) Bill
This bill is described as a ‘draft’ bill and suggests that this is of a lower priority than the Employment Rights Bill. This bill is likely to require a lengthy consultation and as such we expect that this bill will take longer to pass through parliament.
Statutory right to equal pay
This will introduce a statutory right to equal pay to cover ethnic minorities and disabled people, making it much easier for them to bring unequal pay claims.
Mandatory ethnicity and disability pay gap reporting
The publication of ethnicity and disability pay gaps will be made mandatory for employers with more than 250 staff, to mirror gender pay gap reporting.
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