We have a new Government; so what does that mean for employment law? Before winning the election Labour pledged to introduce legislation to implement its 'New Deal for Working People' within 100 days; in other words by 12 October. An ambitious target. But already in the King's Speech, two employment law bills are proposed for the next parliamentary session; an Employment Rights Bill and an Equality (Race and Disability) Bill.
Employment Rights Bill
This will include:
- A ban on exploitative zero hours contracts. It seems that this may not be an outright ban. It has been reported that after 12 weeks Labour will allow people with regular hours to move away from a zero-hours contract, though workers will be entitled to opt to stay on a zero-hours contract with minimum standards to ensure that they are not "abused".
- An end to "fire and rehire" and replacing the previous government's "inadequate statutory code".
- Rights to parental leave and sick pay, and protection from unfair dismissal, will be day one rights for all workers.
- Statutory sick pay (SSP) will be strengthened by removing the lower earnings limit and waiting period for eligibility.
- Flexible working will be the default for all workers from day one.
- It will be unlawful to dismiss a woman returning from maternity leave for 6 months after her return.
- A single enforcement body, the Fair Work Agency, will be established. It will have powers to inspect workplaces and act against exploitation, including discriminatory practices against migrant workers.
- A Fair Pay Agreement will be established in the adult social care sector. This will ensure that these workers have a route to better conditions, training and progression.
- An update to trade union legislation, including the removal of unnecessary restrictions on trade union activity, the repeal of minimum services levels (MSLs), a simplification of the statutory recognition process and trade union access to workplaces.
The background briefing notes to the Bill also commit the government to delivering a genuine living wage that accounts for the cost of living and to removing age bands for the national minimum wage (NMW) for adult workers. It is understood that these measures do not form part of the Bill but will be introduced separately.
Draft Equality (Race and Disability) Bill
This Bill will include:
- A full right to equal pay for ethnic minorities and disabled people.
- The introduction of mandatory ethnicity and disability pay reporting for employers with 250 or more employees.
Other measures
The King's Speech also introduced a Skills England Bill which will establish a new body, Skills England. Skills England will convene with employers, unions, education and training providers and experts to develop a single picture of national and local skills needs. One of its responsibilities will be to identify the training for which a Growth and Skills Levy will be available. The apprenticeship levy will be reformed.
Labour has also pledged to introduce further reforms. These were not mentioned in the King's Speech so are presumably longer-term goals. Labour has stated that it will introduce a single status of worker and transition towards a simpler two-part framework for employment status. Currently there are three types of employment status: employee, worker and self-employed. When the previous government responded to a consultation on employment status in 2022 it acknowledged that there are problems with the current system, including the fact that boundaries between the different statuses can be unclear, but concluded that the benefits of creating a new system were outweighed by the risks associated with legislative reform. It seems that Labour is prepared to take that risk!
Labour will introduce a "right to switch off" following existing models in Ireland and Belgium. It will review carer's leave and examine the benefits of introducing paid leave (it is currently unpaid), as well as introducing the right to bereavement leave for all workers. There is currently a statutory right to two weeks' parental bereavement leave and pay in the event of the death of a child or a stillbirth, but there is no mention of Labour's right to bereavement leave just being limited to bereavement in these circumstances.
In relation to gender pay gap reporting, Labour has committed to imposing a requirement on all large employers to develop, publish and implement action plans to close their gender pay gaps and to ensure that outsourced workers are included in gender pay gap and pay ratio reporting. It has also stated that it will require employers with more than 250 staff to produce Menopause Action Plans, setting out how they will support employees through the menopause.
Section 1 of the Equality Act 2010 (which is not currently in force) imposes a socio-economic duty on public bodies which means that they will have to consider how their decisions and policies could increase or decrease inequality that results from socio-economic disadvantage. Labour will bring this duty into force.
Finally, it's worth noting that, although there are no further details on this as yet, Labour has committed to strengthening existing rights and protections for staff impacted by TUPE. It has committed to "bring about the biggest wave of insourcing of public services in a generation". A quick and proportionate public interest test to evaluate value for money, impact on service quality and economic and social value goals will have to be carried out by public bodies before any service is contracted out. Labour will reinstate and strengthen the last Labour government's two-tier code to end unfair two-tiered workforces.
The next few months will no doubt bring more detail on all these measures. We’ll make sure to keep you up-to-date.
