A New Era in Employment Law: Key Proposals from the Labour Government's First King's Speech

In the first King’s Speech from the newly formed government, delivered on 17 July 2024, a sweeping reform to employment law was announced, promising to bring some of the most significant changes in decades. At the centre of these reforms is an Employment Rights Bill, which is pledged to be introduced within the first 100 days of the new parliament. While the speech itself provided only a brief overview, supplementary briefing notes offered more detailed insights, indicating that these changes could profoundly impact workplaces across the country.

Major Proposals in the Employment Rights Bill

1. Day-One Rights for Employees

One of the most transformative aspects of the proposed legislation is the plan to eliminate the two-year qualifying period currently required for employees to bring claims of unfair dismissal. Under the new rules, employees will have the right to challenge unfair dismissal from their first day on the job, although probationary periods will still be permitted. This change means that businesses will need to ensure rigorous management of new hires during probation, as dismissals during this period will likely come under greater scrutiny.

2. Reforming Zero-Hours Contracts

The bill also targets zero-hours contracts, proposing a new right for employees to receive contracts reflecting the actual number of hours they work regularly. Furthermore, the government intends to mandate reasonable notice periods for shift changes, with compensation due for last-minute cancellations. This move could significantly alter how businesses manage flexible work arrangements, requiring careful scheduling and communication with zero-hours staff to avoid financial penalties.

3. Changes to Fire and Rehire Practices

Initially, Labour promised to ban fire and rehire practices, but the current proposal aims to reform the process by introducing effective remedies and replacing the existing statutory code of practice. These reforms will likely impose stricter requirements on businesses considering restructuring, making thorough consultation and careful planning essential to avoid legal pitfalls.

4. Statutory Sick Pay Overhaul

Another significant proposal involves the scrapping of the lower earnings threshold for statutory sick pay. This change will allow workers to claim sick pay from their first day of illness, extending eligibility to approximately 1.5 million additional employees. HR departments will need to adjust payroll systems to accommodate these changes and prevent potential legal challenges.

5. Flexible Working as the Default

Flexible working is set to become a default right from day one under the new legislation, requiring employers to accommodate such requests unless there are reasonable grounds not to. Although the specifics are yet to be detailed, businesses should prepare for an increase in flexible working requests and the need for robust processes to manage these in line with the forthcoming rules.

6. Protection Against Maternity Discrimination

The bill also includes stronger protections for women returning from maternity leave, making it unlawful to dismiss an employee within six months of her return except in specific, yet-to-be-defined, circumstances. This measure will require HR teams to carefully review and possibly revise their procedures to ensure compliance.

What Was Missing?

While the King’s Speech covered a wide range of issues, some anticipated measures were notably absent from the briefing notes. For example, the creation of a ‘Fair Work Agency’, reforms to trade union legislation, and the introduction of a fair pay agreement in the social care sector were mentioned but lacked further detail. Additionally, proposals such as changing collective consultation rules, reinforcing protections in TUPE (Transfer of Undertakings) situations, and enhancing rights for the self-employed were not explicitly addressed, suggesting they may require further consultation.

Conclusion

The Employment Rights Bill, as outlined in the King’s Speech, promises to be one of the most consequential pieces of employment legislation in recent history. However, much of the detail is still to be revealed, leaving HR professionals and business owners in a state of anticipation. As these proposals move closer to becoming law, organisations will need to stay informed and be ready to adapt to a new era of employment rights.

Article last updated: 29 September 2024