New deal for working people to ban exploitative practices and enhance employment rights

The King’s Speech confirmed the Government’s “new deal for working people to ban exploitative practices and enhance employment rights”. The plan was announced in May 2024 to reform employment legislation to “make work pay” as part of their long-term plan to grow Britain’s economy and bring an end to the cost of living crisis. The focus is to increase workforce and job retention by creating more family friendly legislation and improving living standards.

The briefing note that accompanies the King’s Speech gave an insight of what to expect in the Employment Rights Bill as follows:

• A ban on zero-hours contracts, ensuring workers have the right to a contract that reflects the number of hours they regularly work
• Shift workers having reasonable notice of any changes to their shift, with compensation for shifts cancelled or shorted
• Bring an end to ‘fire & rehire’ and ‘fire & replace’ by reforming the legislation and codes of practice
• Protection from unfair dismissal to be a day 1 right
• Making parental leave and sick pay a day 1 right
• Make flexible working the default position from day 1, with an obligation on employers to accommodate them as far as reasonable
• Strengthening statutory sick pay by removing the lower earnings limit and waiting period so that it may be available to all workers
• Strengthening the protection from dismissal afforded to new mothers, making it unlawful to dismiss a woman within the first 6 months following her return to work after having had a baby (with exceptions in specific circumstances)
• Modernising Trade Union Legislation by removing some restrictions on TU activity, including minimum service levels.
• Simplify the process to statutory recognition for Trade Unions
• Introducing the right for workings and union members to access a union in their workplace

The Government will also introduce the Equality (Race and Disability) Bill to enshrine in law the right to equal pay for ethnic minorities and disabled people, and introduce mandatory ethnicity and disability pay reporting for employers with more than 250 employees. It is expected that this Bill will mirror the equality act with regard to gender pay gap reporting.

We do not have an exact timeframe for when the Bills will be introduced other than the Employment Rights Bill will be introduced into Parliament within the first 100 days. Given the Summer Recess starts on 30^th July and party conferences are in September, it is expected the Bill will be introduced in October, just within those first 100 days. It is likely that the Bill will then take a number of months to get through Parliament before it becomes Law and it is unlikely to become law until at some point in 2025.

Employers do not need to panic and start frantically making changes to contracts and policies, but they do need to be aware of what may be to come and begin making plans to make changes as necessary. How exactly these two Bills will work in practice should they become legislation is largely unknown and the devil will be in detail. Undertaking a review of existing policies and procedures to identify where likely changes will need to occur is a sensible step to be taking at this stage as is a review of the use of probationary periods and how these feature within current contracts of employment.