What does the new Labour Government mean for employers in the UK?

Introduction

On 17 July, in his speech before Parliament, the King outlined the UK Labour Government’s planned changes to employment law. The content of the speech reflected pre-election commitments by the Labour Party.

The changes will be implemented by way of an Employment Rights Bill which the Government says will be put before Parliament within its first 100 days in power, which suggests that the final text will be laid before Parliament by 12 October 2024. Before becoming law, the changes will need to go through both houses of parliament so many of the changes are unlikely to be law until late 2025.

The key changes announced include:

1. Ban on Exploitative Zero-Hour Contracts: Ensuring workers have the right to a contract that accurately reflects the hours they regularly work.
2. Ending ‘Fire and Rehire’ Practices: Providing effective remedies and replacing the previous Government’s statutory code on “Fire and Rehire” to prevent unjust termination and rehiring practices.
3. Immediate Access to Parental Leave, Sick Pay and Protection from Unfair Dismissal: Making these rights available from day one of employment for all workers, while allowing employers to maintain probationary periods for new hires.
4. Strengthening Statutory Sick Pay: Removing the requirement for an employee to earn a minimum limit to be entitled to statutory sick pay (SSP). Also removing the waiting period of 3 days before an employee is entitled to SSP to enhance employee support. This means employees can receive SSP from the first day of sickness.
5. Flexible Working: The ability for flexible working arrangements to be in place from day one for all workers, as far as is reasonable.
6. Enhanced Protection for New Mothers: Making it unlawful to dismiss a woman who has had a baby for six months after her return to work, with specific exceptions.
7. Creation of the Fair Work Agency: Strengthening the enforcement of workplace rights through this new agency.
8. Updates to Trade Union Legislation: Removing unnecessary restrictions on trade union activity.
9. Simplifying the process of statutory recognition for trade unions: Introducing a route for workers and union members to access unions within workplaces.
10. Establishment of a Fair Pay Agreement in the Adult Social Care Sector: Subject to review and exploring how similar agreements could benefit other sectors.
11. Reinstatement of the School Support Staff Negotiating Body: Ensuring fair negotiations and support for school staff.

Other changes, envisaged in pre-election manifestos, are likely to also be implemented and we await publication of the draft Bill to find out all the details. What is clear is that the incoming Employment Rights Bill represents a large shift towards enhancing worker protections and rights and most employers will need to plan to review contracts, practices and procedures in 2025, once we know what will change and when.