19 July 2024

In the King’s Speech on 17 July 2024, the new Labour Government announced an Employment Rights Bill which seems likely to become the most significant piece of employment legislation in several decades.

Recently, we covered the extensive changes proposed in the Labour Party manifesto (here). Until now, there has been uncertainty about how quickly changes would be attempted, beyond a general promise to introduce some legislation within 100 days. However, the King’s Speech, with the accompanying briefing notes, appears to confirm that the 100-day timescale will apply to a large proportion of Labour’s most ambitious workers’ rights commitments – probably more than most commentators anticipated.

The 100-day timescale means that legislation will be tabled by the end of October 2024. It will probably take at least a few months to pass into law, but even so, the bill, or parts of it, might realistically come into force within a year.

The proposed measures listed in the briefing notes to the King’s Speech include the following:

• Introducing unfair dismissal rights from day one of employment (thus removing the current 2-year qualifying period) “for all workers”. In continuity with previous announcements, this is qualified by the condition that employers will continue to be able to operate probationary periods. (Note: Since unfair dismissal rights currently apply only to employees, the reference to “all workers” seems to imply that “single-worker” status might be introduced by this bill, extending employment rights dramatically. However, it is possible that the notes are imprecisely worded, since Labour promised to consult extensively on the “single worker” change, which is likely to be complicated.)

• Banning “exploitative” zero-hours contracts by giving workers the right to a contract reflecting any hours regularly worked over a 12-week reference period and introducing a requirement of reasonable notice of a change in shifts or working time, with a system of proportionate compensation for shifts cancelled or curtailed at short notice.

• Removing restrictions on trade union activity, including repealing the Strikes (Minimum Service Levels) Act 2023 and almost certainly (though it has not been stated explicitly on this occasion) the Trade Union Act 2016, both of which significantly restricted lawful industrial action.

• Simplifying statutory recognition processes for trade unions and introducing a regulated right of access to ensure workers have a “reasonable right” to access a union in the workplace.

• Establishing a Single Enforcement Body (also to be known, somewhat bizarrely, as the “Fair Work Agency”) to enforce workers’ rights.

• Introducing a right to work flexibly, with employers required to accommodate this “as far as is reasonable”.

• Outlawing dismissing a woman within 6 months after returning from maternity leave, other than in “specific circumstances”.

• Reforming the law on “fire and rehire” to provide more “effective” remedies to the practice and replacing the current Statutory Code of Practice on Dismissal and Re-engagement (which came into force on 18 July 2024).

• Removing the lower-earnings limit and the 3-day qualifying period for Statutory Sick Pay, and making it available to “all workers”.

• Introducing a nationwide Fair Pay Agreement in the adult social care sector, and reviewing whether other sectors could follow this pattern.

• Making unpaid parental leave a “day-one” right.

• Reinstating the School Support Staff Negotiating Body to establish national terms and conditions, pay rates, and career progression routes for teaching assistants, office staff, caretakers and technicians, catering staff, cleaners and all other support staff working in schools.

The Government also announced that a Draft Equality (Race and Disability) Bill would be published within 100 days. This would:

• Introduce equal pay liability for race and disability (in parallel to the current equal pay legislation).

• Introduce mandatory ethnicity and disability pay reporting for large employers (i.e., those with 250 or more employees – again, in parallel with the current gender pay reporting requirements).

Given that these two measures are only being published in draft, it seems likely that there will be a consultative period before they begin their journey through the legislative process.

Other measures announced by King Charles III which are relevant to employers include:

• Regulation of the development of AI.

• The establishment of Skills England, which will be a partnership between employers, unions, education/training providers, experts, Mayoral Combined Authorities and national government to oversee skills and training nationwide. Skills England will take over some of the functions of the Institute for Apprenticeships and Technical Education, and its work will include reforming the apprenticeship levy.

• The establishment of a digital ID verification service, participation in which will be voluntary, and which will allow pre-employment checks to be carried out digitally.

• Powers to sanction company directors for serious failures in relation to financial reporting and auditing responsibilities.

• Personal criminal liability for water company executives, powers for the regulator to ban the payment of bonuses if environmental standards are not met, and powers for customers to summon board members.

For more detailed analysis of what some of Labour’s proposed changes might mean for employers, please refer to our previous article here.

For more information, please contact the team at Synchrony Law.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.