The Horizon of Employment Law – What Can We Glean from The King’s Speech?
The election of a new Labour government seems likely to mean a raft of significant employment law changes which all employers need to be aware of.
The party’s pre-election proposals were laid out in their ‘Plan To Make Work Pay’ and covered core areas including: Ending ‘one-sided-flexibility’, Family Rights, Fair Pay, Voices at Work, Equality at Work, and Rights at Work.
Progress has continued as last week’s King’s Speech confirmed the intention to produce a new Employment Rights Bill, likely within an initial period of 100 days. The briefing notes published by the government to support the King’s Speech give more a flavour of what is planned but we will need to await the relevant draft Bills for full detail. And of course, a draft Bill can be amended before being passed as an Act of Parliament. Therefore, it is important to realise that while this is a step towards clarity on what will be delivered, it is still in the early stages and complete certainty is not yet possible.
The measures addressed in the notes, which are expected to be included in a draft bill, include the following:
- ‘One sided flexibility’ is to come to an end. This refers to power imbalances between employers and employees, arrangements that may be convenient for the employer whilst failing to offer equal benefit to the employee. The aim of reform in this area is to give more structure and reliability to individuals. A significant prospective change is a ban on “exploitative” zero-hour contracts and the requirement for a contract which accurately reflects the number of hours regularly worked. Workers would be entitled to reasonable notice of shift changes and compensation for cancelled shifts. The hospitality industry in particular is likely to feel the impact of this proposed change. Employers will need to give more careful thought to what resources they need in terms of staff, and will not have the benefit of a fully-flexible resource at hand.
- The practice of ‘fire and rehire, or ‘fire and replace’ (see our blog here) is to be curtailed through reform of the current statutory code.
- A critical change is that certain employee rights will arise from day one of employment. For example, entitlement to sick leave and parental leave (and the 3 day waiting period for statutory sick pay would be dropped). Most significant is the proposal that unfair dismissal will be a “day one” right, with a dismissed employee being able to bring an unfair dismissal without the need for 2 years’ service (which is currently the case save for claims of “automatically unfair” dismissal). However, it should be noted by employers that this provision will be subject to any probationary period (during which the employee could not claim unfair dismissal). It remains to be seen whether there will be any restriction on the length of probation periods which employers can adopt.
- Flexible working would be a default right for employees from day one, with employers required to accommodate flexible working as far as is reasonable. The devil will be in the detail here, in terms of how easily, or otherwise, employers will be able to refuse flexible working.
- It is proposed that it would be unlawful to dismiss mothers for six-months after they return to work after maternity leave, although certain exceptions would apply (detail awaited). This is a significant extension of existing protections.
- There is also to be an Equality (Race and Disability) Bill, requiring pay gap reporting for these groups from larger firms (250+ employees). It would take a similar form to the current requirements for gender pay gap reporting. The right to equal pay for disabled and ethnic minority people would be enshrined in law. There may be merit in employers to beginning to think about how they will approach this, if and when the obligation is implemented.
- Reforms are proposed in relation to Union recognition. These measures include simplification of the recognition process and enabling staff to access a Union representative at work. Additionally, restrictions on the right to strike, relating to minimum service levels are due to be removed. The focus of collective negotiations will be reframed around good faith negotiations and bargaining.
Other issues which had been raised pre-election but are not addressed in the notes to the Kings Speech:
- Remove the reduced rate of national minimum wage for younger workers and raise them to the same level as over 21’s.
- Ending unpaid internships (apart from as part of education or training courses)
- Making it mandatory for large companies (250+ staff) to develop, publish and implement plans to close the gender pay gap
- Making it mandatory for large firms to produce menopause action plans.
Based on the King’s Speech and the background notes, it seems likely that we approach a period of almost unprecedented change in employment rights, which all employers will need to be fully aware of. The abolition of any qualifying service to claim unfair dismissal (albeit subject to probationary period) is a hugely far-reaching proposal which would radically change the employment law landscape. Employers should watch this space for further updates!
This update contains general information only and does not constitute legal or other professional advice.
Dawn Robertson, Partner & Accredited Specialist in Employment Law: dro@bto.co.uk / 0131 222 3242 / Connect with Dawn on LinkedIn
Douglas Strang, Senior Associate: dst@bto.co.uk / 0141 221 8012 / Connect with Douglas on LinkedIn
