Improving workers’ rights was at the heart of the Labour Party’s manifesto for the 2024 General Election, and on 17 July 2024 the King’s Speech laid out the new Labour Government’s plans to strengthen worker rights, as well as to improve the state of the UK economy.
Below are some of the key changes that workers in the UK can expect from the Government, and what businesses need to know about them.
Five Key Employment Law Changes: What is Labour Planning?
1. Introduction of the Employment Rights Bill
The King’s speech touched upon the new Employment Rights Bill, which will allow Labour to ban exploitative practices such as “fire and rehire” and zero-hour contracts. The Bill is to be introduced within the first 100 days of Labour’s rule and aims at upgrading workers’ rights. Some commitments include:
Banning Fire and Re-hire
When an employee is dismissed and then rehired with a new employment contract, it is an act of “firing and rehiring”. While not illegal, this practice has received attention because employers tend to use it to reduce costs or overall working conditions.
The fire and rehire code, published in February 2024, details how employers should be using this practice. Labour, however, intends to try and completely ban fire and rehire. Calling the code “inadequate”, the Employment Rights Bill will look into remedies and replacements for this practice. However, fire and rehire may still be an option only when businesses have no alternative way to restructure.
Scrapping Zero-Hour Contracts
Labour plans to try and improve working conditions for low-paid employees, and has focussed on banning zero-hour contracts. The aim with banning these forms of contracts is to ensure regular pay for workers, consistency in routines, and a reasonable amount of notice for shift changes; something that zero-hour contracts have never been able to, and in Labour’s view never will, achieve.
In the last decade, zero-hour contracts have been on the rise, causing an increase in less secure work. The “one-sided flexibility” of these contracts has made them exploitative, pushing Labour to look at ways to offer a ‘baseline level of security’.
Enhanced Protection for Working Mums
Recent legislation extended redundancy protection for pregnant women to six months after they return from maternity. Labour wants to extend this level of protection for all kinds of dismissal. They do highlight that dismissal will be lawful in certain circumstances, but this is yet to be defined.
Fair Pay
Labour plans on ensuring minimum wage is a real living wage UK workers can rely on. Hence, they want to remove discriminatory age bands on all adult workers and ensure the Low Pay Commission’s remit is altered to take into account the cost of living. Moreover, a “Fair Pay Agreement” will be established in the adult care sector.
Additionally, unpaid internships are to be banned, unless it is a part of training or an education program
Unfair Dismissal Protection from Day One
Labour highlights that switching jobs is declining as people want their basic rights that are only offered after a few years of service; however, staying that long could negatively impact an employee’s productivity.
The Bill will provide workers with protection from unfair dismissal from day one. This differs from the current laws as employees require two years of service as a minimum to be eligible for unfair dismissal protection. There are exceptions likely to be imposed such as probationary periods, with the Government yet to provide further clarity on this.
In addition, other day-one rights to be incorporated include Parental leave, Statutory Sick Pay and Flexible Working.
Strengthening Trade Unions
The Labour Party has always been supported by Unions which is one of the reasons why, now, the party is looking to strengthen them. Labour’s General Election manifesto highlighted the importance of better worker representation and promises to update trade union legislation to “fit the modern economy”.
Unnecessary restrictions on trade union activities will be removed so as to not disrupt negotiations between the unions and employers; moreover, trade unions will be granted better access to employees so as to meet and represent them adequately. For this, unions will not have to ask for permission but instead provide prior notice of their arrival and comply with any requests by employers.
2. Draft Equality (Race and Disability) Bill
The King’s Speech mentioned a draft Bill that would ensure race equality and equal pay in law. Labour has identified that disabled employees earn, on average, a lower income when compared to non-disabled employees. Hence, they have proposed a new bill to tackle pay issues faced by ethnic minorities and disabled people.
This draft Bill will ensure ethnic minorities and disabled people who are not paid appropriately have the power to bring an unequal pay claim. Additionally, to tackle the issue of ethnicity and disability pay gap reporting, the Bill will make reporting these gaps mandatory.
3. Introducing the Right to Switch Off
While not mentioned in the King’s Speech, the Labour Party’s manifesto featured a “Right to Disconnect” i.e., switch off from work after working hours are over. The discussion surrounding the right to switch off came about after the pandemic when employees were struggling to draw a line between work life and life at home.
Labour has highlighted in its manifesto that healthier working practices are needed in the UK in order to create a motivated and productive workplace. There is no further elaboration on how they intend to do this, but the Paryu plans on taking inspiration from similar models in Belgium and Ireland.
4. Improved Support for Menopause at Work
London’s Faculty of Occupational Medicine (FOM) has reported that nearly 8 out of 10 women go through menopause while they are still working. It has been further reported that while three out of four women experience symptoms, one in four face serious symptoms that could negatively impact work.
However, it is not just at work that these women suffer. Once menopause starts taking effect, women even consider retiring due to its impact. Hence, Labour has promised to improve menopause support by making employers with more than 250 employees report on how they plan to support their employees.
They also plan on publishing guidance, for all employers, on managing workplace temperatures, uniforms, and leave related to menopause.
5. Repealing Anti-Strike Legislation
Introduced by the Tory government, the Strikes (Minimum Service Levels) Act received royal assent in 2023. The act allowed organisations to impose minimum service levels during strike action to make sure that the lives and the livelihood of people are not at stake when workers strike.
However, with the change in political ruling, the Strikes Act has come under scrutiny once more. The Labour Party have recently announced that they will be repealing the “vindictive” legislation. Placing importance on the fundamental freedom of working people, the Party aims at scrapping the law to make way for newer and better partnerships.
Parting Thoughts
Upcoming changes to employment law means businesses will need to stay alert to the changes, understanding when these changes will come into force, and how the new laws will affect them. Employers are encouraged to seek legal advice at an early stage in order to best understand what their obligations are and how to comply with them.
Chris Hadrill is Partner in the employment team at Redmans
