UK: Upcoming Employment Law Reform – the King’s Speech

Authors: Frances Ross, Ruth Bonino, Corinna Harris, and Sophie Jackson

The briefing notes published by the Prime Minister’s Office set out the following commitments:

• Labour is pressing full steam ahead with their “Plan to make work pay – delivering a new deal for working people” (“Labour’s Plan”) in full. We previously reported on the key proposals set out in that plan here.
• An Employment Rights Bill will be introduced within “the first 100 days” (presumably of entering office) and will bring in the policies set out in Labour’s Plan which require primary legislation to implement. The Prime Minister’s briefing notes accompanying the King’s speech appear to indicate the following commitments will be in the bill (although this is not entirely clear):
  • Introduce new rules to prevent the abuse of zero hours contracts
  • Provide effective remedies against abuse of “fire and rehire” and replace the new statutory code
  • Introduce “Day-one rights” for all workers for unfair dismissal, parental leave and sick pay (with probationary periods for employers to assess new hires)
  • Increase rights to statutory sick pay by removing lower earnings limit and three-day waiting period
  • Make flexible working the default from day one, except where it is not reasonably feasible
  • Make it unlawful to dismiss a woman who has had a baby for six months after her return, except in specific circumstances
  • A new Fair Work Agency to strengthen enforcement of workplace rights
  • A new Fair Pay Agreement in the adult social care sector
  • Reinstate the School Support Staff Negotiating Body
  • Repeal the law on minimum service levels in relation to industrial action, simplify the process of statutory recognition and introduce a regulated route to ensure workers and union members have a reasonable to access a union
• A draft Equality (Race and Disability) Bill will:
  • “Enshrine in law the full right to equal pay for ethnic minorities and disabled people, making it easier for them to bring unequal pay claims”.
  • Introduce mandatory ethnicity and disability pay reporting for larger employers (those with 250+ employees) to help close the ethnicity and disability pay gaps. The notes provide that mandatory reporting will “expose pay disparity, encouraging employers to take action and coupled with additional equal pay protections allow those who are being underpaid, with greater legal certainty to make a claim.”

In addition, the Prime Minister’s briefing notes to the King’s speech promise to deliver a genuine living wage that accounts for the cost of living and removes the age bands, as well as a close partnership with trade unions to deliver on Labour’s Plan.

Practical point

Employers can expect to see a significant number of changes to employment law over the coming year or two, but as to when precisely the proposals will become law this is less clear, particularly in view of the Labour Party’s manifesto commitment to consult fully before passing legislation.    Notwithstanding this, Labour indicated in its Plan that some of the proposals could be introduced relatively quickly and will be included in the Employment Bill (such as removing the lower earnings limit on statutory sick pay and creating a single enforcement body).  Other proposed changes which were not directly listed in the briefing notes to the King’s speech may take much longer, such as the proposal to move to a single worker status and a review of parental leave (where Labour’s Plan envisages that detailed consultations would be undertaken within the first year of a Labour government). Labour’s Plan also indicates that they will engage widely with experts and stakeholders, including employers and trade unions in respect of the changes that require substantial secondary legislation.

The government promises “to introduce” the Employment Rights bill within 100 days, but whether this means the draft bill will be introduced for consultation or introduced to Parliament is unclear – but we will know soon enough as it is rumoured that the bill could be published as early as next week.  No timing is given in relation to the Equality (Race and Disability) Bill.