NEWSFLASH – What does the King’s Speech mean for employers?

Labour had already given us an indication that it would make sweeping employment law reforms in its manifesto and in yesterday’s speech two out of the 40 bills announced were employment law-related bills.

Here’s a quick outline of what this entails and our initial view on what these could mean for employers.

1. Employment Rights Bill:

The speech noted that the new Government was "committed to making work pay" and bring in a "new deal for working people to ban exploitative practices and enhance employment rights". It will do this through a new Employment Rights Bill, which implements Labour’s New Deal for Working People and will include the following:

• Banning exploitative zero-hour contracts, “ensuring workers have a right to a contract that reflects the number of hours they regularly work and that all workers get reasonable notice of any changes in shift with proportionate compensation for any shifts cancelled or curtailed”;
• Ending ‘fire and rehire’ practices, by reforming the law to provide effective remedies and replacing the previous Government’s statutory code;
• Introducing day 1 employment rights for all workers, specifically parental leave, sick pay and protection from unfair dismissal. The Government will ensure that employers can continue to use probationary periods to assess new hires;
• Strengthening Statutory Sick Pay by removing the lower earnings limit and the waiting period;
• Making flexible working “the default from day-one for all workers”;
• Strengthening protections for new mothers by making it unlawful to dismiss a woman who has had a baby for six months after her return to work (except in specific circumstances);
• Establishing a new Single Enforcement Body (also known as a “Fair Work Agency”) to enforce workplace rights;
• Establishing a Fair Pay Agreement in the adult social care sector, with a view to assess how other sectors might also benefit from such agreements;
• Updating trade union legislation (e.g. removing the previous Government’s approach to minimum service levels), introducing new rights for unions to access workplaces and simplifying the process of statutory recognition.

  The Government commits to introduce the Bill in the first 100 days – meaning we might therefore see a final Bill by mid-October 2024. 

2. A draft Equality (Race and Disability) Bill:

A separate draft Equality (Race and Disability) Bill was also announced in the speech, implementing other pledges made in Labour’s New Deal and Manifesto. This Bill will build on current pay gap reporting practices, and the Equality Act 2010, tackling inequality for ethnic minority and disabled people by:

• introducing mandatory ethnicity and disability pay reporting for employers with 250+ employees; and
• extend the current equal pay regime to cover race and disability as well as sex.

In addition to the above, the Government is also looking to ensure a genuine living wage and removal of the existing national minimum wage age bands, which is intended to provide additional security and predictability for workers, especially in light of wages not rising in line with inflation.

Our initial view

Whilst the finer details might still be scarce, there is no doubt that this is a long list of reforms, and the changes are likely to happen quickly and at pace in the months to come. Employers will need to get on top of these changes quickly and consider the impact on their business. 

The most notable change for employers will be the introduction of unfair dismissal rights from day 1 of employment.  It remains to be seen when (and how quickly) this will be implemented but commentary suggests that it could (if the Government wished) be introduced quickly through secondary legislation without the need to wait for a final Employment Rights Bill.   

Given the number of areas the Bill intends to tackle, without yet having any substantial detail available to the public, it will be a considerable effort for HR teams to ensure sufficient protocols are in place to prepare for and implement these changes.

We are keeping a watching brief on all the developments and will be sharing more insights on the changes ahead. In the meantime, if you would like to discuss any of the reforms and how they might impact your business, please contact your usual member of our team.

Research and edits made by Steph Ong