Preparing for Change: Employment Laws under the new Government

With the Labour Party’s decisive victory in the 2024 general election, significant changes to employment law are on the horizon. Sir Keir Starmer’s government has laid out an ambitious agenda aimed at reshaping the landscape of workers’ rights and employer responsibilities. Labour have said they are committed to ‘Securonomics’, which will give working people security in their day-to-day lives.  For all employers, this new era presents both challenges and opportunities.

It is clear that understanding and preparing for these changes will be crucial for employers.

Background

The Labour party’s ‘New Deal’ green paper, subsequently updated  Plan to Make Work Pay – Delivering A New Deal for Working People and their subsequent election manifesto Change promised wide ranging reforms to employment legislation. They also proposed to introduce legislation within 100 days of taking office.

Since forming the new Government, the Labour party have made it clear that there is “no time to waste” when it comes to implementing their programme for change.

With the State Opening of Parliament and the King’s Speech later today, we are likely to have a better understanding of exactly what the Government intends to pursue and prioritise in the forthcoming parliamentary session; we already have a good idea of what might be on the horizon in the short and medium term.

Changes to changes already in the pipeline

Many employers will already be taking action to prepare for the number of reforms recently approved, some of which are due to take effect shortly. To summarise the key provisions:

• The new Code of Practice on dismissal and re-engagement is due to take effect on 18 July. The purpose of this Code is to ensure that an employer takes all reasonable steps to explore alternatives to dismissal and engages in meaningful consultation’. The Code also seeks to ensure that employers do not raise the prospect of dismissal unreasonably early, or put undue pressure on employees by threatening dismissal where this is not, in fact, envisaged. It seems likely that the Code will remain as drafted, until such time as the Government decides exactly how it should be strengthened.  For further information on the new Code, please see the following: ‘Fire & rehire’ Code of Practice – expected “later in the summer” according to Gov.uk – Greene & Greene (greene-greene.com)
• The new Code of Practice on fair and transparent distribution of tips has also been passed, and only requires an Order to bring it into effect (which is expected from 1 October 2024). It seems likely that this will go ahead as planned.
• The new Paternity Leave (Bereavement) Act 2024, received Royal Assent on 24 May 2024, although it requires commencement regulations before it takes effect. It allows fathers and partners to take statutory paternity leave (2 weeks paid leave to be taken in blocks of one or two weeks within 52 weeks of birth), in the event of the death of a child’s mother, such being a day one right. This change is unlikely to be controversial (as it received cross party support and started out as a Private Member’s Bill sponsored by a Labour MP) and is therefore likely to be implemented in the short term.
• A new duty under the Equality Act 2010 for employers to take reasonable steps to prevent the sexual harassment of their employees, will take effect from 26 October 2024 (alongside an updated Code of Practice (not yet published)).  The Equality and Human Rights Commission created guidance on sexual harassment at work in 2020 and have recently updated this to address the change in legislation – they  have launched a consultation to ensure the updated guidance is clear and helpful Consultation on revised guidance. Details of the forthcoming changes are summarised in the following article:  New law permits 25% uplift in compensation for sexual harassment – Greene & Greene (greene-greene.com). However, Labour proposes to further strengthen the protection to require employers to take “all reasonable steps” to prevent sexual harassment of their employees (wording which was rowed-back from as part of the passing of the Act).
• The right for workers (including agency workers) to request more predictable terms and conditions, brought in by the Workers (Predictable Terms and Conditions) Act 2023, and the new right for parents of premature babies to take additional leave if their child requires neonatal care, under the Neonatal Care (Leave and Pay) Act 2023 are also both waiting for secondary legislation before they take effect. These are also unlikely to be blocked. Further details are set out in the following: Stop Press, future changes – Greene & Greene (greene-greene.com)

Collective bargaining

• The Government is already taking steps to engage with unions to resolve ongoing pay disputes in the public sector, including initial discussions taking place with junior doctors.
• It is likely to repeal the Strikes (Minimum Service Levels) Act 2023, which introduced powers to set minimum service levels in certain key public services during periods of industrial action and the power to issue work notices to require certain workers to refrain from strike action.
• It is also likely to repeal the Strikes Repeal of the Trade Union Act 2016, which placed restrictions on the organisation of lawful industrial action. The Trade Union Act 2016 introduced higher thresholds for success on industrial action ballots, two weeks’ notice to be given of industrial action, union supervision of picketing, a six-month time limit on the validity of strike ballots, as well as additional restrictions on picketing and requirements on the wording of ballot papers. Under Labour’s proposals, trade unions would be allowed to use secure electronic balloting when engaging, polling and communicating with members. However, this could be said to make it much easier for unions to organise industrial action, as postal ballots are more expensive and time consuming.
• Labour has also proposed that they would give trade unions the right to access workplaces to allow unions to meet, represent, recruit and organise members, provided they give appropriate notice and comply with reasonable requests of the employer. There would also be a new duty on employers to inform all employees of their right to join a union. They would be required to remind staff on a regular basis, and this should form part of the written statement of particulars that employees receive.
• Labour has also proposed that it will enable employees to collectively raise grievances about conduct in their place of work with ACAS.
• Under the current statutory recognition process, if an employer does not voluntarily recognise it, a trade union may apply to the Central Arbitration Committee for the legal right to be recognised by an employer for collective bargaining over pay, hours and holidays, in respect of a group of workers in a particular ‘bargaining unit’. Labour would simplify the statutory recognition process by removing the requirement that in order for the process to begin, a trade union needs to show that at least 50% of workers are likely to support recognition, and require unions to gain a simple majority when voting on whether to recognise a trade union. These measures would likely make it easier for unions to win recognition from an employer.

Reforming employment status

• Many of you may remember the Good work: the Taylor review of modern working practices (published in 2017), which made a range of recommendations to improve clarity and transparency for individuals and employers but advocated keeping the current three-tier system of ‘worker’, ‘employee’ and ‘self-employed’ as worker status at that time was felt to be relevant in the modern labour market and helpful in being able to apply basic protections to less formal employment relationships.
• The Government’s proposal, however, is to move towards a simplified two-tier framework of ‘worker’ and ‘self-employed’.
• This change will give workers the same rights and protection as employees, such as right to pursue a claim of unfair dismissal and entitlement to family friendly rights such as maternity pay. It is unlikely that this change will happen immediately, and we envisage that detailed consultation will take place before any change occurs.

Pay

• The Government propose to make the minimum wage a real living wage that people can live on. As such they propose to change the Low Pay Commission’s remit, something which can be done swiftly without seeking parliamentary approval, to ensure the cost of living is factored into the annual uprating of the National Minimum Wage (NMW).
• It is also likely to revise the current age bands, meaning that all adults (18+) will receive the same NMW rate.
• For larger organisations with more than 250 employees, they will need to introduce mandatory ethnicity and disability pay gap reporting, which will be more complex than the current gender pay gap reporting obligations.  In addition, large firms will be required to develop, publish and implement action plans to close their gender pay gaps. This proposal is likely to take a longer period of time to be implemented.
• The Government has indicated that it wants to move quickly on changing the eligibility criteria for statutory sick pay (SSP). This will see SSP becoming available for all employees as a day one right, removing the three-day waiting period and the lower earnings limit (currently £123). If employment status is reformed this will see SSP being available to more people.

Changes to employment rights

The Government has also promised to create ‘day one’ rights, including the following:

• Flexible working: Since April 2024 flexible working is a day one right for employees but Labour are proposing that that flexibility should be the default except where it is not reasonably feasible, promoting a change in workplace culture.
• Unfair dismissal: Removing the two year qualifying period to bring an ordinary unfair dismissal claim and making this a day one right. This change will be relatively easy to achieve by secondary legislation, but it is likely that a formal consultation will take place first.

We envisage that there may be a statutory probationary period introduced where dismissal may be more straightforward, and we may also see limits placed on the length of notice periods based on the nature/seniority of the role. If ‘worker status’ is removed, the right to claim unfair dismissal will apply to a more people than ever before.  This change is likely to result in an increase in Tribunal claims (at a time when the Tribunal system is already stretched).

In light of this proposed change, it will be more important than ever to have robust recruitment practices in place, use probationary periods effectively, monitor performance and following a fair dismissal process. Taking time now to ensure managers are appropriately trained will be an investment for the future and it is also an opportunity to audit the workforce to ensure that those with less than two years’ service are performing at the appropriate level, nipping issues in the bud and taking appropriate action before change is implemented.

• Zero-hours contracts: Banning “exploitative” zero-hours contracts and giving workers the right to a more stable contract based on a 12-week reference period.
• Right to ‘switch off’: Labour recognises that the ‘pandemic has led to a step change in flexible and remote working practices in many workplaces, which offer significant opportunities to fit work around family life. However, it has also inadvertently blurred the lines between work and home’. Labour want to change the culture and propose to introduce a right to ‘switch off’ and not be routinely contacted by their employer outsider of working hours. This proposal follows the lead of some European countries, such as France and Ireland.

It’s possible that we’ll see the Government introduce a Code of Practice and that employers will be required to have a Policy setting out the right of employees to disconnect. It is not envisaged that the right to switch off will be a blanket ban, as there may be legitimate reasons when it is necessary for employers to contact staff outside of normal working hours on occasion. However, the expectation is to create a culture where staff can disconnect from work.

By way of example the Code of Practice in Ireland recommends employers should:

• Where appropriate, use of measures such as email footers and pop-up messages to remind employees, and customers, that there is no requirement to reply to emails out of hours and an answer should not be expected e.g., putting an ‘Out of Office’ on when finishing work and adding a footer to an email signature indicating the sender’s normal hours of work.
• The sender’s message is equally important, and, when not urgent the email should state that an immediate response is not expected, or the sender should utilise the “delay send” options and set it to a specified time on the next closest working day.
• The Policy should specify that managers play a central role in the successful implementation of a Right to Disconnect policy and where possible, should be given appropriate training and support.
• Redundancy: Strengthening redundancy rights and protections, ensuring that the duty to consult collectively is determined by the number of people impacted across the business or company, rather than in one office or workplace.
• TUPE: The Government proposes to strengthen the existing set of rights and protections for workers subject to TUPE processes, although no further detail has been provided.

Family friendly rights

The Government has proposed to:

• introduce rights to bereavement leave for all workers,
• review carer’s leave (entitlement to one week unpaid in a 12-month period) and introducing entitlement to paid leave,
• review the current system of parental leave within their first year. The proposal is to make it a day one paid right, removing the current one-year qualifying period,
• make it unlawful to dismiss a woman during her pregnancy or within six months of her return to work, except in specified circumstances (details of which have not been provided).

Self-employed: Labour proposes to strengthen rights and protections to help self-employed workers including the right to a written contract, action to tackle late payments, and by extending health and safety and blacklisting protections to self-employed workers.

Enforcement

• The Government have committed to move quickly and create a single enforcement body. This has already been the subject of previous consultation ‘Good Work Plan’ (2021) as it formed part of the 2019 Conservative manifesto. We currently have various enforcement bodies such as the HSE (who deal with issues relating to Working Time Regulations, EHRC (who deal with discrimination), HMRC (who deal with SSP, NMW), and the Police (who deal with modern slavery and exploitation). This change will take some time (and funding) to establish and be granted the necessary powers of enforcement.
• The Government also plans to increase the time limit to bringing a tribunal claim from three to six months. This change will be relatively easy to achieve from a legislative point of view, but hopefully steps will be taken to ensure that the employment tribunals are more adequately resourced before this happens. There is already a considerable backlog of claims with significant delays to cases being heard, and an increase to the time limit (coupled with change in employment status and a day one right to pursue an ordinary unfair dismissal claim) is likely to exacerbate these existing delays.

It remains to be seen whether the new Government presses ahead with these reforms as previously anticipated, or whether they decide to further strengthen certain provisions before they take effect. We await the King’s Speech for some clarity over the Government’s next steps.

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This is only intended to be a summary and not specific legal advice. If you would like further information or advice, please do contact a member of our team.

Contact Us

If you have any questions on employment law, please contact a member of the team:

Selene Holden (seleneholden@greene-greene.com ~ 01284 717436)
Greg Jones (gregjones@greene-greene.com ~ 01284 717446)
Angharad Ellis Owen (aeo@greene-greene.com ~ 01284 717453)
Katie Harris-Wright (katieharris-wright@greene-greene.com ~ 01284 717442)

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