The State of UK Employment Law Reforms Post–King’s Speech

As projected, the King’s Speech of 17 July 2024, outlining the UK government’s legislative agenda, made reference to the Labour Party’s “New Deal for Working People” among other proposed legislation for the Party’s first 100 days. For added clarity, the prime minister’s briefing notes released in tandem with the speech further elucidate Labour’s key legislative proposals for improving employment rights.

As anticipated in our prior LawFlash, the King’s Speech on 17 July referred to the Labour Party’s commitment to “making work pay” and to “legislate to introduce a new deal for working people to ban exploitative practices and enhance employment rights”. The King’s Speech also made mention that “legislation on race equality will be published in draft”. While the speech itself only made limited references to these two separate Bills (an Employment Rights Bill and a draft Equality (Race and Disability) Bill), the prime minister’s briefing notes provide further details on the Labour Party’s legislative proposals.

LABOUR’S LEGISLATIVE PROPOSALS

According to the briefing notes, the Employment Rights Bill will be introduced within the Labour Party’s first 100 days in office (i.e., by 12 October 2024).

The Bill will reportedly deliver on Labour’s “New Deal for Working People” in full, which the briefing notes specify as including commitments to the following:

• Banning zero-hour contracts and introducing a right for workers to a contract reflecting the number of hours they regularly work and for all such workers to get reasonable notice of changes in shifts with proportionate compensation for shift cancellations or curtailments
• Ending so-called “Fire and Rehire” practices by providing for effective remedies in law and replacing the previous government’s statutory code on “Fire and Rehire”
• Making parental leave, sick pay and protection from unfair dismissal day-one rights (subject to rules regarding probationary periods)
• Strengthening statutory sick pay protection by reducing the earnings threshold for eligibility
• Making flexible working the default from day one for all workers
• Prohibiting the dismissal of a woman who has had a baby for six months after her return to work (subject to specific circumstances)
• Establishing a Fair Work Agency to strengthen the enforcement of workplace rights
• Updating trade union legislation (e.g., by repealing the law on minimum service levels in relation to industrial action)
• Simplifying the process of statutory recognition for trade unions and introduce a regulated route for workers and union members to have reasonable rights of access to unions within workplaces

There are a few notable changes from the Labour Party’s published proposals from the briefing notes. For example, the plan to merge employee and worker status, amend collective redundancy consultation thresholds, and change the timeframes for filing claims with Employment Tribunals are not expressly mentioned. That being said, we expect this is a reflection of the summarising nature of the briefing notes rather than a change in Labour’s plans.

According to the briefing notes, the Draft Equality (Race and Disability) Bill will introduce mandatory ethnicity and disability pay reporting for employers with 250 or more employees. No further details are provided on the applicable requirements or sanctions for non-compliance, however, it is expected they would closely mirror the existing gender pay reporting requirements. The Draft Bill will also enshrine in law the full right to equal pay for ethnic minorities and disabled people, which, according to the briefing notes, will make it easier for individuals within ethnic minorities and those with disabilities to bring unequal pay claims.

WHAT COMES NEXT

There will be further details in the draft legislation when introduced. While the Labour Party has committed to introducing the Employment Rights Bill within 100 days, there would be a period of time before it actually becomes Law (e.g., the Bill will need to pass through the House of Commons and House of Lords), and some of the measures may only take effect upon the publication of secondary legislation and/or codes of practice. Accordingly, it is unlikely that any of the measures highlighted above or in Labour’s prior proposals will take effect this year.

Further, the Equality (Race and Disability) Bill is expressly labelled as a draft bill. As a result, we expect this will not be prioritised to the same degree as the Employment Rights Bill and will likely be subject to prior consultation before implementation. Given the much-publicised challenges regarding the implementation of other non–gender-related forms of mandated pay reporting, it remains to be seen whether this Draft Bill—or perhaps just the provisions relating to mandatory ethnicity and disability pay reporting within it—will actually see the light of day.

Morgan Lewis lawyers stand ready to assist employers in keeping abreast of the anticipated changes and the applicable implementation timelines to appropriately plan for the impacts the changes could have on their workforce.