The King’s Speech – what’s new for employment law?

In the lead up to the UK general election, Sir Keir Starmer promised to bring in significant changes to employment and immigration law within 100 days of power. In the recent King’s Speech, it was confirmed that a new employment bill will be in force from October 2024, incorporating Labour’s proposals, “in full”.

The Employment Rights Bill – the proposals

Labour’s proposals in their pre-election manifesto were wide-ranging and potentially historic for employees and their employers. A shake-up of the employment landscape was anticipated, with the King’s Speech providing an overview of the proposals that the government are planning to implement, although the speech did not give many more specific details of the changes that are going to be made.

The proposals included increasing the minimum wage into what’s being called a “genuine living wage”, in order to take into account the cost of living. Other changes proposals mentioned in the speech included:

• Confirmation of the removal of “discriminatory age bands”. The current National Living Wage is only payable to those 21 years and older, so it seems as though all workers aged 16 and over could soon be entitled to the same wage. Alternatively, it could be argued that this additional cost may actually serve to reduce employment opportunities for 16 year olds.
• The banning of “exploitative” zero-hour contracts. The ban would ensure workers have a right to a contract that reflects the number of hours they regularly work. Contracts must ensure that workers get reasonable notice of any changes in shift, with “proportionate compensation” if any planned shifts are cancelled by the employer. These changes appear reasonable and contrast with previous Labour proposals which called for a wholesale ban.
• Ending ‘fire and rehire’. This is to prevent workers from being victims of “bullying threats” when an employer seeks to change terms and condition of employment. A statutory code of practice was issued by the previous government in February 2024, but the King’s Speech refers to this this as “inadequate”. Despite its ‘inadequacies’, the government has allowed the existing legislation to come into force on 18 July 2024, so it remains to be seen what further changes will be made.

Day-one entitlements

As anticipated and shared in HCR Law’s recent Future Workspace election series, The King’s Speech included significant announcements regarding day-one entitlements for employees. Employees will be entitled to the following benefits from the very first day of employment:

• Protection against unfair dismissal, meaning that employers will have to have a fair reason and follow a fair and reasonable procedure when dismissing any employee. Currently, an employee has to be employed for two years before acquiring this right, although there are some limited exceptions.
• An entitlement to parental leave, rather than having to wait one year, as is the current position. Currently, parental leave is unpaid and an employee is entitled to 18 weeks’ leave for each child and adopted child, up to their 18th birthday.
• An entitlement to sick pay: employees currently only receive sick pay from the fourth day of absence. At present, only employees earnings a minimum of £123 per week are eligible, but this lower earnings limit will be scrapped so that all employees will be entitled to sick pay from day one.

Further day-one rights are to include:

• Making flexible working “the default from day one”. The Employment Relations (Flexible Working) Act 2023 provides this entitlement to employees, so it is unclear what additional changes will be made.
• Making it unlawful to dismiss a pregnant woman for six months after their return from maternity leave, except in specific circumstances. The Protection from Redundancy (Pregnancy and Family Leave) Act 2023 currently offers extended protection to employees from being made redundant for 18 months after their expected week of childbirth, but this proposal suggests that the legislation will protect returning employees even further. We will await details as to how this could apply in practice.
• Establishing the ‘Fair Work Agency’ to “strengthen enforcement of workplace rights”. No details have been given as to what this means in practice.
• Creating fair pay agreements in the adult social care sector and in schools.
• “Updating trade union legislation so it is fit for a modern economy”. This will result in a reversal of the previous government’s legislation Strikes (Minimum Service Levels) Act 2023, which means that employers can use staff to cover work during periods of strike action in certain situations, thus minimising the impact of the strike action itself.

Which employment law proposals were not included?

While the proposals which were mentioned covered a lot of ground and will no doubt be of interest to employers, employees and potential employees alike, no mention was made of other proposals made in the lead up to the election. These included:

• Large employers – those with over 250 employees – will need to produce ‘Menopause Action Plans’ to outline how they will support employees experiencing menopause. The Equality and Human Rights Commission published guidance in February 2024 to advise that menopause symptoms could amount to a ‘disability’, meaning that an employer needs to consider making reasonable adjustments to remove any disadvantage to the employee, such as offering fans or separate quiet or rest rooms.
• Increasing the time window for employees to bring a claim to tribunal to six months. Currently, employees have three months to pursue most claims, which can technically be extended by a further 10 weeks via the ACAS early conciliation process, but six months for claims relating to redundancy payments.
• A move away from the three categories of worker – employee, worker and self-employed – and a move towards a single status of worker, and a two-part framework for employment status to differentiate between workers and people who are self-employed.
• Increasing protection for whistleblowers, including updated protection for women who report sexual harassment at work.

The proposals which were not mentioned are fairly complex in terms of what they are trying to achieve, so it is little wonder that these have not been addressed as yet. It will be interesting to see if they do come into force within the first 100 days.

The proposed Employment Rights Bill is anticipated to bring significant changes to businesses and employees alike. If you would like advice, please get in touch with our Employment and Immigration team.