On July 17, 2024, King Charles delivered the King's Speech, which sets the Government’s legislative agenda for the next Parliamentary Session. In this, the new Labour Government announced an ambitious agenda with some 40 Bills planned for the 2024-2025 Parliament—the highest numbers of Bills proposed in one year since the 2005-2006 parliamentary session.

Included were two key employment-related Bills. The King’s Speech promised:

• To introduce an Employment Rights Bill within the first 100 days – this was accompanied with the comment that the Government “is committed to making work pay and will legislate to introduce a new deal for working people to ban exploitative practices and enhance employment rights.”
• To publish a Draft Equality (Race and Disability) Bill to “enshrine in law the full right to equal pay for ethnic minorities and disabled people.”

Additionally, the speech stated that the Government will deliver a genuine living wage that accounts for the current cost of living and will “remove the discriminatory age bands to ensure that every adult worker benefits.”

So, the new Government is taking its manifesto commitment to deliver ‘Change.’

As we have previously reported, the current proposals touch on all aspects of employment law, leading to arguably the largest reform of employment law in a generation.

What changes are being proposed?

Employment Rights Bill

In the background briefing notes to the King’s Speech, the Government confirmed that it will introduce an Employment Rights Bill within 100 days to “deliver on policies set out in the Plan to Make Work Pay that require primary legislation to implement.” It also confirms that the Bill will apply to Great Britain only.

Key policies said to be included in the Bill are:

• Day one employment rights: making parental leave, sick pay and protection from unfair dismissal available for all workers from day 1 on the job, but ensuring that employers can operate probationary periods to assess new hires.
• 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 their shifts with proportionate compensation for any shifts cancelled or curtailed.
• Reforming the law on ‘Fire and Rehire’ and ‘Fire and Replace’ practices
• Making flexible working the default from day-one for all workers
• Strengthening Statutory Sick Pay
• Strengthening protections for new mothers: by making it unlawful to dismiss—save in specific circumstances—for 6 months after their return to work.

Establishing:

• A new Single Enforcement Body, also known as a ‘Fair Work Agency,’ to strengthen enforcement of workplace rights.
• A Fair Pay Agreement in the adult social care sector and, following review, assess how and to what extent such agreements could benefit other sectors.

In respect of collective bargaining and rights:

• Updating trade union legislation by removing restrictions on trade union activity.
• Simplifying the process of statutory recognition and introducing a regulated route to ensure workers and union members have a reasonable right to access a union within workplaces.
• Reinstating the School Support Staff Negotiating Body.

There are other policies included in the Plan to Make Work Pay, for example, strengthening rights in respect of whistleblowing, harassment and sexual harassment, and strengthening rights and protections in respect of collective consultations for redundancies and for TUPE.

Given the new Government has made it clear it wants to proceed with all its proposals in the Plan to Make Work Pay, we will have to see when and how these other topics will be addressed—whether in the Employment Rights Bill or otherwise.

Draft Equality (Race and Disability) Bill

In the background briefing notes to the King’s Speech, the Government also commits to introducing a draft Bill to “tackle inequality for ethnic minority and disabled people,” and suggests that the draft Bill will likely extend and apply to Great Britain. The draft Bill promises to:

• enshrine in law the full right to equal pay for ethnic minorities and disabled people; and
• introduce mandatory ethnicity and disability pay reporting for large employers (i.e., those with 250 or more employees).

Again, although not listed in the background briefing note, other proposals on equal pay and pay gap reporting were included in the Plan to Make Work Pay, for example: to include outsourced workers in gender pay gap and pay ratio reporting, ensuring outsourcing services can “no longer be used by employers to avoid paying equal pay” and requiring large employers to develop, publish and implement action plans to close gender pay gaps. It is not clear when the Government plans to introduce those changes and if these will be included as part of this draft Bill.

How soon could we see change?

The Government clearly wants to hit the ground running and deliver on the campaign commitment to 'Change.' But just how quickly will the law change?

Due to a few factors and based on what has been said openly so far, we consider that significant change could take time. For example:

• There is a lot of work involved behind the scenes when there is a change in Government, so it is likely that the Civil Servants helping the Government deliver this change are under some pressure—trying to implement significant reform while also trying to carry out “business as usual.” Despite the new Government’s ambitions, it could be hampered by those resourcing demands. Other bodies such as Acas, which will be required to help implement reforms through Codes of Practice or Guidance, will also be put under resourcing pressure.
• The Employment Rights Bill could be introduced immediately and has been promised any time in the first 100 days (by October 12^th if the date Labour was elected is used). However, it is likely that the more significant changes will not be implemented for another 12-18 months at the earliest. This is because:
  
  • Even the Employment Rights Bill may be introduced by mid-October, it will need to go through the full legislative process in both the Houses of Commons and House of Lords, and may be subject to amendments during the process which can take several months (even with Labour’s big majority in the House of Commons).
  • Labour’s Plan to Make Work Pay indicated that it plans to fill in a lot of the detail through regulations rather than primary legislation. So even once the Employment Rights Bill becomes the Employment Rights Act, there will likely be a lot of secondary legislation to fill in the gaps. Labour has said it will consult widely before putting those regulations into place. 
  • Finally, further time will be needed for updated or new Acas Codes of Practice (which are likely needed on several topics, including unfair dismissal, probation periods and reforms to flexible working). These will also need consultation and approval before they come into force.

The new Government will have a tricky task on its hands; on the one hand it will be eager to show voters and unions it is keeping to its commitments to make change quickly, whilst on the other trying to keep businesses on side to ensure they have time to prepare for changes. 

What can employers do now?

Don’t panic: As set out above, there will hopefully be time to prepare before changes come in.

Prepare now: Simple steps build a great foundation on which to overlay future developments. Employers can:

• Review and update existing policies and procedures.
• Refresh any training for managers and HR on key processes (such as managing probation or flexible working requests).
• Keep on top of any developments – we will be monitoring developments closely, reporting on key changes and delivering a series of webinars as the changes to the law become clear.