The Labour Party's election manifesto proclaimed that employment law in Britain is no longer fit for the modern economy.
In May 2024, Labour detailed its plans to "make work pay" by delivering a "new deal" for working people within the first 100 days of government.
In light of Labour's landslide election victory last week, our Employment Lawyers consider our new government's key pledges and what they will mean for businesses and employees in the coming months.
The government's proposal to remove qualifying service for employees to raise unfair dismissal claims to an employment tribunal is at the forefront of its agenda.
This is currently two years' service (less the one-week grace period), but under the current proposals, this right would exist from the first day of employment, which would represent the greatest protection for employees in this area since unfair dismissal legislation was introduced in 1971.
For employers, this would potentially mean that a fair process, in accordance with the ACAS Code of Practice on disciplinary and grievance procedures, would need to be undertaken with an employee, whether they have been employed for thirty years or just for one day.
Details are uncertain, though the government has previously confirmed this would not prevent fair dismissals, including during a "probationary period with fair and transparent rules and processes."
As such, it is envisaged that the use of probationary periods (and the circumstances in which such periods can be extended) will become a key consideration for employers moving forward.
It is also anticipated that recruitment processes will need to become far more robust.
However, the details of how this reform will be implemented and applied still need to be clarified, so we can only speculate how the changes might be effected.
For example, failing to pass a probationary period might become one potentially fair reason to dismiss someone, and/or the ACAS Code will likely need amending to take into account dismissals during probationary periods.
The government has stated that changes will be introduced in the next 100 days (by 12 October 2024), and whilst the legislation does allow for this to be effected quickly, it has also stated that a full consultation will take place.
Given this and Parliament's upcoming summer recess and considering potential implementation periods, it seems likely that this will be in force later in 2025, but we await clarification.
The government has proposed strengthening existing SSP provisions by removing the lower earnings limit for eligibility and the waiting period (currently at £123.00 per week and 3 days, respectively).
As a result, workers would be entitled to payment on the first day of sickness, regardless of earnings.
These reforms are anticipated to be introduced very quickly, although this is yet to be confirmed.
It remains to be seen whether the government will increase the rate of SSP, currently £116.75 per week (as of 6 April 2024), which is low compared with other countries.
The government has also committed to improving access to "parental leave" because it "does not currently support working families" and to make this a day-one right.
It's not clear what the reference to parental leave means. In legal terms, parental leave is the right to take up to 18 weeks unpaid leave for a child at any time before they turn 18, but this is rarely utilised.
It is reserved for those employed for one year or more, so this could be changed to a day one right quickly.
However, the government could also be referring to parental leave more generally or to paternity leave (which currently requires six months' service) and that the proposal is to make this a day-one right.
The government has also said it will review the existing family leave framework within the first year of its term anyway, so we await clarity.
The government has also proposed to amend the "arbitrary" and "arcane" limitation period for bringing claims to the employment tribunal from 3 months to 6 months (which will match the limitation periods for statutory redundancy pay and equal pay claims).
Combined with the proposal to strengthen unfair dismissal protection, this will inevitably result in increased Tribunal claim volumes.
It remains unclear when the government proposes to introduce such reforms.
An earlier green paper had previously mentioned the government removing the statutory cap on compensation, presumably in relation to unfair dismissal, but this was not mentioned at all in its "New Deal," and so it remains to be seen whether this will materialise in the future or whether it is no longer part of the proposed reforms.
Despite advancements in the national minimum wage in recent years, the government proposes to take this further by ensuring it reflects the cost of living rather than the current position as a basis for average earnings.
An amendment to the remit of the Low Pay Commission is envisaged to facilitate this. Furthermore, a proposal has also been made to abolish the existing age bandings for pay and introduce a flat-rate minimum wage for all adult workers.
The government could choose to implement these as soon as April 2025.
The Tips Act has previously received Royal Assent and was due to come into force on 1 October 2024.
Our new government has also pledged to strengthen the law to ensure hospitality workers receive their tips in full and to facilitate workers being able to decide how tips are allocated.
As such, it seems likely that the government will enact the Tips Act, as previously planned, in order to support these proposals.
The government has committed to updating trade union legislation by removing "unnecessary restrictions" and "ensuring industrial relations are based around good faith negotiation and bargaining".
The government plans to achieve this in various ways, including repealing the Trade Union Act 2016, the Minimum Service Levels (Strikes) Bill and the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022.
These repeals are likely to be effected quite quickly through the Employment Rights Bill when this receives Royal Assent.
It will also change the current system, which requires ballots to be sent via the post, and introduce modern, secure, electronic balloting and workplace ballots.
The process for union recognition will also be simplified, and the rule requiring unions to demonstrate that at least 50% of workers are likely to support their claim before the process commences will be removed.
Additionally, employers will be required to inform new workers of their right to join a union and include this right in their contract/written particulars of employment.
Referred to as "securonomics", the government has proposed to introduce a range of policies intended to realign the balance of power in employment relationships and give working people security in their day-to-day lives.
These are key pledges, and we expect them to take effect within the next two years.
The government had previously supported a blanket ban on all zero-hour contracts, which failed to provide workers with a guaranteed number of working hours.
However, its current proposal concerns a ban on such contracts that are used in an exploitative or unfair manner.
It remains unclear how these terms will be defined in any legislative amendment, and this proposal is likely to require detailed consultation.
For those zero-hour contracts that remain, the government has committed to ensuring workers are provided with reasonable notice of any change of shifts or working time and proportionate compensation for any shifts cancelled or curtailed.
The 'fire and rehire' practice is often used as a mechanism for unilaterally imposing changes to workers' contractual terms under the threat of dismissal.
The government has proposed to end the use of 'fire and rehire' by reforming the law and replacing the "inadequate" Statutory Code of Practice published by the outgoing government.
In addition to the recent developments in flexible working requests (which became a day one right from 6 April 2024), the government has committed to extending these rights further, proposing to "include opportunities for flexi-time contracts and hours that better accommodate school terms" by making flexible working the norm from day one for all.
Details on this remain unclear, but any measures are anticipated to reduce employers' ability to restrict flexible working arrangements.
With the rise of homeworking in the post-pandemic era, the distinction between the office and home has become blurred.
To combat this, the government is also proposing giving employees the "right to switch off", which would prevent employers from contacting workers outside of working hours.
Clarity on the proposed changes is still awaited, but the government has cited Ireland and Belgium as two potential models in this area.
Sweeping reform is also proposed for the UK's three-tiered employment status system, which currently categorises individuals as employees, workers, or self-employed.
The distinction in law is significant as different rights and protections are afforded to individuals in each category.
The government proposes to move to a single-worker status, with the only distinction being between workers and the self-employed.
As the cases of Uber and Deliveroo demonstrate, this is a very complex area of law, and any reform will require detailed and extensive consultation.
The government has acknowledged that such changes are unlikely to happen quickly and has only committed to consulting on this within the next year.
The government has proposed to extend existing Equal Pay legislation, which currently only applies in the context of gender pay disparities, so as to include equal pay claims on the basis of ethnicity and disability as well.
This is already a complicated area, and such changes will only add to it.
It is therefore envisaged that the government will consult on these proposals before proceeding.
Alongside this, it is also proposed that Ethnicity Pay Gap Reporting and Disability Pay Gap Reporting will be introduced as mandatory for larger employers (with over 250 employees), in the same way as Gender Pay Gap Reporting is currently required.
The King's Speech will be delivered on 17 July 2024, and a new Employment Rights Bill will likely be among the government's plans for the next session of Parliament.
It is unlikely to contain everything outlined in the New Deal, though it will be interesting to monitor which of these proposals the government includes and considers as its most important.
It is useful to remember that any Bill requires assent from both the House of Commons and Lords before being signed into law, which can take a great deal of time.
Some proposals may require subordinate legislation or statutory codes of practice to take full effect.
Even for changes contained within the Employment Rights Bill, these could take months or years to become law.
In the meantime, we await further information and clarity from the government on the proposed employment law reforms.
Myerson's future updates on such changes will be published in due course.
The government's "New Deal" from which the above has been taken can be found here.
We act for both businesses and individuals, so if you are an employee seeking employment advice, we can help.
If you want to speak to a professional employment lawyer regarding any topics discussed in this article, please contact Myerson Solicitors on:
Kurt has over 2 years of experience acting as an Employment solicitor. Kurt has specialist expertise in disciplinary, grievances, disability processes, employee consultations, redundancies, and TUPE.
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