King's Speech confirms major employment law reforms

At a glance

• The King's Speech has today been given to both houses of Parliament. 
• In line with the Labour party's pre-election plan to make work pay and deliver a new deal for working people, the speech, along with accompanying background briefing notes, has confirmed a significant number of major employment law reforms.
• The most impactful include Labour's much trailed day one right to protection against unfair dismissal, and mandatory ethnicity and disability reporting for large employers.

Here we set out a summary of the new government's proposals.

A new Employment Rights Bill

The government will introduce a new Employment Rights Bill (ERB) which is aimed at banning exploitative practices and enhancing employment rights. This will be introduced within 100 days, meaning that we can expect to see it before the end of October 2024. The key takeaways from the ERB are that it will:

• Make parental leave, sick pay and protection from unfair dismissal available from day one on the job for all workers. However, it will continue to ensure employers can operate probationary periods to assess new hires.
• Ban 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 shift with proportionate compensation for any shifts cancelled or curtailed.
• Reform fire and rehire laws to provide effective remedies. It will also replace the previous government's statutory code.
• Strengthen Statutory Sick Pay by removing both the lower earnings limit, to make it available to all workers, as well as the waiting period.
• Make flexible working the default from day-one for all workers, with employers required to accommodate this as far as is reasonable, to reflect the modern workplace.
• Strengthen protections for new mothers by making it unlawful to dismiss a woman who has had a baby for six months after her return to work, except in specific circumstances.
• Establish a new Single Enforcement Body, also known as a Fair Work Agency, to strengthen enforcement of workplace rights.
• Update trade union legislation, removing unnecessary restrictions on trade union activity – including the previous government’s approach to minimum service levels.
• Simplify the process of statutory recognition and introduce a regulated route to ensure workers and union members have a reasonable right to access a union within workplaces.

A new draft Equality (Race and Disability) Bill

The government will also publish a draft Equality (Race and Disability) Bill (ERDB), with provisions mirroring the existing obligations under the Equality Act 2010. The two key measures proposed are:

• To enshrine in law the full right to equal pay for ethnic minorities and disabled people, making it much easier for them to bring unequal pay claims.
• Introduce mandatory ethnicity and disability pay reporting for larger employers (those with 250+ employees) to help close the ethnicity and disability pay gaps.

In addition to the reforms above, the government also proposes to:

• deliver a genuine living wage that accounts for the cost of living. It will also remove the existing age bands to ensure every adult worker benefits; and
• reform the apprenticeship levy.

On the face of it, many of these measures are attention-grabbing and there is no doubt that employers will need to quickly take stock of how these reforms will impact on their business. As always, however, the devil is in the detail and it remains to be seen how these measures will be implemented in practice. Once published, much scrutiny will need to be given to the legislative drafting so that a comprehensive assessment can be made of the steps needed to be taken.