Summary of proposed Employment law changes – July 2024

During the recent state opening of Parliament and the King's Speech, the Government gave further information about its Employment Rights Bill, which will make wide-ranging and radical changes to employment law in the coming years. In advance of the publication of the full detail of the Employment Rights Bill, here is a summary of the main areas that will affect HR policies and procedures.

1. Protection from Unfair dismissal to become a day 1 right

Perhaps the area which will have the most significant practical impact is the removal of the two-year service requirement to bring an unfair dismissal claim. Making protection from unfair dismissal available from day 1 (subject to special rules for probationary periods) is expected to be included in the Employment Rights Bill.

How quickly the Government will implement this change remains to be seen. The removal of the qualifying period from the Employment Rights Act 1996 can be achieved relatively easily via secondary legislation - an Act of Parliament is not needed.

However, the Government may choose to accompany this change with non-statutory guidance or a more formal statutory code of practice setting out a minimum fair procedure for employers to follow before they can dismiss an employee during their probationary period. This would extend the time needed to implement this reform.

2. Parental leave and sick pay to become a day 1 right

It is expected that the Employment Rights Bill will make parental leave and sick pay available from day 1 (subject to special rules for probationary periods).

3. Strengthening protection for new mothers

It is also expected that the Employment Rights Bill will make it unlawful to dismiss a person who has had a baby for six months after their return to work, except in specific circumstances. 

4. More reforms to flexible working laws

Under the previous Government, reforms to the right to request flexible working took effect for requests made on or after 6 April 2024. These included:

• making the statutory right to request flexible working a "day one" right;
• removing the requirement for an employee to explain what effect, if any, their request would have on the employer and how that might be dealt with; and
• placing an obligation on an employer to consult with an employee before rejecting a request.

The Government has indicated that it intends to use the Employment Rights Bill to make more radical changes to flexible working laws. It says that it will "make flexible working the default from day one for all workers, with employers required to accommodate this as far as is reasonable".  The shape that these reforms will take remains to be seen - the proposals set out in the King's Speech are light on detail.

5. Procedural changes to SSP

Some technical changes to statutory sick pay (SSP) are expected to be introduced in the Employment Rights Bill.  These include:

• removing the requirement for earnings to be at the lower earnings limit as an eligibility criterion; and
• removing the three-day waiting period (where SSP is not paid for the first three "waiting days" in a period of incapacity for work).

6. Improved relations with trade unions

When it comes to employment issues, it is already clear that one of the priorities will be the improvement of relations between trade unions and the Government.

The Employment Rights Bill will include measures to:

• remove the requirement where strikes take place in "relevant services", such as education, ambulance and fire and rescue services, to maintain minimum service levels (MSLs); and
• simplify the statutory trade union recognition process to "ensure workers and union members have a reasonable right to access a union within workplaces".

7. Zero hours contracts - plans remain unclear

The Government says that it will use the Employment Rights Bill to "ensure 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".  This wording suggests that the Government intends to take a targeted approach to removing unfair zero hours contacts, rather than banning them outright.

 We will find out more about the approach in this area once the full detail of the Employment Rights Bill is published. 

8. A separate Bill for Ethnicity/disability pay gap reporting

The proposals to require employers with 250 or more employees to report their ethnicity pay gap and disability pay gap are not included in the Employment Rights Bill. Instead, these proposals get a separate Bill.  Implementation will raise tricky issues for employers around classifying employees' ethnicity/disability, gathering the data and processing the data safely.

As well as introducing ethnicity and disability pay gap reporting, the Equality (Race and Disability) Bill is expected to give specific rights to claim equal pay because of the protected characteristics of race and disability. 

Other proposals outlined in the Kings speech

• Ending ‘fire and rehire’ and ‘fire and replace’ by reforming the law and replacing the statutory code. It is expected that there will be a new code of practice and legal reform (although we don’t know how yet)
• Establishing a new single enforcement body, known as the Fair Work Agency, to strengthen enforcement of workplace rights.
• A new Skills England body will be set up which puts ‘employment at its heart’
• The apprenticeship levy will be reformed to provide for better training and upskilling opportunities as people are working for longer before retiring.
• A new Pension Schemes Bill will help average earners save more than £11K more in their pension

Next steps

• Publication of the full detail of the Employment Rights Bill

The briefing notes that support the King's Speech stress the Government’s plan to publish the full text of the Employment Rights Bill in the first 100 days in power. This means that, if the Government sticks to this timetable, the Employment Rights Bill will be published by 12 October at the latest.

• Expect a long lead-in time for many of the proposals

While the Government's large majority should make it easier to get legislation through Parliament, many of the proposals in the Employment Rights Bill will need public consultation.

In particular, there is likely to be consultation on the detailed secondary legislation and/or non-statutory government guidance/statutory codes of practice necessary to implement some of the more substantial changes, including:

• the removal of the two-year service requirement to bring an unfair dismissal claim, which will mean that schools will have to review how they induct, train and manage new recruits and how they deal with employees who are not performing during their probationary period;
• "making flexible working the default from day one for all workers, with employers required to accommodate this as far as is reasonable", which goes significantly further than the flexible working reforms introduced by the previous Government on 6 April 2024; and
• the introduction of mandatory ethnicity and disability pay gap reporting for larger organisations, which adds significant complexity to the current pay gap reporting regime.

The complexity of many of the proposals, the time required for the Bill's passage through Parliament, and the need for public consultation all mean that we are unlikely to see most of the major legal changes introduced before 2026 at the earliest.

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