In late May, the Labour Party published “Delivering a New Deal for Working People”, outlining planned reforms to employment law were it to win the general election. This was an ambitious agenda and it seemed unlikely that all the reforms could be delivered immediately.
Now that the Labour government is in office, the King’s Speech on 17 July confirmed that an Employment Rights Bill (the Bill) will form part of the legislative agenda in the next Parliamentary session.
The Employment Rights Bill
From the papers accompanying the King’s Speech, the key objectives of the Bill that are most relevant to clients will be to:
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Ban “exploitative” zero-hour contracts in order to end one-sided flexibility. Workers will have a right to a contract reflecting the hours they normally work and will be entitled to reasonable notice of and compensation for shift changes or cancellations.
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End “fire and rehire” – where employers dismiss employees and offer them re-engagement on less favourable contracts – by providing effective remedies and replacing the existing statutory code on the topic.
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Give employees “day one” rights to parental leave, sick pay and (most significantly) unfair dismissal. However, it appears that there will be some flexibility allowing employers to operate probationary periods for new hires.
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Require employers to accommodate flexible working “as far as is reasonable”. This suggests that it will be harder for employers to refuse flexible working requests in future than it is under the current flexible working regime.
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Make it unlawful to dismiss a maternity returner for six months after their return to work. There will be exceptions in “specified circumstances”, which will presumably include situations such as gross misconduct or business or workplace closure redundancies.
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Establish a Single Enforcement Body to enforce workplace rights.
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Update trade union legislation, which is likely to involve repealing minimum service level requirements and restrictions on industrial action contained in the Trade Union Act 2016. The Bill will simplify the statutory trade union recognition process.
Alongside the Bill, the government is planning to remove the minimum wage age bands to ensure that all adults benefit from the national living wage.
Draft Equality (Race and Disability) Bill
The King’s Speech also announced a draft Equality (Race and Disability) Bill (the Equality Bill) to tackle issues of equal pay. In particular, the Equality Bill will make it easier for workers from an ethnic minority or with a disability to progress an equal pay claim. Employers with 250 or more employees will be required to report on ethnicity and disability pay gaps.
Next steps
It’s helpful to have confirmation of the areas of “Delivering a New Deal” the government will take forward initially. However, much of the detail of how the reforms will work in practice won't be available until the Bill and the Equality Bill are published.
For example, at this stage we don't know how probationary periods will operate once unfair dismissal becomes a day one right, or what standard will apply when deciding whether an employer has acted reasonably in refusing a flexible working request. Until the fine print is available, it’s difficult to assess exactly how significant the changes will be.
Authored by Jo Broadbent, Anvita Sharma and Ed Bowyer.
