The King's Speech: New Proposals and the Implications for Employers

The King’s Speech during the state opening of parliament this week formally announced the government’s plan to introduce several important changes to employment law, to provide a ‘New Deal for Working People’ with plans to “ban exploitative practices and enhance employment rights.”

According to Labour’s pre-election manifesto, the new Employment Rights Bill is likely to include significant proposals, many of which will be subject to consultation. 

What are the key changes?

Ban on one sided flexibility in relation to ‘exploitative’ zero-hour contracts

New legislation is to be introduced to provide workers with ‘a baseline level of security and predictability’ to include the right to a contract that reflects the hours that they regularly work (based on a 12-week reference period). Employers should review any zero hours arrangements to risk assess the potential impact of the introduction of a future change and prepare to update contracts and practices. 

Statutory Sick Pay (SSP)

There are proposals to remove the lower earnings limit so that it is available to all workers and remove the three-day waiting period for SSP.

This will mean that employers will be required to pay SSP from day one of an employee’s sickness absence and will require a change of policy, practice and contractual terms that base sick pay entitlement on the current statutory rule that the first 3 days remain unpaid.

Single Enforcement Body

There will be a creation of the Fair Work Agency, with trade union and TUC representation to enforce workers rights. This will include powers to inspect workplaces and take targeted and proactive enforcement to uphold employment rights and act against exploitation. Further information is awaited to confirm how this will work in practice.

Unions

There will be a simplification of the statutory process for union recognition to ensure that workers and union members can have access to a union (and meeting facilities) within the workplace.

The government will also remove the Conservative government’s law that aimed to ensure that there was a minimum level of service during strikes.

Wages

There is to be a removal of age bandings that are currently applied to calculate the minimum wage.

The government has also confirmed their commitment to a genuine living wage to account for the real cost of living.  Overall wage roll costs should be re budgeted in line with these proposals.

Social care sector (and beyond)

A Fair Pay Agreement will be established for those that work within the adult social care sector. The agreement will establish national terms and conditions as well as fair pay rates with the intention that this will be extended to other sectors. 

Fire and rehire

It is proposed that the practice of terminating employment and offering new contracts on reduced terms will ‘end’. A new statutory code and enforcement remedies will be introduced, together with guidance for employers.

‘Day 1’ Rights

Establishing day one rights for parental leave, sick pay as well as protection from unfair dismissal. Though it is proposed that probationary periods will assess new hires and we await further information on the potential impact.

Maternity returner protection

It will be unlawful to dismiss an employee who has had a baby for six months after ‘return to work (except in specific circumstances, to be confirmed).

Equality (Race and Disability) Bill

This is a proposal to introduce the mandatory reporting of pay on ethnicity and disability (similar to the current gender pay gap reporting requirements).

The new legislation will apply to larger employers who employ more than 250 employees and it will require careful consideration given the data collection issues arising (particularly as it is not currently a requirement to disclose protected characteristics in most circumstances).

For advice in relation to any of these changes and how they may impact you or your business, please contact our team today and our team will be happy to provide assistance.

Contact Our Employment Team