UK Employment Law Reforms: What’s Next for Autumn 2024 and Beyond

Changes in UK Employment Law: As the summer break draws to an end and autumn approaches, many of us—including the new Labour Government—will be returning to work and school when Parliament reconvenes on September 2, 2024.

Labour has made it plain that there will be significant changes that will impact employers while it is in government, and it plans to take significant action in that direction during its first 100 days in office, which ends on October 12, 2024. We covered in our piece the ambitions of the newly formed Labour Government in the wake of the election results and Sir Keir Starmer’s July 5 appointment as prime minister.

Since then, the King’s Speech on July 17, which outlined the New Labour government’s priorities for the upcoming months, has added more flesh to the bone. The Employment Rights Bill and the Draft Equality (Race and Disability) Bill—discussed below—are the two employment law bills that were announced.

What is covered by the two employment bills?

1. Employment Rights Bill

It is expected that the Employment Rights Bill, which will be introduced to Parliament by October 12, 2024, would serve as the main piece of legislation needed to implement Labour’s Plan to Make Work Pay: Delivering A New Deal for Working.

The King’s Speech states that the following policies will be covered by the Employment Rights Bill:

1. Labor’s proposal to abolish zero-hours contracts that are deemed “exploitative.” (Workers will be entitled to a contract of employment with an average number of hours that corresponds to their work schedule based on a reference period).
2. Putting an end to the practices and rehiring people as they happen. The objective is to reinforce and substitute the recently enacted statutory code on July 18, 2024, as originally proposed by the former Conservative Government. View our piece about these modifications.
3. Important employment rights, such as parental leave, sick pay, and the right to an unjust dismissal, are applicable to all employees from the first day of work (new hires may be subject to probationary periods).
4. Reform of trade union laws, such as removing barriers to union activity, streamlining the statutory recognition process, and granting unions access to workplaces for the purpose of recruiting and organising.
5. Eliminate the waiting period and reduce earnings cap from the SSP qualifying requirements.
6. Making flexible work arrangements the norm from the moment of hire, with companies expected to comply to the greatest extent possible.
7. It is illegal to fire mothers for six months following their return to work, unless certain conditions are met.
8. To improve the enforcement of workplace rights, a single enforcement body should be established.
9. Establishing a fair pay agreement in the adult social care sector with the intention of determining whether or not other sectors could also gain from such an agreement.
10. Re-establishing a national bargaining body for school support staff to negotiate for equitable wage rates, career advancement opportunities, and terms and conditions.

It’s possible that the Employment Rights Bill contains additional measures that the government declared prior to taking office. For specifics on Labour’s manifesto promises and recommendations, see our articles on the subject.

2. Draft Equality (Race and Disability) Bill

A second employment law bill was announced as part of the King’s Speech, and its goals are to:

1. Extend the legal guarantee of equal pay based on a person’s gender to encompass rights to equal pay for people with d1sabilities and members of ethnic m1norities, facilitating their ability to file equal pay claims.
2. In order to close the disparity in ethnicity and disability pay, mandated reporting on these topics should be made necessary for firms employing more than 250 individuals.

To put this in perspective, the background briefing notes for this draft Bill from the King’s Speech 2024 state that, on average, disabled people earn less than non-disabled people (there was a 13.8% disability pay gap in 2021) and that the majority of ethnic minority groups earn less than the White British group.

When do you think these modifications will be implemented?

Before putting its New Deal into effect, Labour has pledged to do a thorough consultation. It’s possible that this may involve a consultation on a draft Employment Rights Bill, although this is not yet known. The law will be presented to Parliament by October 12 of this year, as indicated by its pledge to “introduce” it within the first 100 days. The Bill would have to pass both chambers of Parliament in the customary manner. To fully implement some of the new, suggested employment policies, codes of practice and secondary legislation would surely be required.

Furthermore, there may be a delay because it is customary to propose new employment laws twice a year, in October and April. That is not to imply, though, that a Labour Government would have to adopt this strategy. In summary, it may take several months to several years or longer for recommendations in an Employment Rights Bill to become legislation.

The Draft Equality (Race and Disability) Bill might not become statutory law until the conclusion of the first term of government, at the very least. It might take some time to put Labour’s plans for disability and ethnicity pay gap reporting into effect.

Are there any upcoming plans to modify employment law?

Labour might potentially score rapid wins by implementing the following low hanging fruit amendments to employment legislation from Autumn 2024 to April 2025.

• The National Minimum Wage

The Labour Government has declared the removal of the age brackets for the national minimum wage (NMW) for adult workers, which it views as discriminatory, and the introduction of a true living wage that accounts for the cost of living. It is acknowledged that as the amendments do not call for primary legislation, they will be accomplished independently of the Employment Rights Bill. Therefore, it is entirely probable that as early as April 2025, a new minimum wage that is sensitive to the cost of living would be implemented.

• Statutory sick leave benefits

In an effort to uphold the principle of “one day, one right,” Labour plans to enhance workers’ access to Statutory Sick Pay (SSP) by eliminating the three-day waiting period and the lower salary cap. It is expected that these modifications will be part of the Employment Rights Bill and that they might be put into effect as early as April 2025 with moderate ease.

• Tips Act

A new law mandating businesses to make sure all tips, gratuities, and service charges are distributed equally and openly among their employees is already scheduled to take effect in October 2024. The Labour Party has affirmed that it intends to improve the legislation pertaining to the tipping of hospitality workers. It appears that Labour intends to move forward with enacting the current legislation, which would be an expedient victory. For more information, see our article.

• Act of Predictable Terms

If their current pattern is unpredictable, this draft law aims to give employees the opportunity to request (not to have) a more predictable one. This Act has already been ratified by the King, but rules still need to be implemented. Labour may utilise it to advance its goals for zero-hour workers as it is currently scheduled to go into effect in September 2024. However, it appears that Labour has not stated its plans in this regard to date.

 

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