By Samer Cheaitou, Solicitor
As you will no doubt be aware, the UK went to the polls on 4 July 2024, electing the first Labour Government in 14 years with a landslide majority of 174 seats. In the recent King’s Speech, the Government set out its legislative agenda, which includes introducing an Employment Rights Bill within its first 100 days. I will consider below some of the changes that may be included in the Government’s planned Bill.
Labour’s plans
A few weeks before the election, Labour published a paper titled “Labour’s Plan to Make Work Pay”. In the paper, Labour set out its proposals to increase employment rights and make work more secure.
It should be stressed at the outset that the proposals set out in the paper are just that – proposals. A period of consultation will take place with businesses, trade unions and civil society before any of these proposals become law.
Nevertheless, the paper gives a helpful indication of the Government’s likely direction of travel and the types of change that it envisages making to employment law.
Day one rights
The Government plans to introduce “day one” rights for leave, flexible working, sick pay and unfair dismissal.
In relation to unfair dismissal, this would involve removing the current two year service requirement before an employee can bring a claim for unfair dismissal against their employer. This would potentially be a significant change to the current legal landscape, where it is often low risk for an employer to terminate employment within the first two years.
The paper does mention employers being allowed to operate probationary periods with “fair and transparent rules and processes”. Therefore, it may well be the case that, during the probationary period, an employer will still be able to assess the suitability of new employees coming into the business. However, it is unclear what steps an employer will need to take, in order to fairly dismiss a probationer.
Nevertheless, it appears safe to assume that it is going to become more difficult for employers to dismiss short serving employees who are not good fits for the business.
Zero hours contracts and one-sided flexibility
The Government intends to end so-called “one-sided flexibility”, whereby workers have no guarantee of work from one day to the next. These plans include:
- Ensuring that all jobs provide a “baseline of security and predictability”.
- Banning “exploitative” zero hours contracts.
- Ensuring that everyone has the right to have a contract of employment that reflects the number of hours they regularly work, based on a 12-week reference period.
Fire and rehire
“Fire and rehire” is an informal term given to the practice of dismissing employees and re-engaging them on less favourable terms and conditions. This is sometimes done as a last resort by businesses when there is a need to reduce costs.
The paper proposes to make fire and rehire unlawful, except in circumstances where a business would not be able to survive without making changes to employees’ terms and conditions of employment.
Other potential changes
Other changes proposed in the paper include:
- Increasing the time limit for employees to bring a claim before the Employment Tribunal from three months to six months. This will likely increase the number of claims (especially unfair dismissal claims) against employers as employees will have more time to bring such claims.
- Rolling back the restrictions on industrial action / trade union activity brought in by previous Conservative Governments.
- Merging employee and worker status into a single worker status that is entitled to all employment rights. Currently, the UK has a three-tier system of employment status: employees (who enjoy all employment rights, including sick pay and unfair dismissal protection), workers (including casual / zero hours workers – who enjoy some employment rights such as holiday pay and limits on working time) and the self-employed (who have no employment rights).
- Introducing a single enforcement body to enforce workers’ rights, including powers to inspect workplaces and take action against exploitation.
Summary
It is important that employers are aware of and start preparing for the changes that the Government is planning to make to UK employment law. The need to take legal advice before dismissing, or taking formal action against, an employee (including employees with short service) will be greater than it has been for many years. Employers should also ensure that they have well drafted contracts of employment and legally compliant policies and procedures in place that best protect them in light of the Government’s proposed changes.
Just Employment Law are employment law specialists, with expertise in advising on disciplinary and dismissal situations and on drafting contracts, policies and procedures. If you are interested in learning more about our services, contact us on 0141 331 5150 or at enquiries@justemploymentlaw.co.uk. You can also visit our website at https://www.justemploymentlaw.co.uk
