Labour Government: Upcoming Employment Law Changes
Overview: In 2024 we saw a new Labour Government take the reins in parliament and it was the new Government’s stated intention that it would introduce an Employment Rights Bill containing a number of proposed employment law changes within 100 days of taking office. The proposed employment law changes had previously been outlined in the Labour Party’s manifesto and new deal.
The Employment Rights Bill was published on the 10th October 2024 (see further below for the proposed employment law changes).
Timeframe
The Government has confirmed that there will be extensive consultation to start this year (2025) over the proposed employment law changes set out in the Employment Rights Bill however the Government has also confirmed that majority of the proposed employment law changes will not be implemented until 2026 at the earliest.
What does this mean for businesses?
With the proposed changes not being implemented until 2026 this means that employers have a window of time to plan and prepare during 2025.
Businesses should now:
review their HR documentation including contracts, policies and handbooks ensuring that both legal compliance and business requirements are met.
review and/or create HR processes and practices that are clear and understandable by all.
Assess the workforce. With day one rights on the horizon, it is crucial that the right people with the right skills are in the business. Review any employees who have under 2 years of service and establish if they are a good fit.
How can Regent HR help?
Our team of HR experts can provide a comprehensive review of your existing policies, contracts, and employee handbooks to ensure they are aligned with upcoming legal requirements. We can assist in refining HR processes, making them clear and effective for both management and employees.
Additionally, we offer tailored workforce planning support, helping businesses assess their teams and implement strategies to attract, retain, and develop the right talent. With significant changes on the horizon, having a well-prepared HR function will be key to maintaining compliance and business efficiency.
If you’d like to discuss how these changes may affect your organisation and what steps to take next, contact Regent HR today.
Employment Rights Bill
The proposed employment law changes contained in the Employment Rights Bill are as follows:-
Zero Hours Contracts: A ban on what the Government calls “exploitative” and “one sided” zero hours contracts, ensuring that workers have the right to a guaranteed-hours contract that reflects the number of hours regularly work based upon a twelve-week reference period, and reasonable notice re shift changes. Under the Employment Rights Bill, workers will also be entitled to be compensated should shifts be either cancelled or finish early. Nevertheless, employees will be able to have a zero-hours contract should they want one
Fire & Rehire: A ban on ‘fire and rehire’ except where there is no other viable option to ensure the survival of the business and where a proper procedure has been followed. The statutory code introduced by the previous Government will also be replaced
Unfair Dismissal: Currently, employees have to have 2 years of continuous service before acquiring the right to bring a claim for unfair / constructive dismissal. Workers will now have this right from day 1 of their employment. Nevertheless, employers will still be able to incorporate probationary periods into their workers contracts of employment (referred to as an ‘initial period of employment’), of up to what the Government proposes will be 9 months (to be consulted upon prior to a final decision being made). This proposed 9 months is longer than the 6 months that had been recently reported. This means that whilst the Government will still be making the right to bring a claim for unfair dismissal a day 1 right, the new legislation will include provisions that will apply to dismissals during probationary periods, including the fact that employers will only have to follow an abridged process (referred to by the Government as a ‘light touch’ process, and which could possibly be confined to just holding a meeting – to be consulted upon) compared to the full set of procedures that will otherwise apply. Moreover, lower compensation rates may apply to unfair dismissals that occur during a probation period (subject to consultation). Furthermore, dismissing women who are pregnant, on maternity leave, or who have returned to work within the last 6 months will be prohibited, except in certain circumstances
Statutory Sick Pay (SSP): Entitlement to SSP will also become a day 1 right (as opposed to having to wait 3 consecutive days at present), and the right to SSP will be extended to all workers by removing the lower earnings eligibility threshold (currently £123.00 per week). Nevertheless, the rate of SSP that those earning below the lower earnings eligibility threshold will receive will be subject to consultation by the Government
Day One Rights: As well as making the right to claim for unfair / constructive dismissal and to SSP day 1 rights, unpaid parental leave, paternity leave, and a new statutory right to paid bereavement leave (i.e. the current right to parental bereavement leave will be a extended to a general entitlement to bereavement leave) will also become a day 1 rights.
Flexible Working: The day 1 right of employees to request flexible working will be enhanced, in that the grounds for refusal (which remain the same as at present) must be reasonable. Hence, the main change is the reasonableness test
Single Enforcement Body: A new body called the ‘Fair Work Agency’ will consolidate the enforcement roles currently handled by the HMRC’s National Minimum Wage enforcement team, the Gangmasters and Labour Abuse Authority, and the Employment Agency Standards Inspectorate, with the remit of enforcing employment rights and compliance. It will also be responsible for enforcing holiday pay.
Trade Unions: The Employment Rights Bill contains several provisions re trades unions. They include: (i) statutory recognition to be simplified (ii) a new entitlement for union representatives to engage with, advocate for, recruit, and manage member activities within the workplace (iii) a requirement for employers to supply their employees with written particulars setting out their trade union rights, alongside their contract of employment / employment particulars (iv) Strikes (Minimum Service Levels) Act 2023 to be rescinded (v) enhanced protections for members
Gender Pay Gap Reporting / Menopause: Those currently required to report their gender pay gap data will also be required to compile action plans to address their pay gap and on how they will support those going through the menopause
Enhanced Harassment Protection: A requirement upon employers to take ‘all reasonable steps’ to prevent sexual harassment, adding sexual harassment to the list of whistleblowing protected disclosures, and protections against third party harassment
Other Measures Within The Employment Rights Bill: To create a framework for setting pay and conditions in the adult social care sector, and to reinstate the School Support Staff Negotiating Body (SSSNB) and the two-tier code for public sector contracts