A new government – what’s next on the agenda for employers?

As widely predicted, the Labour party has formed a new government following the General Election on 4 July 2024. With this in mind, what can employers expect to happen over the next few weeks and months?  

The Labour party’s ‘New Deal’ green paper, republished in May 2024, and their subsequent election manifesto, promised sweeping reforms to employment legislation. It is an ambitious set of proposals, some of which will be easier (and therefore quicker) to implement than others.  

The State Opening of Parliament will take place on 17 July 2024, and the King’s Speech will set out the programme of legislation that the Government intends to pursue in the forthcoming parliamentary session. We will then have a better idea of what employment legislation is proposed, and the workplace reforms the Government will be prioritising, over the next 12 months or so. 

Prior to the election, Labour committed in its manifesto to implement its New Deal proposals in full and to introduce legislation within 100 days of taking office. The TUC is already pressing for Labour to take “immediate action to deliver on workers’ rights”. In practice, however, the ‘100 days’ commitment will most likely mean the publication of a formal consultation on a new Employment Bill, rather than any legislation being passed in such a short timeframe. 

What will be the Government’s short, medium and long-term priorities? It’s difficult to predict with any certainty, given the wide-ranging proposals, but this is what we might expect to see: 

• Short term: the Government is already taking steps to engage with unions to resolve ongoing pay disputes in the public sector, including initial discussions taking place with junior doctors. It is likely to repeal the Strikes (Minimum Service Levels) Act 2023, which introduced powers to set minimum service levels in certain key public services during periods of industrial action. Repeal of the Trade Union Act 2016, which placed restrictions on the organisation of lawful industrial action, may also be actioned in the short term. Other changes to the rules on trade union recognition and industrial action, including electronic balloting, are likely to take longer to introduce. The Government will be able to change the Low Pay Commission’s remit without seeking parliamentary approval, to ensure the cost of living is factored into the annual uprating of the National Minimum Wage. It is also likely to revise the current age bands, meaning that all adults (18+) will receive the same NMW rate.  

• Medium term: this might be the likely timeframe for the ‘day one’ rights promised by the Government to be introduced, including the right to “default” flexible working and the right to claim unfair dismissal. Removal of the current two-year period for claiming unfair dismissal would be relatively easy to achieve by secondary legislation (a statutory instrument) but it is likely that a formal consultation will be issued. This will probably include further details of proposals to introduce some form of a statutory probationary period, during which it will presumably be more straightforward for employers to fairly dismiss a new employee. Strengthening the new statutory Code of Practice on ‘fire and rehire’ (due to take effect on 18 July) is also likely to be reasonably high on the Government’s agenda, along with banning “exploitative” zero-hours contracts and giving workers the right to a more stable contract based on a 12- week reference period. These proposals will require formal consultation before they are introduced. 

• Longer term: the thorny topic of employment status, and the Government’s proposals to move towards a simplified two-tier framework of ‘worker’ and ‘self-employed’ will be much harder to implement, given previous attempts to address this issue have failed to get off the ground. The Government has promised a ‘review’ of the current system of parental leave within their first year, but any significant changes to the existing system is likely to take much longer. A single enforcement body, which was a commitment in the 2019 Conservative manifesto and has already been the subject of a previous (2021) consultation, will take some time (and funding) to establish and be granted the necessary powers of enforcement. It is also likely to take a longer period of time to introduce the promised mandatory ethnicity and disability pay gap reporting, which will be more complex than the current gender pay reporting obligations.  

The Government’s plans to increase the time limit for bringing a tribunal claim from three to six months is one that is relatively easy to do from a legislative point of view, but hopefully steps will be taken to ensure that the employment tribunals are more adequately resourced before this happens. There is already a considerable backlog of claims with significant delays to cases being heard, and an increase to the time limit (coupled with a new day-one entitlements, including the right to claim unfair dismissal) is likely to exacerbate these existing delays. 

In addition, there are a number of reforms introduced by the former Government that have already been approved, some of which are due to take effect shortly:  

• The new Code of Practice on dismissal and re-engagement is due to take effect on 18 July, unless the Government takes steps to remove it. It would seem more likely that the Code will remain as drafted, until such time as the Government decides exactly how it should be strengthened.  

• The new Code of Practice on the allocation of tips and gratuities has also been passed, and only requires an order to bring it into effect (which is expected from 1 October 2024). It is unlikely the Government will block this from happening.  

• The new Paternity Leave (Bereavement) Act 2024, which received Royal Assent on 24 May 2024, also requires commencement regulations before it takes effect, but this will be uncontroversial. It allows fathers and partners to take statutory paternity leave in the event of the death of a child’s mother, even without the minimum 26 weeks’ service to qualify for the leave. 

• A new duty under the Equality Act 2010 for employers to take reasonable steps to prevent the sexual harassment of their employees, alongside an updated Code of Practice (not yet published), will take effect from 26 October 2024. Draft revised guidance on the new duty has just been issued by the EHRC for consultation. This duty may be further strengthened by the new Government in the future.  

• Two recent Acts of Parliament are also still waiting to be brought into effect by secondary legislation. The right for workers (including agency workers) to request more predictable terms and conditions, brought in by the Workers (Predictable Terms and Conditions) Act 2023, and the new right for parents of premature babies to take additional leave if their child requires neonatal care, under the Neonatal Care (Leave and Pay) Act 2023 are also both waiting for secondary legislation before they take effect. 

It remains to be seen whether the new Government presses ahead with these reforms as previously anticipated, or whether they decide to further strengthen certain provisions before they take effect. We await the King’s Speech for some clarity over the Government’s next steps.