Employment law reforms (and rumours)

Since the King’s Speech on 17 July 2024, and throughout Parliament’s summer recess (which ended on 2 September), we have been waiting for further details of the Government’s proposed employment law reforms. A new Employment Rights Bill, promised in the King’s Speech, has not yet been published although the Government has committed to introducing it in Parliament within the first 100 days of taking power.  

In anticipation of a draft Employment Rights Bill appearing imminently, what do we know so far? There have been several confirmed decisions as well as rumours of what we might expect to be included.  

Here’s a round-up of what we know so far. 

Trade unions and industrial action 

The Government has already confirmed its intention to repeal the Strikes (Minimum Service Levels) Act 2023, which introduced a new requirement for minimum service levels to be met in key public services during periods of industrial action. The Act was highly criticised by trade unions, and the Government committed to repealing it in its election manifesto. 

The Act will be repealed under the forthcoming Employment Rights Bill, and any existing minimum service level regulations introduced under the 2023 Act will lapse once the Employment Bill is granted Royal Assent. In the interim period, the Government is “strongly” encouraging employers to seek alternative mechanisms for dispute resolution, including voluntary agreements, rather than imposing minimum service levels. 

According to the Government’s latest policy paper: “The upcoming Employment Rights Bill will remove barriers to effective collective action and strengthen the rights of working people by empowering workers to organise collectively through trade unions”. The Bill is likely to include the repeal of the Trade Union Act 2016, which placed restrictions on the organisation of lawful industrial action and may also simplify the statutory recognition procedure. 

Unfair dismissal – probationary periods 

One of the Government’s key policies is the introduction of ‘day one’ employment rights, entitling ‘workers’ to the right to take parental leave, receive statutory sick pay and protection from unfair dismissal from the first day of employment. Note that the King’s Speech background briefing notes expressly refer to ‘workers’, although it is not clear whether the intention is to extend current rights to include ‘workers’ as well as employees (or whether the reference is to ‘workers’ in the non-technical sense). 

We don’t yet have any details of the Government’s plans to extend unfair dismissal rights. The background briefing notes state: “we will continue to ensure employers can operate probationary periods to assess new hires”. This suggests that employers may be able to dismiss new hires during a probationary period without following a thorough and lengthy termination procedure, but this has not yet been confirmed and we have no details on what length of probationary period will be permitted. 

The Government could choose to remove the current qualifying period for unfair dismissal very quickly by secondary legislation (it does not require an Act of Parliament), but any further changes – including provision for termination during probationary periods – will need to be consulted over and are likely to be introduced in the Employment Rights Bill. 

Right to switch off 

The ‘right to disconnect’ was another pledge in the Labour Party’s Plan to Make Work Pay, and according to recent reports in the press, the Government is considering introducing a new Code of Practice to govern this new right. If these reports are correct, it is unlikely that there will be any free-standing right to bring a claim against an employer for acting in breach of the Code, but it might result in an uplift in the amount of any compensation awarded to an employee who succeeds in a separate claim (such as a claim for unfair dismissal). 

A new Code of Practice would set out the minimum standards expected of employers, and it is likely to encourage employers to create their own policies that are appropriate to the needs of their own workplace, after consultation with employees. This will allow flexibility for employers, rather than introducing fixed rules regarding contact out of hours. It is likely that different rules could be applied depending on employees’ roles, responsibilities and seniority. 

Compressed hours 

Recent news reports have suggested that under Government proposals, workers will be given the right to work compressed hours and a four-day week. According to The Telegraph (subscription required), “Workers are to be given new rights to demand a four-day week in a law planned for this autumn”. 

These reports refer to proposals for strengthening the existing statutory right to request flexible working arrangements. In the Labour Party’s Plan to Make Work Pay, it proposed making flexible working the default from day one for all workers, unless “not reasonably feasible”. Note that workers have had the right to request flexible working from day one of employment since 6 April 2024, as a result of reforms brought in by the previous Government.  

It is possible that employers will have to meet an enhanced threshold for refusing a flexible working request, details of which will be set out in the draft Bill. It will not give workers any absolute right to work compressed hours (or any other flexible working arrangement), it will most likely remain a right to request. 

Right to a stable contract 

The Government has confirmed that it will not be implementing the Workers (Predictable Terms and Conditions) Act 2023, which introduced a new ‘right to request’ predictable working hours but had not been brought into force prior to the General Election. It had been expected to come into force this month. 

Instead of a right to request, the Government apparently intends to introduce a substantive right to a contract that reflects the number of hours regularly worked, based on a 12-week reference period. This is intended to tackle the problem of “exploitative” zero hours contracts. The Government has also promised to introduce a right for workers to receive “reasonable notice” of any change to working hours. This new right is likely to be included in the new Employment Rights Bill, so details of how it will work in practice are not yet available. 

What is the timescale? 

The new Employment Rights Bill will need to be published by early October if the Government is to meet its promise of introducing legislation to Parliament within the first 100 days of taking power. It will then move through a number of stages in both Houses, including amendments to the draft Bill, before it is finally approved and is granted Royal Assent. This is likely to take many months to complete, and secondary legislation (Regulations) setting out the detailed provisions will also be required to bring some of the measures into force. 

We will update you with further details of the Government’s proposals once the Bill has been published. It looks set to be a very busy period for HR professionals as well as employment lawyers, so for an essential update of recent changes and what to expect in the future, sign up for one of our Annual Employment and Immigration Law Updates in October. See our events page for more details of the dates and locations available and to book your place.