“My Government is committed to making work pay and will legislate to introduce a new deal for working people to ban exploitative practices and enhance employment rights”
The new government outlined it’s plans for the next parliament in last week’s King’s Speech, and amongst the 40 announced bills, two focused on Employment Law. So what do they propose, and what does this mean?
The Employment Rights Bill
To be introduced within the first one hundred days. The government says it represents the biggest upgrade to workers’ rights in a generation.
The Bill will deliver on policies set out in the ‘Plan to Make Work Pay’, which includes a commitment to the following;
Banning zero-hour contracts.
Ensuring workers have a right to a contract that reflects the hours they regularly work.
Ending ‘Fire and Rehire/’Fire and Replace’.
Making parental leave, sick pay and protection from unfair dismissal available from Day One on the job for all workers.
Strengthening Statutory Sick Pay by removing the lower earnings limit to make it available to all workers.
Make flexible working the default from Day One, with employers required to accommodate this as far as is reasonable, to reflect the modern workplace.
Establishing a new Single Enforcement Body (also known as a Fair Work agency) to strengthen enforcement of workplace rights.
Establishing a Fair Pay Agreement in the adult social care sector (and following review, assess how this could benefit other sectors).
Updating Trade Union legislation so it is fit for a modern economy.
Continuing to ensure employers can operate probationary periods to assess new hires.
Background to the Bill
The government says that these measures will provide additional security and predictability for workers, as there has been an increase in the number of people in less secure forms of work. For example, more than one million UK workers are on zero-hour contracts at the moment as their main job[1].
They also say that extending protections to workers from day one will encourage more workers to switch jobs, which is associated with higher wages and productivity growth.[2] Growth is a major aim - the government also say that high employment and low unemployment have not coincided with increasing productivity, or wages. UK productivity growth since the global financial crisis has been slow, and while some say the pandemic has hindered this, ‘the pre-pandemic trend of sluggish productivity growth has continued’[3]. In 2022, ranked on GDP per hour, UK productivity was around 16% below the US and Germany [4].
They also say that the number of workers inactive due to long-term sickness is at a historic high (around 2.8 million)[5] and that Statutory Sick Pay is complex, outdated and fails to adequately support those who need it. Currently over 1 million people earn below the lower earnings limit[6] (£123 per week) and people do not currently receive any payment for the first three days of a sickness absence, disproportionately affecting the lowest paid workers working part time, or in low paid multiple jobs.
What else did we learn from the King’s Speech?
The notes to the King’s Speech repeat the government’s commitments on the National Living Wage. Those commitments are to:
Link the National Living Wage to the cost of living
Remove the ‘discriminatory age-bands’ (eg, 18-20 year olds) so that every adult worker benefits
Alongside the Employment Rights Bill, Labour also plans a Draft Equality (Race and Disability) Bill
What’s the timeframe on the proposals?
It’s hard to say. The government have promised to ‘introduce’ this Bill within the first 100 days, which could mean that either a draft, or the real thing will be laid out before parliament by the 12th October 2024. From here, it would need to go through both houses of parliament and could also be up for amendments which could take months to get through.
What is clear though is the new government’s commitment to ‘unlock growth and improve living standards for working people’[7] so we will be watching closely to see how this comes into play, and how it affects our market.
[1] https://www.lancaster.ac.uk/lums/research/news/new-analysis-reveals-uk-continues-to-fall-behind-rest-of-world-as-zero-hour-contracts-reach-record-numbers-and-its-young-people-bearing-the-brunt
[2]https://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/compendium/economicreview/april2019/analysisofjobchangersandstayers#job-changers-and-stayers
[5] https://www.bbc.co.uk/news/business-68639144#:~:text=The%20number%20of%20people%20leaving,2023%2C%20said%20the%20Resolution%20Foundation.
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