New Government, New Rules: UK Employment Law Changes in 2024
The General Election was the catalyst for significant change in the UK, a change many were excited about. These changes included adjustments to Employment Law in the UK - some of which were expected. They vary widely and carry substantial implications for small to medium-sized businesses in the UK.
In this blog, we will explore the changes being made to UK Employment Law under Labour, focusing on what they may mean for your company and employees, especially if you work at a small to medium-sized business.
Why Does The New Government Have Such an Effect on Employment Law?
Labour’s New Deal for Working People signals changes in Employment Law. The King’s Speech on July 17th introduced the Employment Rights Bill and a draft Equality Bill. These bills are set to affect businesses across England, Wales, and Scotland.
What is the Employment Rights Bill?
The Employment Rights Bill in the UK includes several changes to the employment laws, this will involve proposed changes to zero-hour contracts, unfair dismissal, flexible working, redundancy protections and more. They are also planning to change the national minimum wage bands to ensure all adults will be able to benefit from the national living wage,
Zero-Hour Contracts Ban
Labour plans to scrap zero-hour contracts, often used in hospitality and similar sectors, ensuring employees have contracts that reflect regular hours and provide adequate notice of shift changes. While this improves job and wage security for employees, businesses will need to revise contracts, creating additional work for those that rely on zero-hour arrangements.
Right to Reasonable Notice Work Schedules and Compensation for Cancelled Shifts
Building on the zero-hour contract ban, the Right to Reasonable Notice for Work Schedules and Compensation for Cancelled Shifts will ensure employees receive notice and compensation for last-minute cancellations. This will likely pressure managers to improve rota planning, especially in industries with fluctuating demand.
The Right to Disconnect
This one has been dominating news headlines recently. Despite not being mentioned in the King’s Speech, Labour has proposed the ‘Right to Disconnect’, meaning employees have the right to “switch off” outside of working hours.
This initiative is inspired by policies in Ireland and could lead to new workplace policies as well as alteration of employee handbooks and potentially contractual changes.
Flexible Working as Default
The Employment Rights Bill is set to make flexible working the default from day one, requiring more employers to accommodate flexible arrangements unless there’s a valid reason not to. Though details are unclear, this mainly targets working parents needing part-time flexibility.
This could be a major shift for employers. While COVID-19 popularised flexible work, many offices now require employees to return five days a week. This policy would change that. This change does present a valuable opportunity to attract and retain a more diverse workforce.
Day-one Rights
Workers, under the Day-One Right, would gain rights to unfair dismissal protection, sick pay and parental leave from day one of employment at a company. Probationary periods will still apply but this Right could affect onboarding processes!
New Policies to be Introduced Under Labour
As to be expected, there are several new Policies to be introduced under Kier Starmer as Prime Minister - here’s what you can expect and how it may affect you working in HR.
National Living Wage
Labour has indicated linking the National Living Wage (NLW) to the current Cost of Living to ensure wage rates reflect the true cost of living expenses.
They also aim to remove the 18-20 age band, which currently allows employers to pay lower hourly rates for employees under 21. This change has the potential to impact industries that frequently employ younger workers like retail and hospitality.
Banning Unpaid Internships
Pledges have been made to ban unpaid internships unless they are part of an already ‘established training or education programme.’ This would mean all workers are compensated properly for their contribution.
The Equality Bill (Race and Disability)
Labour proposed mandatory ethnicity and disability pay gap reporting for employers over 250 employees, aiming to ensure equal pay for ethnic minorities and disabled people. This does align with Gender Pay Gap reporting but implementation of this bill may be difficult due to unclear assessment metrics.
Enhanced Sick Pay
The removal of the lower earnings limit for Statutory Sick Pay means all workers, regardless of earnings will be entitled to this pay. Employees will be entitled to SSP from the first day of illness rather than the current three-day waiting period.
It could lead to increased costs for employers, especially those with many part-time or employees who earn less. This policy has been designed to help those with lower incomes.
Paid Carer’s Leave
In April, one week of unpaid carers leave was introduced and Labour seems to be thinking about making this entitlement paid. This change isn’t guaranteed but has been referenced by Cabinet Members. This would provide support to employees who care for the ill, elderly or disabled relatives.
Bereavement Leave
Many employers do already offer compassionate leave but Labour intends to make this a statutory requirement for all employers. This would standardise the leave policy across all industries, ensuring employees have access to time off during this time.
What Do These Changes Mean For Your Company
The changes proposed under the new Labour government are set to bring significant shifts in employment law, particularly for small to medium-sized businesses.
Companies will need to prepare for stricter regulations around:
employee rights,
contract structures,
and workplace policies.
While these adjustments may introduce new operational challenges, like revising contracts, they also present positive opportunities.
These changes will improve:
employee satisfaction,
enhance workplace equity
attract and retain new talent.
Staying informed and proactive will help your company stay agile!
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Last updated: 17/09/24
