The King’s Speech—The Key Employment Implications

Quick Hits

• The King’s Speech of 17 July 2024 detailed the UK government’s upcoming priorities and proposals.
• This includes the Employment Rights Bill and draft Equality (Race and Disability) Bill.
• Among the proposed policies were several significant employment-related bills, and we have set out below the key proposals.

If enacted, together these proposals would constitute the most significant reform in UK employment legislation in decades.

We set out the key provisions below:

1. Unfair Dismissal: The right to not be unfairly dismissed would be a day one right and the statutory time limit to bring a claim would be increased from three months to six months.
2. Leave and Sick Pay: Many other basic employment rights would be a day one right for all workers, including parental leave, sick pay, and the right to bereavement leave for all workers.
3. Flexible Work: Flexible working will be the default in workplaces. Employers will be required to accommodate this as far as is reasonable.
4. Making a Return to Work After Childbirth: It will be unlawful to dismiss a woman who has had a baby within the first six months after her return to work.
5. Zero-Hour Contracts (Predictable Scheduling): A ban on zero-hour contracts is proposed. This will involve making it a requirement that workers are provided with a contract that reflects the number of hours they regularly work, ensuring all workers get reasonable notice of shift changes and proportionate compensation for any shifts cancelled or curtailed.
6. “Fire and Rehire” and “Fire and Replace”: Bringing an end to “Fire and Rehire” and “Fire and Replace” practices.
7. Statutory Sick Pay: Removing the lower earnings limit on Statutory Sick Pay.
8. Fair Work Agency: The proposals would establish a new Single Enforcement Body, known as a Fair Work Agency, to enforce workplace rights.
9. Trade Unions: The proposals would simplify the process of statutory recognition for trade unions.

What Next?

The Employment Rights Bill is expected to be introduced within the first 100 days of the Labour government taking office, i.e., by 12 October 2024. At this stage, the proposals lack detail. However, if confirmed, amongst the most significant implications for employers may be the effect of unfair dismissal becoming a right from day one of employment. It is understood that this will be subject to a “‘fair and transparent’” probationary period, although it is not yet clear if the legislation will stipulate a maximum length of any probationary period. However, employers will likely still need to prepare for an increase in threatened claims and/or employment tribunal litigation.

The process of introducing new legislation in the United Kingdom may be lengthy, and so it is not expected that the changes will take full effect until 2025 at the earliest. That said, employers should be aware of the significant employment law changes ahead and may want to start thinking about what they can do to prepare, including reviewing how they currently conduct probationary periods and performance manage employees with less than two years’ service.

The London office of Ogletree Deakins will continue to monitor developments and will provide updates on the Cross-Border, Leaves of Absence, Pay Equity, and Wage and Hour blogs as additional details on the proposals become available.

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