Get ready for the UK’s biggest shake up to employment rights in decades
The Labour government’s sweeping proposals - introduced on 10 October and currently progressing through the Westminster Parliament - will impact a vast range of areas including: zero hours contracts; unfair dismissal; ‘fire and rehire’; and flexible working. Proposals will also have major implications for statutory leave, sexual harassment, third party harassment, collective consultation and trade union rights.
Aberdein Considine is advising employers on the details of the changes and how to prepare for the new regime. Robert Holland, Partner and head of employment law at the firm, says: “Be in no doubt, this is the biggest shake up of employment rights in the last 30 years, probably since the Blair Government back in 1997, and maybe even before that as far back as the 1970s.
“This new Bill, and the employment provisions in the recent UK Budget, are all part of Labour’s plan to ‘Make Work Pay’, the name of the paper they published in October. The Government wants to rebalance the working relations between employers and employees.
“Some have labelled it ‘securonomics’ - to make the workplace and the worker more secure and, in turn, increase productivity. Whether that actually happens is up for debate. Redressing the balance between the worker and employee on one side, and the employer on the other, is at the heart of this Bill.”
Holland says he would like to ease concern among some employers about the timing of the changes. “I’ve had a number of clients contacting me to say we need to get the handbook sorted and the procedures in place by the end of the year,” he explains. “But we’re just at the first reading of the Bill. It takes a surprising amount of time to go through Parliament and it’s subject to a large amount of consultation.”
He adds that the first provisions, namely the ones around trade unions, are likely to come into force in late spring 2025, while the majority of the legislation will not be live until the following year. However, an exception is in the area of sexual harassment, with changes having already come into play on 26 October.
Looking in detail, firstly, at changes to zero hours contracts, Nicola Gray, a Partner in Aberdein Considine’s employment team, says these can be a useful tool for industries where there is a fluctuating availability of work and workers. They are often used in such sectors as hospitality and retail. However, she adds there is a concern that such contracts can be considered exploitative where too much of the balance rests with the employer.
On the proposed legislation, she explains: “The goal is to strengthen the workers’ side of that deal. The Government is looking to introduce a right to guaranteed hours, so flexibility is not a penalty against the employee.
“The idea of ‘qualifying workers’ has been introduced by the Bill - an individual who will work a minimum level of hours across a referenced period. That gives the worker the right to be offered guaranteed hours by the employer. The power remains with the employee if they wish to reject the offer and retain full flexibility.”
Turning to unfair dismissal, Gray says the “headline-grabbing” proposal is for this to become a day one right for workers, removing the current qualifying period of two years of service.
“This is going to come in and have a permanent effect,” explains Gray. “Once the employee has actually started work, ‘day one’ will be invoked. But there will still be fair grounds to terminate contracts for certain statutory reasons within an ‘initial period of employment’. The length of this initial period, or statutory probationary period as it might become known, is subject to consultation.”
On fire and rehire, or fire and replace, such practices are being tightened up and will become ‘automatically unfair’, unless the employer can show they had to terminate contracts for critical reasons, such as the business being in dire financial straits, adds Gray.
Also being included in day one rights for employees under the proposals are paternity, parental and bereavement leave.
Laurie Anderson, Senior Associate in Aberdein Considine’s employment team, explains: “There are aspects of bereavement leave that are already ‘day one’ rights, in terms of statutory parental bereavement leave. But under the Bill these are being extended to any individual who is bereaved. Part of the consultation will be to decide who would be regarded as a ‘bereaved individual’.”
“There are also fairly significant changes proposed to statutory sick pay (SSP),” says Anderson. “There is a removal of the three-day waiting period before it’s payable and the lower earnings limit of £123 to qualify for SSP will go.
“On pregnancy, maternity and family leave, there are some fairly wide-ranging proposed changes. The protected period for dismissal during pregnancy is to be extended, likely mirroring the current redundancy protection period.”
Under the new Bill, flexible working will be the default position, explains Anderson. “Its aim is to ensure that more requests are agreed. It’s setting a higher test for employers to be able to refuse flexible working requests.”
Employers are now required to take all reasonable steps to prevent sexual harassment of their employees with new rules introduced last month, explains Karen Harvie, Senior Associate in the employment team at Aberdein Considine.
She says: “There is now a duty to take proactive preventative steps. There is a 25 per cent uplift in compensation allowed to employees where there is sexual harassment and a failure to discharge the reasonable steps duty. It has also introduced the concept of employer liability for third party harassment.
“The regulations will specify what reasonable steps will be for employers to prevent harassment. These steps are likely to include carrying out risk assessments, publishing action plans and sexual harassment policies, reporting of sexual harassment and the handling of complaints.”
A significant part of the Bill centres around reforms to trade union rights and collective bargaining. Holland says: “Most companies will agree that it was a real statement of intent by the Labour government to reimpose trade unions rights, values and recognition within the workplace. This will impact all of us and require real knowledge of current rights and what is coming into play in the next year or so.
“With the increased awareness and power given to unions and their representatives, I see an increase in membership and, where organisations are not currently unionised, more applications to start a union. The new regulations represent a major shift in favour of unions.”
The current framework under the Trade Union 2016 Act was introduced by the Conservative government as part of a bid to curb unions ‘powers and strike action. It included such features as a 50 per cent threshold, a requirement for unions to give 14 days’ notice of a strike, strict supervision of picketing, a six-month ballot mandate expiration date and for unions to include detail on expenditure from political funds.
“These were pretty draconian crackdowns on unions,” says Holland. “Under the new Bill most of the Trade Union 2016 Act measures are to be abolished. You are going to see strike action initiated on lower turnouts and a number of new measures which will impact HR teams on a day-to-day basis. One of the biggest is the written statement of a worker’s right to join a trade union from day one. There will be more union workplace access, expansion of protection against blacklisting - particularly relevant to the oil and gas industry in Scotland - more time off for employee representatives and new rights to online balloting.”
Holland concludes: “As I’ve said, this Bill is the biggest shake-up to employment rights in many years, and a lot of consultation is still to come. There is time for you to look at policies and procedures to ensure you won’t be caught out by changes.”
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