The new government has big plans for employment law
Gillian McAteer, Director of Employment Law, Citation
THE new Labour government is set to bring about big changes to employment law as it implements the New Deal for Working People, as promised by its manifesto.
This is set to have a huge impact on life for both employees and employers and it’s those that prepare best that will come out on top.
Prime Minister Keir Starmer has committed to introducing an employment bill within the first 100 days of the new parliament, leaving little time for engineering businesses to get their processes and paperwork in order.
Step one is knowing what the new government has planned, so here are the 11 changes that are likely to have the most impact.
Prime Minister Keir Starmer has committed to introducing an employment bill within the first 100 days of the new parliament, leaving little time for engineering businesses to get their processes and paperwork in order.
The new government is set to remove the two-year service requirement before employees can claim unfair dismissal, citing people moving jobs as a drag on productivity.
The plans point out that this will not prevent fair dismissals and employers will still be able to use probationary periods with fair and transparent rules and processes.
It’s a big change and it will mean that’s more important than ever for employers to handle conduct and capability problems correctly from the very start of employment.
There are plans to create a new single enforcement body to enforce employment rights, likely to be called the Fair Work Agency, to replace the current system widely considered to be ineffective. The new government has promised that the new agency will have real teeth to deliver swifter access to justice for workers in areas such as holiday and sick pay. It will likely include trade union and Trades Union Congress (TUC) representation and have strong powers to inspect workplaces and proceedings to enforce employment rights. For engineering businesses in particular, it should be a sign to double-check that both their physical sites and organisational procedures are up to scratch.
One of the most notorious areas of employment law, Labour also addressed one-sided flexibility in its manifesto and have committed to ensuring that all jobs to provide a baseline level of security and predictability. This includes banning zero-hours contracts and mandating that contracts reflect the number of hours people regularly work, based on a 12-week reference period.
Of course, the many construction businesses that rely on seasonal and flexible work will have questions, but the government has assured employers that they will still be able to offer fixed-term contracts including for seasonal work. However, measures to ensure workers get reasonable notice of changes to shifts or working hours and appropriate compensation for cancelled or curtailed shifts will be a significant challenge for businesses that rely on flexibility. These employers should start looking now at how they can update operations to accommodate the changes.
The government is also addressing the thorny issue of employment status, the ambiguity of which the new government believes has led to the rise of bogus self-employment, leaving working people with fewer protections than they deserve. To combat this, the government is proposing merging the employee and worker categories into a single category of worker to differentiate between workers and the genuinely self-employed. It’s set to be a massive shift for employers, which could impact the ability of businesses to embrace flexible work, but businesses should be prepared and work to understand what it would mean for them.
This year has already seen significant changes to flexible working rules, but the new government is planning to introduce legislation to make flexible working the default from day one for all workers ‘except where it is not reasonably necessary. Of course, many civil engineering roles will fall into this category, but the rules will apply all the same. It’s not yet clear how this will be assessed, or how these changes work in tandem with the existing legislation.
Everyone in the civil engineering sector should be reviewing arrangements to see whether it would be possible to accommodate more flexible working, not just to prepare for law changes but because it’s the number one priority for candidates and it’ll give them a serious competitive edge in the battle for talent.
It does recognise that there will be times when employees must be contacted, but this is an opportunity for businesses to review their working practices and areas where work/life balance, in fact, needs a bit more balance.
Following the blurring of the lines between home and work for many employees post-COVID, the government is planning to introduce a right to switch off, which ensures workers aren’t penalised for disconnecting. It does recognise that there will be times when employees must be contacted, but this is an opportunity for businesses to review their working practices and areas where work/life balance, in fact, needs a bit more balance.
There are also plans to increase the time limit for bringing an employment tribunal claim from three to six months. The plans are intended to help those that struggle to make a claim initially, such as those with mental health issues or those wishing to make claims for pregnancy discrimination, by providing more time for them to receive advice and support.
There are number of changes affecting pay – future national minimum wage levels will be set taking into account the cost of living, alongside median wages and economic conditions, and the current age bands will be removed. Statutory Sick Pay (SSP) will be made available to all employees with the removal of the lower earnings limit and the three-day waiting period will also be removed, meaning that SSP will be payable from the first day of sickness absence. For businesses, these changes need to be made clear to employees and managers in good time.
The new government is set to build on the Worker Protection Act that comes into force on 26 October 2023, requiring employers to take all reasonable steps to prevent sexual harassment and introduce an obligation to prevent harassment by third parties such as customers and suppliers.
It also plans on increasing maternity protections by introducing a measure making it unlawful to dismiss a woman within six months of returning from maternity leave. There will be more support for people going through the menopause, as well as a requirement to address pay gaps related to gender, ethnicity and disability.
The Statutory Code on Dismissal and Re-engagement (fire and rehire), which came into force on 18 July 2024, will be strengthened by the new government, who has vowed to effectively ban the practice except in cases where there is no alternative for the business.
Unions are central to the new government’s plans for fairer work and a strong economy and it has committed to several reforms of the framework on collective bargaining. There are plans to update the legislation to remove what it sees as unnecessary restrictions on trade union activity and simplify the process of balloting to members. There are also a number of other new rules in the plan, covering rights to accessing unions, their visibility within workplaces and protections for trade union representatives, all of which businesses should be aware of and ready to comply with.
The new government has promised its agenda will provide the biggest upgrade in workers’ rights for a generation. A thorough understanding of the requirements of the new rules and how to get your business ready will be essential for employers to embrace the potential benefits of these changes and avoid any pitfalls.
Gillian McAteer, Director of Employment Law
Citation