King’s Speech: New laws will strengthen employee protections

In the King’s Speech outlining its legislative priorities for the year ahead, the new UK government said that it is committed to “making work pay” with new legalisation set to introduce a “new deal” for working people while helping to tackle exploitative practices and enhance employment rights. Two new laws will be introduced with the Employment Rights Bill to be introduced in the first 100 days of the new parliament.

The Bill will provide protection for employees from day one of employment. This includes making parental leave, sick pay and protection from unfair dismissal available from day one on the job for all workers. 

Employment law expert Anne Sammon of Pinsent Masons said: “Of particular significance is the proposal to make parental leave, sick pay, flexible working and unfair dismissal rights available for all workers from ‘day one’. Employers should start auditing how their policies and procedures currently operate so that they are in a state of readiness to make change when we have more detail. Probationary periods will become a key area of focus, so understanding now how well these work within a business, how managers and systems actually manage them day-to-day, will be extremely helpful when planning for change.  Employers should also be mindful that we don’t yet know whether there will be any regulation of the length of valid probationary periods and therefore, at this stage, there may be limited merit in seeking to lengthen these.”

Currently women returning from maternity leave enjoy limited protection in the form of priority for suitable alternative roles in a redundancy situation. The proposed new legislation goes much further, meaning that employers will not be able to dismiss those returning from maternity leave for at least six months after their return save for in certain specified circumstances.  

“The precise terms of those exceptions will be crucial for the effectiveness of the right, and the government will need to ensure that these are appropriate and deal with any sector-specific issues.  For example, within the financial services sector, employers are required to remove certain categories of employees from roles if they are not fit and proper to undertake these. As such it will be essential that the government considers the implications of any new rights and that they don’t cut across employers regulatory or other obligations,” said Sammon.

The Bill also aims to strengthen statutory sick pay by removing the lower earnings limit, as well as making flexible working the default from day one for all workers, with employers required to accommodate this as far as reasonable to reflect the modern workplace. The Bill will ban zero-hour contracts, working to end ‘fire and rehire’ and ‘fire and replace’ practices.

Chris Evans, employment law expert at Pinsent Masons, said: “In circumstances where many employers have re-set expectations around office attendance post pandemic and adjusted their property portfolio, making flexible working the default from day one will create significant uncertainty. This is not only in terms of when it would be reasonable to refuse such requests, but also on a practical level not knowing how many employees will seek to utilise this right and what impact this will have on requirements for office space.”  

The speech also referenced the draft Equality (Race and Disability) Bill. This draft Bill aims to deliver on the government’s intention to introduce mandatory disability pay gap reporting for large employers with more than 250 employees.

Amy Hextell, employment law expert at Pinsent Masons, said: “Many will consider this a big step forward after years of campaigning. However, the practical issues for employers in gathering and reporting information relating to disability remain, with employees still reluctant to disclose information which will allow for meaningful pay gay reporting. Employers will need to do some work in advance of any new law coming into force to improve engagement with disabled employees, which is likely to require more than simply updating policies and delivering diversity and inclusion training and instead focus on ensuring a proper cultural shift to a place where those with disabilities are genuinely included and always considered.”

New ethnicity pay gap reporting would also be mandatory under the draft Bill. Both the disability and ethnicity pay gap reporting requirements are designed to expose any pay disparities in businesses across the Great Britain, aiming to encourage employers to take action if any issues are identified. This is coupled with additional equal pay protections for those who are found to be underpaid, with the Bill to provide greater clarity for employees to make a claim.

Shuabe Shabudin, employment law specialist at Pinsent Masons, said: “After the disappointment of the previous government making the decision not to make ethnicity pay gap reporting mandatory, this is very much a good news story. There still remains a real competitive advantage from undertaking and building on the outcomes of an ethnicity pay gap report. This is a big step in the right direction and shows the government’s support for the kind of analysis that is needed to further racial equality in our workplaces.”

The Employment Rights Bill will also bring changes to the industrial relations landscape, such as updating trade union legislation, establishing a fair pay agreement in the adult social care sector, and simplifying the process of statutory recognition.