Everything employers need to know about upcoming employment law changes following the King’s Speech 2024

During the State Opening of Parliament on 17th July 2024, King Charles III formally opened a new session of Parliament in the first ceremonial King’s Speech.

Alongside Labour’s newly announced pledges around nationalising our railways, tackling the housing crisis and putting measures in place to clamp down on illegal immigration, the King also unveiled a number of key considerations in the employment sphere too.

The Employment Rights Bill

The Employment Rights Bill (“the Bill”), published October 2024, was the main employment law measure set out in the King’s Speech, which was introduced within the first 100 days of Starmer’s Government taking office, is predicted to take another two years for it to come into force.

The King stated that the Bill will “legislate to introduce a new deal for working people to ban exploitive practices and enhance employment rights”.

We have of course already seen a number of changes this year, including updates to flexible working, which is now a day one right and enhanced redundancy protection for pregnant women and those returning from maternity leave.

Early indications show that the Bill covers the following:

• To do away with “exploitive” zero hours contracts. This means implementing contracts that are reflective of the typical hours a worker regularly works, along with reasonable notice of any changes to shift patterns. This includes compensation for any cancelled or shorter shifts.
• An end to “fire and rehire” practices.
• Parental leave, sick pay and protection from unfair dismissal to become a day one right.
• Enhancements to statutory sick pay – removing the lower earnings limit and three day waiting period.
• Introduction of a Fair Work Agency to strengthen workplace rights and act as a new single enforcement body.
• An update to trade union legislation to remove unnecessary restrictions and ensure industrial relations are handled with good faith.
• Ensure workers and union members have a right to access a union within the workplace by simplifying the process of statutory recognition and a regulated route.

Amendments to Minimum Wage

Labour stated that they will make sure the minimum wage is uplifted to what they are calling a “genuine living wage” by way of changes to the Low Pay Commission. They have also said they will look to remove the “discriminatory age bands” currently in place, removing the lower rate for 18-20 year olds.

The recent Autumn Statement confirmed that National Minimum Wage rates will increase from April 2024. On 30th October, Rachel Reeves announced that the minimum wage for workers aged 21 and over will rise to £12.21 per hour. This adjustment is expected to come into effect in April 2024, marking a significant change for employers to prepare for in the coming months.

The New Equality (Race and Disability) Bill  

The King also outlined plans for The Equality (Race and Disability) Bill, which centres around race equality designed to “enshrine the full right to equal pay in law” for ethnic minorities and disabled people.

This bill is tipped to introduce increased transparency around pay for companies with more than 250 employees, bringing in mandatory ethnicity and disability pay reporting to help close pay gaps.

What do these changes mean for employers?

The GMB Union has welcomed the details outlined in the King’s Speech, calling them the “breath of fresh air the country has been looking for”, with members of Unite, the UK’s largest trade union echoing the sentiment, stating the speech was “packed full of measures which…is key to balancing the relationship between employers and workers”.

Conversely, Neil Carberry, chief executive of the Recruitment and Employment Confederation was quoted as saying that businesses are worried that the Government will rush reforms to the labour market and do “more harm to workers than good”.

Our employment law Partner, Danielle Ayres, shares her views on the expected new changes here:

“As King Charles reminded us in his speech, rebuilding the UK will not happen overnight. The changes outlined above will not be a quick fix.

“The Employment Rights Bill is proposed to be the biggest upgrade to worker’s rights in a generation and the changes will certainly be welcomed by most employees, and I expect that together with them, many businesses will not be opposed to the plans set out. Good employers will already have the necessary documents, policies and tools required to ensure that the obligations are met. However, I appreciate that there will be those businesses that still operate outdated practices and treat their staff poorly.

“Thought will be needed as to how the changes are put into practice and the rules and regulations which will govern them.  The concerns that it will take some time to get these things right are well-founded and businesses will need time to put appropriate policies and procedures in place, in order to ensure compliance. It will not be enough for the Government to make these changes and leave employers to drown under the red tape.

“All that said, the next few years are likely to be transformative in the employment arena and employers should expect to have to consider the practices, contracts and policies that they have in place, and understand that training may be required once the Government outline how their plans will be put into action.”

For support or more information about the employment law changes following the King’s speech, our expert employment team can help. Get in touch with Employment Partner Danielle Ayres via Danielle.ayres@primaslaw.co.uk.