With Labour being elected, the UK is set to see a significant amount of changes to employment law with the majority being ‘introduced’ within the first 100 days in power. This doesn’t however mean that they will become law by this date, and there are calls for the party to extend this deadline to fully consider the complexities of the changes. However, there are already swift decisions being made, with the new Fire and Rehire Code of Practice already effective from 18th July and it is expected the majority of the Employment Rights Bill will come into force on 26th October 2024. 

The below is an overview of the expected changes from the information we have at present. This will need to be fully considered on how these may change the way you manage employees. 

Labour has announced it is “committed to creating jobs that provide security, treat workers fairly and pay a decent wage.” Consequently, this is an opportune time to revisit some of your current processes and documentation to ensure it is up to date and reflective of your current business operations.

1. A single status of “worker”
Currently we operate with three tiers of employment status: employees, self-employed and “workers” the latter covering agency and temporary contracts.
Labour’s plans are to define a single status of worker and self-employed to ensure everyone understands their rights and remove some of the ambiguity about who is entitled to what. We foresee a number of employee rights such as unfair dismissal extend to those currently classed as workers.
Labour will also look to review self-employment rights to ensure that businesses deliberately avoiding legal responsibilities such as holidays, tax and NI by taking someone on as self-employed when realistically they should be an employee is avoided. Additionally, self-employed people will have a new right to a written contract (although this should already be best practice)

2. Banning zero-hour contracts (also known as casual / irregular hours)

Currently zero-hour contracts are used heavily in a number of industries to give employers flexibility by not offering a set number of hours to employees each week. The “Workers (Predictable Terms and Conditions) Act 2023, has already received Royal Assent, however is lacking the accompanying regulations to bring it into force. The Government proposed to completely ban zero-hours contracts as they give one-sided flexibility to the employer with employees being unsure if they will have working hours week by week. 

Since then, there has been a pre-emptive vote on a watered-down version where employees will be able to choose a zero-hours contract if they wish to work it, for example they are a university student who cannot commit to a set number of hours. 

· How contracts will change

Realistically those operating zero-hour contracts currently need to review if they can give a smaller set number of hours and then pay hourly for any additional hours worked. Employers must be mindful that they cannot pressure employees into choosing a zero-hours contract, and should be offering them a fixed amount of hours to give a base level of predictability and reflect hours accurately worked over a 12 week period. 

It is likely there will also be a requirement to pay shifts or working hours that the employer cancels without reasonable notice. 

Now would be a good time for employers to review their current zero-hour contracts and evaluate whether these employees actually work a minimum number of hours each week and change this to a shorter hours part-time contract. As an aside this will make calculating holidays easier under a part time contract rather than zero hours. 

3. Pay equality

Employers will need to consider the cost of living when deciding salaries, and there are plans to scrap the “discriminatory age bands” of National Minimum Wage 

· Scrapping age bands
This means there will be a standard minimum wage for over 18 year olds. 

Whilst a minimum wage across the board should make it easier to run payroll for businesses that pay hourly, employers will need to consider giving experienced employees potentially higher salaries than before to be significantly above the National Minimum Wage/Living Wage. Note however that justification of this will likely be required otherwise there may be a risk of age discrimination or equal pay claims.

· Outsourcing
A ban will be placed on outsourcing to avoid equal pay for women – whilst this already should be frowned upon, business that choose to outsource work to avoid paying women equal pay will need to address this prior to this law coming into effect. 

· Gender pay reporting
Businesses that are required to report on the gender pay gap must extend this to any outsourced workers they contract in. Larger businesses will be required to publish an action plan on how they intend to close the gender pay gap within their organisation. 

4. Fire and rehire

The new code of practice on the dismissal and reengagement of employees was issued on 18th July 2024 and is now effective within employment law practices. Commonly known as “fire and rehire”, this is where an employer dismisses and then reengages an employee in order to achieve changes to their terms and conditions that the employer wants, usually less favourable than before. 

· What has changed?

The code sets out the employer responsibilities with regards to carrying out the practice of arbitrarily changing an employee’s terms and conditions. Realistically this is something to avoid unless absolutely necessary as it can be a lengthy and complicated process without the correct guidance. 

Now, in the event the procedure is not followed and is brought to Tribunal as part of a claim, employers could now see a 25% uplift in the award if it is proven the employer has unreasonably failed to comply with the code. 

This is not to say that companies cannot propose changes to an employee’s contract based on economic or operational reasons to prevent detriment to the business, however the employer must carry out “meaningful consultations” and take all reasonable steps to explore alternatives to dismissal regardless of the number of employees effected or reasons for seeking changes. 

5. Day 1 protection from unfair dismissal 

Currently an employee has to gain 2 years’ service with a business before they are protected from unfair dismissal and the right to raise a claim this in a Tribunal (with some exceptions such as discrimination or unlawful deduction of wages, to name a couple). While this gives employers the ability to dismiss an employee before they achieve protected rights, i.e. pre 24 months service, the practice actually deters employees from moving jobs where they may lose their protection. We have seen this in real terms through the difficulty in recruiting good people post-covid where employees are unwilling to sacrifice the potential of redundancy pay by moving to a new job, only to be let go shortly afterwards due to economic uncertainty. 

The new legislation intends to give employees protected rights from day 1 right, meaning that if you unfairly dismiss an employee at anytime during their employment, you could be at risk of an unfair dismissal claim. Please note however that this will not prevent you from dismissing someone, provided it is fair and a process has been followed. 

· Potential considerations:

1. Long probations – it is expected that probationary periods would still stand and letting go an employee during this time is lawful, however this has not been confirmed – we are likely to see extensions up to 12 months for probation periods as a way to evade the unfair dismissal route, however please seek advice prior to implementing this. 
There will also be an obligation to ensure fair and transparent probation processes are implemented. 

2. Fixed-term contracts – another consideration may be to put new employees onto fixed-term contracts where they are notified at day 1 that their contract will end in 12, or 24 months. If you terminate them during the fixed period, processes would still need to be followed, however at the end of the fixed term there is no obligation to re-offer them employment. This could be a way to see if the employee is the right fit before making a permanent commitment. Fixed term contracts can only be renewed consecutively up to a maximum of 4 years and we do not recommend this as a long term solution. Please get advice on what these might look like first. 

3. Self-employed/freelancer contracts – although Labour are looking into changing the rights of self-employed individuals, there may be a consideration of taking on someone on a self-employed basis, prior to offering them employment. NOTE: you will still be required to comply with IR35 laws and if a self-employed person appears to be an employee in the eyes of the law, you would be liable for holiday pay, tax and NI so please seek advice. 

Labour has pitched this change as a way of giving employees more job security, however in reality these new protections are set to make it harder to terminate bad employees. Should you wish to consider an increase in support and/or on-site time, please speak to one of the team. 

6. Other day 1 rights 

· Parental Leave
Again an employee has to gain a years’ service in order to be eligible for Parental Leave where employees have a right to 18 weeks unpaid leave a year (this does not include Maternity Leave which is already a day 1 right). In addition, Labour intends to review Parental Leave rights within their first year 

· Bereavement Leave
Although no information has been disclosed on whether this will be paid or unpaid, all workers will have a right to Bereavement Leave. 

· Flexible Working
This was discussed in a previous newsletter when the previous Government made employees able to request flexible working from day one. Labour intends to develop this and make “flexible working a default” except where this is not feasible. Formal consideration will have to be implemented and strong justification for why a request is not possible documented. There are also new shorter time limits for compliance by the employer. 

· Statutory Sick Pay (SSP)
Currently an employee must be earning over an average of £123 per week in order to qualify for SSP and must also have already been off sick for 3 days before being paid from day 4. Going forward, any employee including those who do not earn sufficient income will be eligible for SSP and it will need to be paid from day 1, not day 4. 

7. Maternity Leave – Protection from dismissal within 6 months

There have already been changes to Maternity laws this year, in which those off on maternity have additional protection from being made redundant in a workplace and should be offered right of first refusal. 

The new laws, details of which are not clear, will make it unlawful to dismiss an employee within 6 months of their return from Maternity Leave (with some exceptions)

 8. Preventing sexual harassment

Employers will have a duty to take all reasonable steps to prevent sexual harassment in the workplace, including harassment by a third party (think of employees who are dealing directly with customers such as in hospitality, estate agents, sales people)
Going forward employers will need to conduct risk assessments to identify risk, determine whether steps can be taken to reduce the risk of sexual harassment within roles and educate employees on what is not acceptable, taking active steps to address behaviours and ensure that training occurs and is documented. 

Additionally, there will be stronger protections for women who whistle-blow against sexual harassment. 

We are looking at developing a training course regarding what classes as sexual harassment, how to address this, how to risk assessment and employer duties. If this is something of interest for your business, please get in touch. 

9. Stronger protection for those affected by redundancy / TUPE

There has already been a change to some of current TUPE (Transfer of Undertakings Protection of Employment) legislation in that for transfers of employees after 01 July 2024, if you have fewer than 50 employees OR less than 10 employees transferring, then consultation can take place with these on an individual basis, rather than a collective consultation with representatives.
The new Government is seeking to make additional changes that strengthen employee rights. These include only applying TUPE to employees and not workers, as well as preventing “contract splitting” where an employee is transferred to multiple companies not just one. 

Please note however that TUPE is a complex piece of legislation and is constantly evolving, so contact us if you need any advice. 

10. Stronger protection for whistleblowers

Labour are looking to increase and strengthen the “weak” protections for employees who whistle-blow and will look at the route for workers to make disclosures, and encouraging a change to see the benefits of a genuine disclosure to the business. It is possible that there will be an obligation upon employers to positively inform employees of the right to whistle-blow. 

Currently whistleblowing includes a disclosure of wrongdoing that the whistleblower believes would be in the public interest such as health and safety risks, a criminal offence, a miscarriage of justice, where a company is breaking the law or covering up a wrongdoing. This will be changed to also include protections for women who whistle-blow against sexual harassment although we are unsure why this is only for women as this seems discriminatory. 

Now would be a good time to review your Whistleblowing Policy or implement one if you don’t already have one. 

11. The “Right to Switch Off”

There is no doubt that the UK has a culture where employees work longer hours and in many cases carry their work home with them, and that doesn’t include when they are actually operating flexible working at home. The lines however are blurred and currently there is no standalone employment right for an employee to able to switch off at the end of the working day. The new Government intends to implement a formal piece of legislation to generate an effective work-life balance and prevent employees form working or being contacted after hours. It is also believed that in doing so this could create a healthier working culture and benefit the nation’s mental health issues. 

It is likely that in some cases however that switching off will not be practical such as in the care sector, but the defining of the hours of work and when/how and employee may be contacted out of hours will be embedded into their terms and conditions of employment. The use of software solutions may be required to actively prevent contact being made. 

12. Trade Union Reform

Labour are working to reform Trade Union laws and the powers unions have within the workplace, including:

• Employers will be required to inform their employees of their right to join a trade union
• This will be in their written statement (contract)
• Employees are to be reminded of the right to join on a regular basis.
• Unions will be able to access workplaces in order to recruit and organise (strikes)
• Abolition of minimum service levels potentially meaning full business shutdowns when striking
• Preventing the replacement of striking employees with agency workers – this is a cause for concern within workplaces that would require continued operation whilst strikes were ongoing
• Allowing Union Representatives sufficient time off from work to carry out their duties
• Protection against Union replated intimidation and dismissal

These changes are expected to impact a wider range of employers than just those we deem to stereotypically have Unions (i.e. manufacturing, healthcare) and see collective agreements attempting to influence smaller workplaces that have previously been without. 

13. Increased time limit to bring a Tribunal Claim

Currently employees have 3 months from their date of termination to raise a claim at the Employment Tribunals. The new law will increase this to 6 months from their termination date for statutory claims such as unfair dismissal, disability discrimination and most others. 

At present if the employee engages ACAS as part of the conciliation process then this deadline is increased by a month taking this from 4 to potentially 7 months after an employee is terminated being able to raise a claim.

WEDO offer both outsourced and in-house HR as well as Health & Safety consultancy and would be happy to help you incorporate these changes into your business.If you are a retainer client of ours already then policy updates will be issued prior to or as soon as changes come into effect.

Call 01325 488425 or email admin@wedohr.co.uk for more information.