Rights and obligations – what is Labour planning?

Following the King’s speech on 17 July, the Labour government provided more detail on its plans to change employment law rights and obligations. The main focuses are an Employment Rights Bill and a Draft Equality (Race and Disability) Bill. While we wait for the detail of draft legislation laid before parliament, this article offers some brief comments on the headline issues. 

Employment Rights Bill (ERB)

Labour’s manifesto made clear that it would introduce wide-ranging legislation within 100 days of being elected. The explanatory notes that accompanied the ERB confirm the new government proposes the following policies across the UK:

• Creation of a new single enforcement body to strengthen the enforcement of workplace rights. The lack of adequate enforcement is widely acknowledged as a barrier to access to justice. For example, the Taylor review reported as much back in July 2017. Employment tribunal claims often still take years before a final hearing and a high proportion of successful awards go unpaid.  
• Banning exploitative zero-hours contracts (ZHCs). Many practitioners will view this with particular interest, given the increased usage of such employment contracts in recent years. The related topic of ‘employment status’ will also inevitably need consideration because of disputes over whether those employed under ZHCs are workers, employees or genuinely self-employed.
• Ending the practice of ‘fire and rehire’.  This is another policy that will face scrutiny due to the current prevalence of dismissal and re-engagement by businesses seeking to force reorganisation in order to survive. A major concern relates to unintended redundancies from legislation that is too blunt. However, few can argue against the need for legislation to prevent fire and rehire being used as a knee-jerk reaction, rather than as a last resort, by a struggling business.
• Amending parental leave, sick pay and unfair dismissal protection to make it available from day one for all workers, subject to probationary periods for new starters. The introduction of ‘day one’ rights is controversial with regard to the potential impact on small businesses, although it will be welcomed by low-paid and vulnerable workers as well as the trade unions that represent them.  
• Extending protections to make it unlawful, subject to limited specified circumstances, to dismiss a woman who has had a baby for six months after she has returned to work.  
• Removing the lower earnings limit and the waiting period from the eligibility criteria for recipients of statutory sick pay.  
• Updating trade union legislation. This is expected to involve the repeal of the Trade Union Act 2016 and Strikes (Minimum Service Levels) Act 2023 and bring reforms that widen access for trade unions to enter workplaces for the purpose of collective bargaining.  
• Introducing sectoral collective bargaining through a fair pay agreement (FPA) in the adult social care sector, and reinstatement of the School Support Staff Negotiating Body. The former is the first FPA in the UK and may follow models used overseas. The latter was dropped by the Conservative-led coalition in 2010 because it did not fit with the (then) government’s priorities for greater deregulation of pay and conditions for the estimated 500,000 support staff in UK schools.

Draft Equality (Race and Disability) Bill

The aim of this draft bill is, we are told, to ‘enshrine the full right to equal pay in law’ for those who are ethnic minorities and those who are disabled. Rather than following the format of the ERB, this draft bill is due to be published for consultation before it is presented to parliament, so will undoubtedly face comparison with the historical process followed for equal pay and gender pay gap reporting.

The bill would also introduce mandatory ethnicity and disability pay reporting for employers with 250 or more employees. This is because pay disparities exist for most ethnic minority groups compared with white British groups and also for disabled people in comparison with non-disabled people. We might all hope that this runs more smoothly than the equal pay matters that have troubled employment tribunals for decades.

Miscellaneous matters

While no bill expressly introduces rights and obligations relating to new technologies and artificial intelligence, there was a strong hint in the King’s speech that this may be in the pipeline. For the time being, there is a Digital Information and Smart Data Bill. This creates an overlap between some existing employment and data protection laws via data verification services and plans to strengthen the Information Commissioner’s Office.  

Another important and complex area of law that overlaps with employment law arises from proposed pension reforms.  First, a Pension Schemes Bill which follows on from the last government’s ‘Mansion House’ reforms announced in July 2023. Second, an Audit Reform and Corporate Governance Bill will replace the Financial Reporting Council, which regulates auditors, accountants and actuaries.

Overall, given the scale of change, it seems fair to assume that the next few years will be very busy for employment law.

Bruce Robin is legal officer and in-house solicitor at trade union Unison