Labour’s plan for Employment Law – July 2024 Newsletter

The King’s Speech – Labour’s legislative agenda

On Wednesday morning, July 17th, the King’s Speech outlined Labour’s legislative agenda for their initial months in government. The Speech briefly mentioned “legislation to ban exploitative practices and enhance employment rights.” The Prime Minister’s briefing notes provide further detail, indicating that Labour is eager to fully implement their ‘New Deal for Working People.’ According to the briefing notes, the Employment Rights Bill will include:

• Making parental leave, sick pay and protection from unfair dismissal available from day one (subject to special rules for probationary periods)
• Ending ‘fire and rehire’ and ‘fire and replace’ by reforming the law and replacing the statutory code
• Banning zero-hour contracts, ensuring that workers have a right to a contract that reflects the hours they regularly work
• Making flexible working the default for all workers from day one and requiring employers to accommodate this as far as is reasonable
• Removing the lower earnings limit and waiting period for Statutory Sick pay
• Creating the Fair Work Agency to enforce workplace rights
• Introducing a Fair Pay Agreement in the adult social care sector
• Repealing the law on minimum service levels in relation to industrial action
• Simplifying the process of statutory recognition for trade unions
• Making it unlawful to dismiss a woman who has had a baby for six months after she comes back to work (with certain exceptions)
• Introducing a right for workers and union members to access a union within workplaces

A slight word of caution on the briefing notes: they state that “the Bill will deliver on policies as set out in the Plan to Make Work Pay” and that “the Plan includes commitments to the following”—with much of the list detailed above. However, it does not explicitly state that all aspects of the Plan will be included in the Bill itself. This may be a matter of word-play, so we will need to wait for the Bill itself to know for sure.

Other changes expected from the new Labour government which were not included in the King’s speech also include:

• Thresholds for redundancy consultation – collective consultation requirements will be triggered if redundancies reach a defined threshold across the business as a whole.
• Outsourcing/TUPE – Labour says it will strengthen the rights and protections for workers transferred under TUPE (but has not said how).
• Right to disconnect – Whilst the details are unclear, Labour says it will bring in the ‘right to switch off’, to give workers and employers the opportunity to develop workplace policies or contractual terms.
• Single status of worker – to abolish the UK’s current three-tier system for employment status. This would be replaced by a simple framework where people are either workers or self-employed, abolishing the current distinction between ‘employees
• Stronger protection for whistleblowers – employees who report sexual harassment will be automatically counted as whistleblowers.

Separately, a draft Equality (Race and Disability) Bill proposes to “enshrine the full right to equal pay law” for disabled people and ethnic minorities. The same bill also proposes mandatory ethnicity and disability pay gap reporting. Both of these proposals present significant practical challenges.

Legislative Developments

Fire and rehire: The statutory code of practice on dismissal and re-engagement has now been formally passed and will come into force on 18 July 2024.

Paternity leave – bereavement: The Paternity Leave (Bereavement) Act 2024, which addresses paternity leave where the mother, or person with whom a child is or is due to be placed for adoption, dies, has received royal assent. However, it requires regulations to be enacted before it can come into force.

Artificial intelligence (AI): The EU Artificial Intelligence Act was approved on 21 May 2024, harmonising rules across the EU on the use of AI systems. This legislation affects businesses not only inside the EU but also outside the EU where the output of the AI system is used within the EU. The majority of provisions will start to apply in two years, although some will apply in six to 12 months.

New TUPE rules: From 1 July 2024 employers no longer have to consult with affected employees via representatives where the TUPE transfer involves fewer than 10 employees (regardless of the size of the employer).

Case Law Updates

Adekoya and others v. Heathrow Express Operating Company Ltd

– Contractual benefits: An employer was not entitled to remove life-long travel benefits provided by a third party where there was a right to retain the benefit post-termination if the employees were made redundant with more than five years’ service. The claimants met these criteria, and it was established that the terms had been incorporated into the employees’ contracts of employment and that the contractual position had not been changed by the third-party provider having given notice to the employer that benefits would stop on termination for anyone employed after 1996 (which included all the claimants).

Clifford v IBM UK Ltd

– Settlement agreements: A disabled employee who entered into a settlement agreement in 2013, but who remained in employment under his employer’s “disability plan,” has been precluded from bringing a disability discrimination claim in relation to payments received under that plan. The settlement agreement included a waiver of, among other things, disability discrimination claims, whether or not the claims were or could be in the contemplation of the parties at the date of the agreement. Although there was an exception in respect of the ability to bring future claims, this did not apply in respect of matters related to the grievance that led to the settlement agreement and his transfer onto the disability plan. The Employment Appeal Tribunal (EAT) was satisfied that the claimant’s new complaints fell within the scope of the waiver and that the waiver was valid, thereby preventing the claimant from further complaint.

New report indicates that UK workers are disengaged, stressed and angry

Only 10% of workers say that they feel connected to their jobs, according to Gallup’s State of the Global Workforce 2024 report.

Key findings:

• 90% of UK employees are disenchanted with their roles
• 40% of UK workers experience daily stress, while 27% feel sadness each day, ranking second highest across Europe for these negative emotions
• 20% of UK employees report feeling angry every day.

In contrast, the global average for employee engagement stands at 23%, with the US reporting a higher 33%.

The data, collected in 2023 from over 128,278 working adults in more than 160 countries, indicates a strong correlation between economic factors and active disengagement. The authors believe that the decline in UK job vacancies since the post-pandemic peak in 2022 has left workers with fewer opportunities, leading many to remain in unsatisfactory roles.

By Suraj Purohit.

Employment Paralegal at Kalra Legal Group.

22/07/2024.