The King’s speech: Key considerations for employers

The King delivered his speech at the State opening of Parliament on 17 July 2024. Not only did the speech mark a momentous day in our constitutional history – it set out the Labour Government’s employment law proposals which represent ‘the biggest upgrade to workers’ rights in a generation.’

Supported by the briefing notes, the speech confirmed Labour’s commitment to delivering the proposals set out in the ‘Make Work Pay: Delivering a New Deal for Working People’ manifesto. Notably, this included plans to introduce a new Equality (Race and Disability) Bill and the Employment Rights Bill.

Employment Rights Bill

“My government is committed to making work pay and will legislate to introduce a new deal for working people to ban exploitative practices and enhance employment rights.”

Not all of the proposals from the manifesto were mentioned but the speech suggests that the following are at the top of the Labour party’s priority list for inclusion in the draft Bill:

• A ban on exploitative zero-hour contracts
• An end to ‘fire and rehire‘ and ‘fire and replace’ practices
• Introducing day one rights for workers including protection from unfair dismissal, parental leave and pay, sick pay and flexible working
• Strengthening sick pay by removing the waiting period (currently 3 days) and upper earnings limit, to make it available to all workers
• Creating a Fair Work Agency to enforce workplace rights
• Simplifying workers’ rights to unions within the workplace
• Updating trade union legislation.

Labour has committed to introducing a new Employment Rights Bill within the first 100 days of entering government and so the Bill could start its passage through the parliamentary process as early as October 2024. Given the focus on introducing day one rights, employers will need to act promptly to keep pace with their new obligations.

The most controversial proposal is the introduction of day one rights including the right to protection from unfair dismissal. We comment on this proposal in our recent article here.

Draft Equality (Race and Disability) Bill

“Legislation on race equality will be published in draft to enshrine the full right to equal pay in law.”

The Bill aims to create a more equal society and support a growing economy by introducing mandatory ethnicity and disability pay reporting for large employers (more than 250 employees) and a full right to equal pay for ethnic minorities and disabled people.

As the Bill is still in draft form, it is unlikely to be introduced within the first 100 days of government. Given the potentially complex nature of the draft bill, it is likely that Labour will want extensive consultation on the content to be covered in the Bill before it is introduced.

Key considerations for employers

Without sight of the draft legislation, it remains to be seen when and to what extent these proposals are to be implemented. The Bills will likely require further amendments before being passed in Parliament. Even if the Bills are passed next year – we expect a transition period for the legislation to come into force because further statutory guidance may be required to supplement the Bills and ensure they function as intended. Employers should stay up to date with ongoing developments and engage in government consultations launched to ensure effective feedback is given.

Other proposals included in the briefing note may be implemented sooner, such as giving people a genuine living wage (based on the cost of living) and removing the lower wage rate for 18 to 20 year olds. Neither of these changes require primary legislation and so we could see these changes executed in the next minimum wage review, from as early as April 2025.

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If you have any employment law questions or require our advice and assistance, please contact a member of our team.