Employment law changes—Labour’s plan to Make Work Pay

The Bill itself contains 28 employment law reforms and it was published along with a “Next Steps” document setting out plans that the government intends to implement in the future, including a statutory “right to switch off”, a review of parental and carer’s leave, and a move towards simplifying the tests for employment status.

Covering issues from zero-hours contracts and ‘fire and rehire’ practices, to trade union recognition, sick pay and workplace discrimination, it’s safe to say the new Bill represents the most significant shake-up to UK employment law in a very long time.

The Bill will now start its passage through parliament and there are likely to be some changes before the proposals become law. Although we don’t expect the reforms to take effect until 2026, the significance of the planned changes means employers need to be aware of what’s on the horizon. 

Unfair dismissal rights from day 1 of employment – removing the requirement for employees to work for 2 years before qualifying for protection from unfair dismissal. The government will consult on a new statutory probation period to allow employers to assess the suitability of new hires. We don’t yet know how long the statutory probation period will be, but rumours suggest between 6 and 9 months. 

Ending ‘exploitative’ zero-hours contracts – the first 24 pages of the Bill are dedicated to the reform of zero hours contracts, including:

• Requirements for employers to make guaranteed hours offers to zero hours workers who work consistent hours during a particular period.
• Rights for workers on zero hours or casual contracts to be given reasonable notice of a shift, including when the shift will be and its length, and to receive reasonable notice on cancellation or change to a shift. 
• Right to payment for cancelled, moved or curtailed shifts at short notice.

Strengthening Flexible Working – making flexible working the default where practical unless the employer can prove it’s unreasonable to do so (the Bill contains a list of reasons for refusal) and this needs to be explained to the employee in writing.

Strengthening Statutory Sick Pay – removing the current three-day waiting period for statutory sick pay to kick in and lowering the earnings limit in order to be eligible for statutory sick pay.

Entitlement to paternity, unpaid parental and bereavement leave from day 1 of employment

Gender pay gap and menopause – employers with 250 or more employees will have to publish gender pay gap action plans and menopause action plans, with penalties for failing to comply.

Protection from Sexual Harassment and Third Party Harassment – from 26 October 2024, employers will have a duty to take “reasonable steps” to prevent sexual harassment in the workplace. The new Bill strengthens this further by requiring employers to take all reasonable steps and also reintroduces employers’ liability for third party harassment (unless the employer can show that they took “all reasonable steps” to prevent the harassment). Disclosure of sexual harassment will also be added to the list of whistleblowing ‘protected disclosures’. 

Ending exploitative ‘fire and rehire’ practices – it will be automatically unfair to dismiss an employee for refusing to accept a change to their contract of employment, except in limited circumstances where the employer’s reason was to “eliminate, prevent or significantly reduce, or significantly mitigate the effect of any financial difficulties” which are serious enough “to affect the employer’s ability to carry on the business” and the employer can show that they carried out detailed consultation with affected employees.

Redundancy and restructures – changes to the trigger for collective redundancy consultation to remove the requirement for proposed redundancies to be “at one establishment”, meaning redundancies at all of an employer’s sites or offices will need to be included in the calculation. Increased protection for employees who transfer from the public sector when a public service is outsourced. 

Trade unions – new requirement for employers to tell their workers that they have a right to join a union; giving trade union officials wider rights to access the workplace for recruitment, organising and collective bargaining purposes; new protections for trade union representatives and members; making it easier for trade unions to get workplace recognition.

Establishing a new Fair Work Agency which will bring together existing enforcement powers and enforce rights such as holiday pay, while providing support to employers looking for guidance on how to comply.

It will take some time for the Bill to make its journey through the House of Commons and the House of Lords and we may see certain proposals being watered-down along the way. Many of the changes will also require consultation and the government has indicated that this will begin next year.

Given the huge amount of detail contained within the Bill, we will continue to provide further information and updates as the parliamentary process runs its course. 

If you have any questions about how the Bill will affect your organisation, or about how best to prepare for these changes, Russell-Cooke’s employment specialists are available to support you.

Sam Lawn is an associate in the charity law and not-for-profit team. He has experience advising on a wide variety of employment law issues, including redundancies, discrimination, whistleblowing disputes and the operation of TUPE.