UK General election 2024: What are the changes to Employment Law under the new government?

by Aneil Balgobin, Partner and Head of Employment, Anthony Gold.

The UK General Election, held on 4th July 2024, marked a significant shift in the political landscape, with the Labour Party securing a decisive victory.

This change in government brings a new wave of legislative reforms, particularly in employment law. As businesses brace for these changes, understanding the upcoming legal landscape is crucial. This article delves into the key employment law changes that the new government has promised to implement and what they mean for you. Please do take this information with a pinch of salt – it is accurate as of the time of publishing, but it is subject to change depending on how the government proceeds with the promised legislation and what will actually be in it.

What are the key Changes?

What are the new minimum wage rates?

One of the flagship policies of the new government is the substantial increase in the minimum wage. This move aims to enhance the living standards of low-income workers across the UK.

• New Rates: The minimum wage will see a phased increase over the next few years, eventually reaching £12 per hour by 2026.

• Impact on Businesses: While beneficial for employees, this hike presents a significant financial challenge for businesses, especially SMEs. Employers must budget for these increased labour costs and possibly rethink their staffing and operational strategies.

• Compliance Requirements: Employers must ensure they adjust their payroll systems accordingly to meet these new rates. Noncompliance could result in hefty fines and legal repercussions.

How will employment rights and worker protections expand?

The new government is committed to expanding employment rights and strengthening worker protections, particularly focusing on vulnerable and gig economy workers.

• Flexible Working: The right to request flexible working arrangements will be extended to all employees from their first day of employment, making it a default right rather than a privilege earned over time.

• Unfair Dismissal: Protections against unfair dismissal will be bolstered, reducing the qualifying period for claims from two years of continuous employment to being a day one right subject to a probation period or to one year (waiting to be seen).

• Gig Economy Workers: Gig economy workers, often classified as independent contractors, will gain new rights, including holiday pay and minimum wage entitlements. This change aims to curb exploitation and ensure fair treatment across all sectors.

What changes are being made to empower trade unions?

In a bid to rejuvenate trade unions and strengthen collective bargaining, the new government has introduced several measures to empower these organisations.

• Strengthening Unions: New regulations will facilitate easier union formation and membership, encouraging collective action and representation.

• Collective Bargaining: There will be an emphasis on promoting collective bargaining agreements, ensuring that more workers can negotiate terms and conditions collectively through their unions.

• Strike Actions: The thresholds for legal strike actions will be lowered, making it easier for unions to organise industrial actions. This shift aims to balance the power dynamics between employers and employees, providing a stronger voice for the workforce.

How will parental leave and pay be enhanced?

The new government has also pledged to improve parental leave entitlements, recognising the importance of family support and work-life balance.

• Increased Entitlements: Parental leave entitlements will be extended, providing more paid leave for new parents. This includes longer maternity, paternity, and adoption leave periods.

• Paternity Leave: Fathers will see an increase in paternity leave from two weeks to six weeks, fully paid.

• Shared Parental Leave: The shared parental leave scheme will be made more flexible, allowing parents to take leave in blocks or simultaneously, and extending the total available leave.

What new equality and diversity measures are being introduced?

Promoting equality and diversity in the workplace is stated to be a key focus of the new government, with several measures being introduced to ensure fair treatment for all employees.

• Gender Pay Gap Reporting: The threshold for mandatory gender pay gap reporting will be lowered, requiring more businesses to disclose their pay disparities and take action to close the gap.

• Diversity Quotas: Large companies will be required to meet new diversity quotas, ensuring representation of women, ethnic minorities, and other underrepresented groups in senior positions.

• Anti-Discrimination Policies: Employers will need to implement comprehensive antidiscrimination policies and training programs to foster inclusive workplaces.

When will these changes be implemented?

The new employment law changes will be rolled out in phases, with some taking effect immediately and others being introduced over the next few years.

• Immediate Changes: Certain protections, such as the right to flexible working from day one, is planned to be implemented within the first year.

• Phased Implementation: Other changes, like the minimum wage increase, will be phased in gradually to allow businesses time to adjust.

How can businesses ensure compliance?

Businesses must take proactive steps to comply with the new regulations and avoid penalties.

• Review Policies and Contracts: Employers should review and update their employment policies and contracts to reflect the new laws.

• Training and Awareness: Providing training and raising awareness among management and staff about the changes is crucial.

• Seek Legal Advice: Consulting with legal experts can help businesses navigate the complexities of the new employment laws and ensure full compliance.

Conclusion

The new government’s employment law reforms represent a significant shift in the UK’s legal landscape. These changes aim to improve worker protections, promote equality, and empower trade unions. While these reforms bring benefits, they also pose challenges for businesses that must adapt to new regulations and to employees navigating their new rights and entitlements (or enforcing them, in some cases). Staying informed and proactive is key to navigating these changes successfully.

For further guidance and support, contact Anthony Gold Solicitor’s Employment team for expert legal advice.