This includes changes to employment legislation. So, what does this mean for employers? Some of the key changes from the many proposed are listed below.
Minimum wage reform
It is said that the minimum wage will increase to take account of the cost of living, while the government also plans to remove age bands from the minimum wage ensuring each adult worker is paid the same.
Statutory sick pay
Statutory sick pay (SSP) will be extended to those who are below the lower earnings limit, which is currently set at £123 a week. And the waiting period that requires employees to be sick for three days before they will be entitled to SSP, will also be removed.
Zero-hour contracts
The government will effectively ban zero-hour contracts. Zero-hours contracts are also known as casual contracts. These contracts are often used for ‘piece work’ or ‘on call’ work. Instead of such arrangements, every person will have the right to have a contract that reflects the number of hours they regularly work based on a 12-week reference period. Employers will be required to pay compensation when working hours are cancelled without reasonable notice.
Meanwhile, unpaid internships will be banned except where they are part of an educational or training course.
Fire and rehire
The statutory code of practice on dismissal and re-engagement came into force on 18 July 2024. The new code deals with ‘fire and rehire’, a situation that may arise in the event that an employer cannot agree a proposed change to an employee’s terms and conditions of employment with them, resulting in the employer terminating the employee’s employment and rehiring them on the amended terms and conditions.
The code sets out that fire and rehire should only be used as a last resort, with a requirement to consult for as long as reasonably possible and employers need to explore alternatives. Once it is clear the changes are not agreed, then the employer should re-examine them and consider feedback. Employers should not threaten dismissal if it is not actually envisaged and must not use threats to coerce employees into agreeing the changes proposed.
Day one rights
The current employment system, which can leave some workers waiting two years to access protection rights against unfair dismissal and one year to access parental leave, will be replaced by a system that gives workers these rights from day one. Employers will still be entitled to operate probationary periods, but these must be ‘fair and transparent’. Employers will also still be entitled to engage in a fair dismissal which will remain the same.
Single status of worker
The current three-tier system, which classifies people as either employees, self-employed or workers, will be replaced with two categories: worker and self-employed. Those who are currently classified as workers will therefore likely see their rights extended to the level of an employee. Self-employed workers will be granted the right to a written contract.
Flexible working
The government has said that it will change the law so that flexible working will be the default from day one for all workers “except where it is not reasonably practicable”.
Working from home
Proposed changes to flexible working include: employees having ‘the right to switch off’ and workers and employers will be encouraged to have constructive conversations to find a solution which benefits both parties. The government has stated that it will follow the ‘Irish or Belgian model’. This suggests a breach of the right will have minor legal consequences.
Trade union legislation updates
Employers will be required to inform workers of their right to join a union. Laws will also be introduced that: remove limitations on trade union activity; abolish minimum service levels; prevent agency workers replacing striking workers; change the level of support required for a trade union to a simple majority; and simplify ballots and the creation of ballots.
Pay gap reporting
Large businesses will be required to publish action plans to close their gender pay gaps. Outsourced workers must be included in this reporting. Employers with over 250 workers must also publish their ethnicity and disability gaps.
Menopause in the workplace
Employers with over 250 employees will be required to produce menopause action plans setting out how they will support employees through the menopause. Guidance will also be published for smaller businesses.
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