With the new Labour government firmly established in Whitehall, significant changes to employment law are on the horizon for employers across England, Wales, and Scotland. These employment law reforms aim to enhance worker rights and introduce new standards affecting everyday business operations. Labour’s “Plan to Make Work Pay” outlines these changes, which vary in significance and impact. Here’s a summary of the key employment law changes 2024 that employers must be aware of.
1. Unfair Dismissal – Day One Right
One of the most monumental shifts in employment law is the introduction of protection from unfair dismissal from the first day of employment. Currently, employees gain this protection after two years of continuous service. This change means employers must identify a fair reason and follow a prescribed process to terminate an employee lawfully.
While beneficial for employees, this reform may lead to more rigorous recruitment processes and extended probationary periods. As a result, employers might face higher termination costs and increased tribunal claims.
2. Enhanced Redundancy and TUPE Rights for Employees
Labour plans to tighten regulations, making it harder for employers to avoid triggering collective consultation requirements in redundancy situations. Under current law, collective consultation is required when 20 or more redundancies are proposed within a 90-day period at a single “establishment.” However, the definition of “establishment” has been contentious, particularly following the Woolworths case, where each store in a retail chain was considered its own establishment. This interpretation allowed Woolworths to, in some instances, bypass or reduce its obligation to consult employees collectively.
Labour intends to amend the law so that, when calculating the number of employees at an “establishment,” redundancies across a company’s various sites will be combined. This change will likely lead to collective consultation obligations being triggered more often, requiring employers to maintain ongoing 90-day counts of redundancies across all their locations.
Additionally, Labour plans to clarify that the protections under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) will explicitly extend to workers, not just employees. This follows Labour’s proposal to eliminate the distinction between “employees” and “workers.” In short, TUPE ensures that when certain conditions are met during an asset transfer or a change of service providers, employees are automatically transferred to the new entity. If workers were also covered by TUPE, it would mean that in scenarios like acquisitions, the buyer could be required to take on a wider range of individuals, such as those on zero-hour contracts, than under the current rules.
3. Right to Flexible Working – Day One Right
As of 6 April 2024, the right to request flexible working became a day one right. The Labour government plans to extend this further, making flexible working the default for all workers from their first day of employment, except where it is not reasonably feasible. This reform aims to support workers with caring responsibilities and promote a better work-life balance.
4. Statutory Sick Pay – Day One of Sickness Right
Labour reforms include the removal of the four-day waiting period for statutory sick pay (SSP), payable from the first day of sickness. While this increases costs for employers, it provides immediate financial support for ill employees. The government has yet to confirm if the SSP rate will increase from its current £116.75 per week, but it plans to remove the lower earnings limit.
5. Right to Switch Off
Inspired by flexible European models, the Labour government will introduce the ‘right to disconnect.’ This promotes healthier working practices by allowing employees to disengage from work outside regular hours. Employers and workers will collaborate to develop policies or contractual terms that support this right.
6. Family Leave Changes
The Labour government plans to overhaul the parental leave system, making it a day-one right. This likely means extending this right to other types of family leave, such as paternity leave, which currently requires six months of employment. Additionally, new legislation protects pregnant women from redundancy by ensuring suitable alternative employment. The government intends to safeguard those returning from maternity leave further.
The right to one week’s unpaid carer’s leave, effective from April 2024, may also become a paid entitlement under Labour’s reforms, though this is not yet guaranteed.
7. Bereavement Leave
The Labour government plans to make bereavement leave a statutory entitlement, formalising what many employers offer as compassionate leave.
8. Increased Protection from Sexual Harassment
From October 2024, employers will have a proactive duty to take ‘reasonable steps’ to protect employees from sexual harassment. Labour plans to strengthen this by requiring employers to take ‘all reasonable steps’ to prevent harassment by third parties such as customers.
9. More Pay Gap Reporting (for Employers with 250+ Employees)
In addition to gender pay gap reporting, Labour will make ethnicity and disability pay gap reporting compulsory for employers with at least 250 employees. This will increase the burden on data handling, diversity and inclusion reporting, and HR compliance management.
10. Race Equality Act
Labour aims to extend the right to equal pay claims to black, Asian, minority ethnic, and disabled workers. Introducing a right to claim ‘dual discrimination’ will allow individuals to claim discrimination based on two protected characteristics: race and gender.
11. New Single Status of “Worker”
Labour plans to simplify employment status by creating a new system where individuals are designated workers or self-employed. This change eliminates the legal distinction between ’employees’ and ‘workers.’ However, it raises questions about how rights such as sick pay and family leave will be delineated and how taxation will be handled. Currently, ‘workers’ are taxed as self-employed, but under the new system, they may be taxed as employees, potentially increasing employer costs.
Legislation regarding these proposals is expected to be presented to Parliament within the first 100 days of Labour’s tenure. Employers should stay informed and prepare for these impending changes.
Stay Up-to-Date The Best Employment Law Consultancy
Employers must stay ahead of the curve as the new Labour government implements these comprehensive employment law reforms. From unfair dismissal protections and flexible working rights to statutory sick pay from day one and enhanced protections against harassment, these changes to employment law will significantly impact how businesses operate and manage their workforce. Introducing new reporting requirements and simplifying worker status also underscore the importance of robust HR practices.
Staying compliant and adapting to these employment law changes 2024 UK will require informed and strategic planning. Employers must review and update their policies, recruitment processes, and employee management strategies to align with the new regulations.
To help you navigate these changes, HR Team will be organising an informative webinar entitled “Employment Law Updates in GB.” This webinar will provide detailed insights and practical advice on complying with the latest employment law changes in 2024/2025. Please check our website for further details.
Contact HR Team, the best employment law consultancy for expert guidance on navigating these employment law changes in 2024/2025. Our consultancy services offer the support you need to ensure your business remains compliant and well-prepared for the future.
