As the dust settles on Labour’s general election win, Wright, Johnston & Mackenzie LLP (WJM) employment law expert Liam Entwistle explored employment law changes on the horizon after Labour unveiled its “Plan to Make Work Pay”, and outlined those proposals in the King’s Speech.

So, what’s next? The Employment Law Bill is set to be introduced before October 4 (within 100 days of Labour entering government) and will play a crucial role in delivering the plan.

Below Liam has provided a summary of the Governments’ Plan to Make Work Pay.

Once the Bill arrives, we will know for sure what parts of the plan are being pushed forward now, and which have (at least temporarily) fallen by the wayside.

Trade Unions and Collective Consultation

Labour’s “voice at work” section of the plan centres around the idea of bringing in a new era of partnership by:

• Repealing the minimum service levels in relation to industrial action as per the Minimum Service (Strikes) Act.
• Repealing the Employment Agencies and Employment Business (Amendment) Regulations – the High Court quashed the Regulations in 2023 and so they are not currently in force however have remained on the statute books.
• Reversing the changes made under Trade Union Act 2016: increase in ballot turnout; additional information for ballot papers; 6-month mandate for strike action; and two weeks’ notice of industrial action (whereas previously it was one week).
• Allowing unions will be allowed to ballot members electronically, in addition to ballot via post.
• Simplifying the process of statutory recognition for trade unions.

For example, unions will no longer be required to show that 50% or more of their workers are likely to support their claim before the process begins, and unions will no longer be required to obtain simple majority on the final ballot.

• Ensuring additional rights for trade unions to access workplaces to recruit and organise; Union reps to meet, represent, recruit and organise; ensuring appropriate facility time; strengthening protections against unfair dismissal, threats and blackmailing.
• Introducing a new duty on employers to inform all new employees of their right to join a union on a regular basis as well as putting this in their contract of employment.

New Day One Employment Rights

• Labour plans to introduce new ‘day one rights’ for all workers. These will be basic individual rights on parental leave and sick leave and protection against unfair dismissal for all workers on ‘day one’ of their employment
• Fair dismissal will not be prevented, e.g. dismissal for capability, conduct, redundancy, or probationary periods with fair and transparent rules and processes.
• Flexible working will also become the default for all workers from day one – employers will be required to accommodate this as far as reasonably possible.

Fair Pay

• Labour also intend on strengthening statutory sick pay by removing the lower earnings limit and waiting period to ensure that all workers will be able to receive it. They also intend to provide fair earnings replacement for people earning below current rate of statutory sick pay.
• It is also planned that a Fair Pay Agreement will be introduced to the adult social care sector.

Genuine Living Wage

In addition to the Bill, Labour intends to create a “genuine living wage” to account for the cost of living. They will do this by:

• Changing the remit of the Low Pay Commission to take into account the cost of living when setting rates, in addition to median wages and economic conditions.
• Removing age bands so that everyone aged 18 and over will get the same hourly rates of pay.
• Ensuring that workers who work across multiple sites receive the National Minimum Wage for their travel, and that this is reflected in their contract.

They plan to work with the Single Enforcement Body and HMRC to ensure that they have the powers necessary to make sure Labour’s genuine living wage is enforced. There will be penalties for non-compliance.

Others

• Zero Hour contracts are to be banned, to ensure that workers have a right to a contract that reflects the hours that they regularly work. This is to end the one-sided flexibility and ensure all jobs provide a baseline level of security and predictability. The proposals so far reflect some of the recommendations that were previously made in the 2017 Taylor Review of Modern Working Practices.
• ‘Fire and Rehire’ and ‘Fire and Replace’ schemes are to be reformed by the Employment Rights Bill and replace the statutory code introduced by the Conservative government – which came into force on 18 July 2024.
• Worker Status is also subject to change, with Labour planning on abolishing the three separate types of employment status (employees, workers, self-employed) and move towards a single status of worker. Labour have acknowledged that this will take some time and we therefore do not expect to see the change come into place straight away.
• Providing further protections for women returning from maternity leave by proposing to make it unlawful for an employer to dismiss a woman who has had a baby for a period of six months after she returns to work. There will be certain exceptions to this, which are yet to be set out.
• Establishment of a new single Enforcement Body – “the Fair Work Agency”, to enforce workplace rights and levy fines.
• Improve and strengthen enforcement through Employment Tribunals to provide quicker and more effective resolutions. Employers should note that Labour have intentions to increase the time limit within which employees can bring a claim from three to six
• A draft Equality (Race and Disability) Bill proposes to “enshrine a full right to equal pay law” for disabled people and ethnic minorities. The Bill also proposes mandatory ethnicity and disability pay gap reporting.