Q&A: The Election Special

It may seem an age ago now, but a few days after the Labour government assembled at 10 Downing Street, The HR World held an Election Special webinar to discuss what the new government would mean for the workplace and HR.

Sponsored by and featuring experts from Maru Search and Consulting and Osborne Clarke, the webinar was full of information and knowledge as to the implications of Labour’s manifesto and what might happen next. Here Maru’s Managing Director Hannah Waddington and Osborne Clarke Senior Associate Alice Spicer Edwards give their view on the King’s Speech and what HR should be ready for next.

1: What is your response to the Kings Speech?

Hannah: King Charles III’s speech outlined key worker’s rights initiatives in the Labour government’s legislative programme, focusing on security, fairness, and opportunity. The government plans a new employment rights bill to ban exploitative practices, with collaboration promised between businesses and workers. Reforms include a new Skills England body, changes to the apprenticeship levy, and a draft Equality (Race and Disability) Bill for equal pay. A pension schemes bill aims to increase savings, and AI legislation seeks to regulate new technologies. The speech also addressed efforts to reduce long-term economic inactivity post-pandemic.

In my view, the reform to the apprenticeship levy is a positive step, providing much-needed support for career development, particularly for older workers. The focus on Diversity, Equity, and Inclusion (DEI) through the Equality Bill is also crucial, promoting fairness and supporting disabled workers. Prioritising employee wellbeing is essential, acknowledging the link between health and economic policy. These changes reflect a progressive approach to addressing workers’ needs and fostering collaboration between the government, businesses, and employees.

Alice: As anticipated the King’s Speech confirmed that the new government will push forward with plans to introduce a new deal for working people to ban exploitative practices and enhance employment rights in a new Employment Rights Bill. Plans were also announced for a Skills England Bill and draft Equality (Race and Disability) Bill – again reflecting Labours pre-election promises.

While we must wait for the detail, we do now have a little more information; the government’s briefing paper accompanying the King’s Speech states that it intends to introduce in the Employment Rights Bill the measures set out in its Make Work Pay plan that require primary legislation. We have set out details of the measures in that plan in this Osborne Clarke Insight.

However, the wording of the briefing paper is unclear as to which of the Make Work Pay measures will be included at this stage in the new Employment Rights Bill, but the following are expressly referred to and may provide some indication as to what businesses can expect:

• Banning exploitative zero-hours contracts.
• Ending the scourges of “fire and re-hire” and “fire and replace”.
• Making parental leave, sick pay and protection from unfair dismissal available from day one on the job for all workers. Ensure employers can operate probationary periods to assess new hires.
• Strengthen statutory sick pay by removing lower earnings limit as well as waiting period.
• Make flexible working default from day one for all workers – employers will be required to accommodate this as far as is reasonable to reflect the modern workplace.
• Strengthen protection for new mothers by making it unlawful to dismiss a woman who has had a baby for six months after her return to work except in specific circumstances.
• Establish a new Single Enforcement Body, also known as a Fair Work agency.
• Update trade union legislation so it is fit for a modern economy, including removal of minimum service levels.
• Simplifying the process of statutory recognition and introducing a regulated route to ensure workers and union members have a reasonable right to access a union within workplaces.

It is confirmed that the bill will extend and apply to Great Britain.

Draft Equality (Race and Disability) Bill

The King’s Speech also announced that the government will publish legislation in draft to “enshrine the full right to equal pay in law” for ethnic minorities and disabled people through a new draft Equality (Race and Disability) Bill.

Mandatory ethnicity and disability pay reporting for larger employers (those with 250 plus employees) will also be introduced to help close the ethnicity and disability pay gaps. It is envisaged that surfacing pay gaps will enable companies to constructively consider why they exist and how to tackle them.

Again, the draft bill is likely to extend and apply to Great Britain mirroring measures in the Equality Act 2010 relating to equal pay and gender pay reporting.

Minimum wage changes

The government has also confirmed that it “will deliver a genuine living wage that accounts for the cost of living and remove the discriminatory age bands to ensure every adult worker benefits”.

2: What should HR professionals be now doing in order to prepare for what’s to come?

Hannah: HR professionals should focus on a few key areas to prepare for the upcoming legislative changes:

• Update Policies and Practices: Review and update employment policies related to rights, DEI, and training. Ensure your policies on zero-hours contracts, dismissal processes, and fire and rehire practices are compliant with the anticipated changes. This will help mitigate risks and ensure smooth implementation.
• Strategise Apprenticeship and Training Programs: Assess where your current skills shortages are and determine where to focus your training strategy. Engage with business stakeholders to ensure apprenticeship levy funds are directed to the right areas. This targeted approach will help address skills gaps and strengthen your workforce.
• Enhance DEI Initiatives with Accurate Data: Ensure your DEI data is accurate and usable. Conduct comprehensive audits to collect and verify information on race, gender, disability, and pay disparities. Having reliable data is crucial for identifying issues and measuring the impact of your DEI initiatives. This foundation will enable you to develop targeted strategies and track progress effectively.
• Prioritise Employee Wellbeing and Culture: Implement or enhance health and wellbeing programs, particularly for an ageing workforce and employees affected by long-term sickness. However, organisation culture and engagement play a crucial role here. Without fostering a supportive and inclusive culture, these changes will be difficult to implement. Work on building a culture that values employee wellbeing and actively engages staff to ensure these programs are successful.
• Stay Informed and Engage Stakeholders: Keep up-to-date with legislative developments and regularly update your team and stakeholders. Engage with business leaders, legal advisors, and employee representatives to understand the changes and prepare accordingly. This collaborative approach will ensure that your organisation is well-prepared and can effectively navigate the new legislative environment.

Alice: We must now wait for the detail of the Employment Rights Bill when it is published – and which is expected sooner rather than later, although at the latest, the government has reiterated its commitment to “introduce” the bill within its first 100 days and the text should therefore be laid before Parliament by 12 October 2024. However, it will then commence the parliamentary process through both houses and even when the bill becomes law, some provisions may still not become effective in practice until secondary legislation has been passed, together with any supporting codes of practice.  

The government has also stated that it will “work in close partnership with trade unions and business to deliver our New Deal and invite their views on how best we can put our plans into practice” and we wait to see how the government approaches this.

At this stage it is difficult therefore to predict when specific changes will come into force but we do expect Labour to prioritise its proposals in this area.  In the meantime, employers should start reviewing their policies and contractual terms which may be impacted and understand where changes may need to be made; with unfair dismissal potentially becoming a day one right for all workers, employers should be alert to the impact on performance issues within the business and consider whether the current use of probationary periods can be strengthened – Labour has indicated that its proposals will still enable employers to assess new hires using probationary periods.

We may see the proposed changes to the statutory national minimum wage implemented more quickly as these will only require implementation via secondary legislation. Employers will need to start factoring in the potential increase these changes will bring to their wage bill.

The draft Equality (Race and Disability) Bill is likely to be subject to extensive consultation and the government will need to give careful consideration as to how its proposals are set out in legislation, given the complexities highlighted by the previous government’s consultation on proposed ethnicity pay gap reporting and which ultimately concluded in a “voluntary” reporting approach to tackle ethnicity pay gaps, supported by government guidance. However, this is an area where employers can start looking at the data they will need for reporting on pay gaps around ethnicity and disability, and how they would approach a pay gap reporting exercise with a view to these reports becoming a legal requirement.

The government is already pushing ahead with its proposals around skills through which it seeks to ensure that workers have the right skills to meet future business needs; employers should look to maximise the advantages that these new training proposals bring. Another proposal of interest to employers will be the government’s focus on mental health support, particularly among the young and with sickness absence a significant cost for many businesses, employers should continue to prioritise measures for supporting the health and wellbeing of workers.