United Kingdom embarks on a reset of employment law

On 10 October, Keir Starmer’s Labour government unveiled its plans to reform employment law, by enhancing working conditions and redressing those aspects of current employment legislation that are most unfavourable to workers. These reforms, which were promised for the government’s first 100 days in office, include a bill (Employment Act Bill) and a policy paper (Next Steps to Make Work Pay), with a number of other measures that will be referred for consultation, such as the right to switch off and a ban on unpaid internships (see government press release). The policy paper also announces longer-term reforms in areas such as the parental leave system, which at present “does not support working parents”; paid leave for carers; regulating workplace surveillance technologies; revising the legislation covering transfers of undertakings (TUPE); improving occupational health and safety, in ways that include raising awareness of neurodiversity in the workplace and protecting workers who are exposed to extreme temperatures; and revising the system in place for handling public procurement contracts, so that social criteria can be taken into account and employment law requirements tightened.
At a personal level, the Employment Act Bill abolishes the requirements for a minimum qualifying period for paternity leave and parental leave. It announces a new entitlement to at least one week’s bereavement leave. The bill removes the four-day waiting period before sick pay becomes payable. It also provides greater protection against harassment, forcing the employer to take “all reasonable steps” to prevent sexual harassment in the workplace, and furthermore, makes employers responsible for tackling harassment perpetrated by third parties, on whatever grounds.
In the area of job security, the bill makes protection against unfair dismissal a right from day 1 of employment. In addition, drawing lessons from the scandal involving the ferry company P&O, the bill prohibits ‘fire and rehire’ dismissals, whereby a company dismisses employees who refuse to accept either less favourable working conditions or a pay cut, so that they can be replaced with cheaper labour. An exception is provided for if the company is at risk of bankruptcy. While not banning “zero-hours contracts” outright, the bill requires employers to offer a guaranteed number of working hours to those of their workers who have either a “low” number of guaranteed hours or no fixed hours.
At collective level, the bill provides for employee representatives to be consulted in connection with redundancies involving more than 20 people during a 90-day period, including for redundancies at several establishments owned by the same company. The new legislation also includes a number of amendments designed to facilitate access to trade unions in the workplace and to secure recognition, in ways that include reducing union affiliation thresholds, of their right to conduct collective bargaining. Moreover, it obliges employers to inform workers of their right to belong to a trade union, and it repeals the recent legislation restricting the right to strike, which “failed to prevent a single day of industrial action while in force”.
The government is thus attempting to engineer a reset of employment relationships. However, this will be a gradual process, as many of the measures will not come into force until 2026. In contrast to the fears aroused in connection with the post-Brexit period (see Brexit and labour standards), the government is distancing itself from the Conservatives’ plans to boost business competitiveness by opting for all-out deregulation and scrapping EU laws, in order to enhance the United Kingdom’s appeal in the eyes of investors. It is a relief to see that the Labour government is refusing to back such a policy, which would amount to “social dumping”.