Overview
A key component of Labour’s pre-election offering was a plan to rebalance employment rights in favour of workers and the unions that represent them. This was worked up over many years in opposition, with the final version (Labour’s Plan to Make Work Pay: Delivering A New Deal for Working People) being published during the general election campaign.
The Plan is wide-reaching and is likely to take several years to deliver in full. However, some key building blocks have already been put in place.
Making room for two employment bills
As widely expected, an Employment Rights Bill was included in the list of new bills announced in the King’s Speech on 17 July. This Bill will do much of the heavy lifting involved in implementing the Plan to Make Work Pay, including the following:
- Day one rights: Making protection against unfair dismissal a day one right, subject to provision for probationary periods
- Zero-hours contracts: Ensuring workers on these contracts get reasonable notice of any changes in shift and compensation for shifts cancelled
- Flexible working: Changing the current law so employers must accommodate flexible working requests “as far as is reasonable”, rather than being able to refuse them for broad business reasons
- Trade unions: Repealing legislation introduced by the last Conservative Government and simplifying the process of statutory recognition
The Government will also be publishing a draft Equality (Race and Disability) Bill which will “enshrine in law the full right to equal pay for ethnic minorities and disabled people” and introduce mandatory ethnicity and disability pay reporting. Announcing this as a draft Bill suggests that there will be a period of consultation before it is introduced to Parliament.
We will have to wait for these Bills to be published before being able to assess their impact and the likely implementation timetable. We do know, however, that the Government has promised to publish the Employment Rights Bill within its first 100 days in government – ie by mid-October.
Launching Skills England
0n 22 July the Government announced the launch of Skills England to “bring together the fractured skills landscape”. It will also have an important part to play in the roll out of the “Growth and Skills Levy”, the planned successor to the much-criticised Apprenticeship Levy.
Legislation (in the shape of the Skills England Bill) will be required to transfer functions from the Institute for Apprenticeships and Technical Education to Skills England. Unlike the other employment related bills announced in the King’s speech, this Bill will not apply to Wales or Scotland.
Skills England will work with national and local stakeholders (including Mayoral Combined Authorities) to identify skills gaps at a national and local level and to specify the training on which the Growth and Skills Levy can be spent. The plan is for levy-paying employers to have the flexibility to spend up to half of the money available to them from the reformed levy to train existing staff in "high-level technical skills”.
National Living Wage
As the title of their plan suggests, one important ambition of the Labour Government is to further narrow the gap between the National Living Wage (effectively the top rate of the National Minimum Wage, which currently applies to workers over 20) and the “real” living wage. The latter is a voluntary rate which takes the cost of living into account and is set each year by the Living Wage Foundation.
On 30 July the Government published a new remit for the Low Pay Commission, the body which is responsible for recommending the NMW rates each year. Up to now it has been asked to focus on labour market conditions when deciding what new hourly rates to put forward. But now, for the first time, it has also been asked to take into account the “cost of living, including the expected annual trends in inflation”.
It is widely expected that this will result in higher increases to the NLW than would have been the case had the LPC remit not been changed. In the longer term, the Government plans to lower the age threshold for entitlement to the NLW to 18. In the meantime, the LPC have been asked to seek to “continue to narrow the gap” between the NLW and the lower hourly NMW rate that applies to 18-20 year olds.
Conclusion
The Government plans for re-shaping employment rights still have a long way to go. But judging by the pace of change over the last few weeks, there will be plenty of new developments to watch out for as we move into the autumn.
For more information about all the developments mentioned in this article, please visit our employment blog here.
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