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23 May 2022


What’s next for the UK’s long-awaited employment reforms?

Following the exclusion of the Employment Bill from the Queen’s Speech earlier this month, the Government has been accused of breaking its promises to improve workers’ rights. Here, our Head of Employment Law, Dan Wilde, examines what this means for the highly-anticipated legislative changes.

The UK Government has been promising to make huge improvements on employment law since the Employment Bill was originally announced in the Queen’s Speech back in 2019 yet three years on, employers and employees are still playing a waiting game. So when this year’s Queen’s Speech on 10 May failed to mention the long-promised Bill, there were widespread concerns that it had simply been shelved by the government.

So what was due to be in the Employment Bill?

The Bill was due to cover the following reforms:

  • Making flexible working the default. The Government had already proposed – and held consultation on – a more modest new right to request flexible working from day one, forming the backdrop to discussions about “new normal” working arrangements.
  • Extending redundancy protection for pregnancy and maternity. The Government has promised to extend priority for alternative employment opportunities on redundancy to all pregnant employees and for up to 6 months after return from maternity leave, with similar protections for parents returning from adoption or shared parental leave.
  • Leave for neonatal care.The Government has promised a new right to 12 weeks’ paid neonatal leave for parents whose babies spend time in neonatal care units. This legislation is due to go ahead but is not expected until 2023.
  • Leave for unpaid carers.The Government has proposed that working carers will be able to take up to 5 days’ unpaid carers leave each year to help them carry out their caring responsibilities.
  • Tips to go to workers in full. The Government’s proposed regulations governing how tips are to be distributed would require employers to pass on all tips and service charges to workers and ensure that tips are distributed on a fair and transparent basis, to be supported by a statutory Code of Practice.
  • The right to request a more predictable contract. The Government had been expected to introduce a new right for workers with variable hours to request a more stable and predictable contract after 26 weeks’ service and, possibly, new rights to reasonable notice of working hours and compensation for short-notice shift cancellation.
  • A single enforcement body. The Good Work Plan proposed a single labour market enforcement agency, with the intention to combine existing bodies, and expand this new body’s remit into the enforcement of statutory sick pay, holiday pay for vulnerable workers and the regulation of umbrella companies.

The one expected change that was announced was a ban on “exclusivity clauses” in contracts for low-paid workers. The day before the Queen’s Speech, the Government announced it would be widening the ban on exclusivity clauses for workers whose guaranteed income is £123 per week or below, allowing some 1.5 million workers to boost their income by working for multiple employers.

So what’s next for the anticipated reforms?

Responding to concerns about the omission of the Employment Bill from the Queen’s Speech, Kemi Badenoch, Minister for Levelling Up Communities, stated “the vast majority of legislation to improve workers’ rights does not need to come in a package entitled Employment Bill”. It was announced on 12 May that Matt Warman MP would be leading a review on the Future of Work as the government seeks to grow the economy after the COVID-19 pandemic.

The review will be conducted in two parts. The first phase will produce a high-level assessment of the key strategic issues and the second will provide a more detailed assessment of selected areas of focus.

The terms of reference suggest non-exhaustive key policy questions or challenges including the importance of place and local labour markets in creating and facilitating access to good jobs, the role of automation and how the “good” flexibility in the labour market and the gig economy can encourage productivity and growth, while ensuring sufficient protections are in place to prevent exploitative practices.

The review will be conducted over spring and summer 2022 before a written report, including recommendations to guide long-term, strategic policy making on the labour market, is submitted to the Prime Minister.

So what does all this mean for employers?

While waiting for the Employment Bill to become law over recent years, many employers have been left in limbo, unable to determine whether they needed to update their policies in readiness for any proposed legislative changes.

It seems that in the absence of legislation, the current tight labour market is generating change by itself with a lot of large corporate employers who are competing for talent having already put measures of their own in place rather than waiting for the government to mandate a change. However, many employers would welcome a level playing field on these issues and feel that the government should be taking the lead on employment rights.

Previously, a Government spokesperson had been quoted as saying: “We are committed to building a high skilled, high productivity, high wage economy that delivers on our ambition to make the UK the best place in the world to work. This includes ensuring workers’ rights are robustly protected while also fostering a dynamic and flexible labour market.” Let’s hope that the government will be true to their word and the Future Work Review will ensure that the promised reforms become a reality sooner rather than later.

Get in touch

Our employment law experts are able to offer specialist advice on a wide range of issues. For a confidential conversation, please contact Daniel Wilde on 01633 244233 or email wilded@hevans.com

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