What employment changes can employers expect under the Labour government?
Labour’s manifesto was clear that updating ‘outdated employment laws’ would be part of its approach to ‘kickstart economic growth’.
Since coming to power in July 2024, Labour has already introduced several new policies to protect employees, with more expected. This article sets out the changes already made, changes that are imminent, and an update on those that are expected later in Labour’s term.
Legislation - Already Introduced
As of 26 October 2024, employers have a new duty under the Worker Protection (Amendment of Equality Act 2010) Act 2023, to anticipate when sexual harassment may occur and take reasonable steps to prevent it. If sexual harassment has taken place, an employer should take action to stop it happening again.
Employers facing an allegation of sexual harassment will need to demonstrate the targeted measures that they have implemented to comply with this positive duty to protect employees from sexual harassment.
If any situation escalates to a potential claim, and the employee succeeds in their claim for sexual harassment, an Employment Tribunal will be required to consider whether the employer breached its duty to take reasonable steps to prevent sexual harassment and whether to uplift any award of compensation by up to 25%.
The current draft of the Employment Rights Bill (see Plan to Make Work Pay below), strengthens this requirement by amending legislation to require employers to take all reasonable steps to prevent sexual harassment in the workplace.
T-Levels
In a bid to increase the number of employers offering T-Level placements, the government has announced that from January 2025, students will be able to complete up to 20% of their placement hours remotely, rather than having to do them from a physical workplace, with the allowance increased to 50% for digital T-Levels.
Legislation Imminent
Plan to make work pay
Published on 10 October 2024 the Plan to Make Work Pay is now in committee stage at the House of Commons. Once passed, this will introduce the Employment Rights Bill and provisions in the bill will apply in England, Scotland and Wales. The plan sets out 28 policies including:
- introducing ‘day one’ rights to statutory sick pay (SSP), parental leave and protection against unfair dismissal (alongside a probationary period)
- banning ‘exploitative’ zero hours contracts
- making fire and re-hire possible only in very limited circumstances
- stronger flexible working rules
- stronger laws against workplace harassment including from third parties
- making it easier for trade unions to gain access to workplaces, secure statutory recognition, and take industrial action in the event of a dispute
- making SSP available to all employees and from the first day of sickness.
Consultations on some aspects of the proposal have already taken place, with more expected in spring 2025. Many reforms in the bill are unlikely to come into effect until 2026, however some measures may come in sooner.
Expected during this parliament
Equality, Race and Disability Bill
A draft Bill will be published during this parliamentary session. Based on the government’s priorities, the Bill will likely include:
- extending pay gap reporting to ethnicity and disability for employers with more than 250 staff
- extending equal pay rights to protect workers suffering discrimination on the basis of race or disability
- introducing measures to prevent employers outsourcing services to avoid paying equal pay.
Further reforms expected
A mixture of legislative and non-legislative measures are expected during Labour’s term. Implementation dates are unknown, but work has begun on several areas of potential reform which are linked to the Plan to Make Work Pay. The following measures are expected based on Labour’s manifesto:
- tightening the ban on unpaid internships, with a call for evidence expected imminently
- strengthening protections for the self-employed by tackling late payments under the new Fair Payment Code
- allowing the use of electronic balloting for trade union statutory ballots: full rollout will follow Royal Assent of the Employment Rights Bill
- introducing a ‘right to switch off’ through a statutory Code of Practice, which is likely to include the need for contracts to detail working hours. Publication of the draft Code is expected during the first quarter of 2025
- removing the age bands so that every adult worker is eligible for the national living wage
- reviewing the parental leave system
- consulting on workplace surveillance technologies
- strengthening protections for the self-employed through a right to written contract, extending blacklisting protections, and extending health and safety protections
- consulting on introducing single worker status
- consulting with Acas on enabling employees to collectively raise grievances about conduct in their place of work
- using public procurement to raise standards on employment rights: a new National Procurement Policy Statement is expected ahead of the commencement of the 2023 Procurement Act, in February 2025
- reviewing the implementation of Carer’s Leave and examining the benefits of introducing paid carers’ leave
- reviewing health and safety guidance and regulations
- a call for evidence on a variety of issues relating to Transfer of Undertakings (protection of employment) regulations (TUPE)
- extending the Freedom of Information Act to private companies that hold public contracts and to publicly funded employers.
Levy funding for Level 7 apprenticeships to be axed
The Education Secretary confirmed that the vast majority of, if not all, Level 7 apprenticeships will no longer be levy funded, to shift levy funding to younger learners.
Approved and awaiting implementation
Implementation of Lifelong Learning Entitlement delayed
The government has committed to delivering the Lifelong Learning Entitlement (LLE) but has postponed its launch by one year. The LLE will launch in September 2026 for learners studying courses starting on or after 1 January 2027. The scheme will, when launched, give students access to student loans to cover tuition and maintenance for higher education courses and higher technical qualifications between levels four and six.
UK Carbon Border Adjustment Mechanism (CBAM)
The UK Carbon Border Adjustment Mechanism (CBAM) will come into effect from 1 January 2027.
The UK CBAM will place a price on aluminium, cement, fertiliser, hydrogen, and iron and steel products imported into the UK.
The EU version of the CBAM is already in force and is currently in its transitional phase, ahead of a definitive regime being implemented from 2026.
Stallard Kane offer PCA members employment and health and safety services. Including an annual audit, Stallard Kane’s service helps keep members up to date with their responsibilities as an employer. For further information, contact Hannah Clarke.