Radical changes to employment law legislation anticipated this autumn

On Wednesday 17 July 2024, the first King's Speech of the new Labour Government promised to make radical changes to UK employment law. In the 100 days that follow the speech, we expect such changes to undoubtedly impact Holiday and Residential Parks who employ staff. Whether employed permanently or casually, park workforces stand to gain significantly, following the election.

What is being proposed?

The introduction of a new Employment Rights Bill (the Bill) has been proposed. The Bill is designed to implement Labour’s ‘Plan to Make Work Pay: Delivering A New Deal for Working People’. The key features of the Bill include:

• Day one rights: The right to parental leave and sick pay will become rights available to all employees from the first day of employment, as will the right to claim unfair dismissal (with allowances for probationary periods). The Labour Government previously indicated in its manifesto that it would extend these rights to all workers, not just employees, and create a single status of 'worker' for everyone, except the genuinely self-employed. Time will tell whether this materialises, but the impact is potentially drastic.
• Minimum wage: The existing age bands will be removed that apply to 18 to 20 year-olds.
• Zero-hours contract ban: ‘Exploitative’ zero-hours contracts will be banned to ensure that workers have a right to a contract that reflects the hours they regularly work.
• Statutory sick pay: The lower earnings limit and waiting period will be removed. This will result in staff being entitled to statutory sick pay from the first day of sickness absence.
• Flexible working by default: This will become a ‘default’ right from day one of employment, with employers being required to accommodate flexibility insofar as is reasonable.
• Enhanced protections for mothers: The period during which pregnant women and new mothers will be protected from discrimination and redundancy will be extended to 18 months after the estimated week of childbirth.
• Banning 'fire and rehire': Employers will be prohibited from dismissing and rehiring employees under less favourable terms, when changing terms and conditions.
• Collective redundancy consultation: Employers will need to count all staff across all locations when assessing whether the trigger point for collective consultation has been reached.
• Trade unions: The law on minimum service levels in relation to industrial action (which was introduced by the previous government) will be repealed. The process of statutory recognition for trade unions will be simplified. A new right will be introduced for workers and union members to access a union within workplaces.
• Enforcement: A new body called the Fair Work Agency with extensive powers to inspect workplaces and enforce compliance with employment laws will be established.

In addition to the Bill, the Labour Government will also introduce the Equality (Race and Disability) Bill, which will provide for mandatory ethnicity and disability pay reporting for larger employers and enshrine in law the right to equal pay for ethnic minorities and disabled people.

The Labour Government has promised to present the new legislation to Parliament on or before 13 October 2024. It is not yet known when the changes will be in effect.

How can Holiday and Residential Parks prepare for the upcoming changes?

Whilst the devil will be in the details, these proposals reflect a significant shift in UK employment law and park owners will need to ensure that they keep up with developments as these (broad) proposals are converted into pro employee legislation.

Park owners should:

1. Review current employment contracts and practices. Given that one of the key changes is the banning of “exploitative” zero-hour contracts, park owners should review their existing arrangements with their casual staff and ensure they have contracts in place that reflect the number of hours that they regularly work.
2. Review recruitment, capability and disciplinary processes. Given the proposal to afford protection from unfair dismissal to all forms of workers from day one, park owners will find it increasingly difficult to appoint and remove staff from their workforces. There may become a far greater focus on references and meticulous due diligence, before offering roles. Probationary periods (depending on how they are framed in the future) will hopefully become a more useful tool to mitigate risk and ensure candidates are the best fit. Park owners should review their existing approach to managing new starters from day one, ensuring that they have in place probationary periods, assessment criteria, and robust ACAS Code compliant performance management and disciplinary processes.
3. Monitor legislative developments and obtain legal advice before dismissing staff or engaging any new starters, in case new rules have come into play. As stated above, we are still awaiting guidance on how the Bill will apply in practice, and so there may be changes to the proposed legislation as it passes through Parliament. The Bill will inevitably lead to a colossal increase in Employment Tribunal claims (where the Tribunal system is already under strain) and therefore it is extremely important for park owners to ensure their understanding of these key changes and anticipate necessary changes to safeguard their businesses.

Considering that a professionally litigated Employment Tribunal claim can cost in the region of £15,000 plus VAT to defend, before the Employment Tribunal makes any award to the Claimant, it is insensible for parks to overlook these changes or fail to take precautionary measures as new rights are introduced, with 100 days’ notice or more.