Unions Applaud King’s Speech; Employers Wary of New Regulations

Ardent Tide offers a quick summary of the King’s Speech and its potential impact on employers and businesses in the construction industry.

The King’s Speech has been well-received by unions but has raised concerns among employers. It supports union interests and leans towards state intervention in the workplace. The speech, featuring 40 Bills, reflects a preference for more government involvement and regulation. Additionally, there is the proposal for the renationalisation of part of the rail industry and the introduction of a state-owned electricity company. The speech was described as the beginning of a “patient rebuilding” to “fix the foundations” of Britain. Whether the increased role of the state in the construction industry is beneficial is up for debate.

Deputy Prime Minister Angela Rayner will oversee the implementation of an Employment Rights Bill aimed at banning exploitative zero-hours contracts and “fire and rehire” practices while establishing a Fair Work Agency to enforce employment rights. The bill will also repeal 2016 laws mandating minimum turnouts for strike ballots and compel more employers to recognise unions.

Key Measures of the Employment Rights Bill

1. Day 1 Employment Rights: Workers will gain entitlement to sick pay and protections from unfair dismissal from the first day on the job.
2. Ban on Zero-Hours Contracts: Ensuring workers have rights to a contract reflecting average hours worked and more security over shift scheduling.
3. Restrictions on “Fire and Rehire” Practices: Aiming to end exploitative employment practices.
4. Flexible Working Default: Employers must justify refusing requests for compressed hours or remote work.
5. Fair Work Agency: A new state enforcement agency to uphold employment rights.
6. Union Access: New rights for unions to access workplaces and other union-friendly reforms.

Single Status of Worker

Currently, employment law categorises individuals as employees, workers, or self-employed. The argument is that this system is overly complex and allows exploitation, denying many their rightful employment protections. To address this, a single status of worker is proposed to be distinct from the genuinely self-employed. This worker status would be entitled to full employment rights. Simplifying this system has merit, but there is concern it might unfairly target the genuinely self-employed and add more regulation and confusion to construction businesses and tradespeople. Previous attempts to simplify this area resulted in a bewildering array of legislation. The tinkering of IR35 is just one example of the results of this simplification, and the havoc that caused just shows how wrong things can go.

National Living Wage

In addition to these measures, the notes to the King’s Speech reaffirm the government’s commitments to the National Living Wage, linking it to the cost of living and removing the lower rate for 18- to 20-year-olds. These changes can be implemented relatively quickly outside of the Employment Rights Bill, with a cost-of-living-sensitive minimum wage likely to take effect in April 2025.

Other Reforms

The King’s Speech also promised reforms to the apprenticeship levy and the establishment of Skills England, aiming to enhance the nation’s skill development infrastructure.

Employer Concerns

Employers fear the costs associated with wider sick pay entitlements and a potential increase in tribunal claims. Despite these concerns, it is insisted that the Employment Rights Bill will be ready within 100 days, promising full consultation on the plans.

The approach aims to balance worker empowerment with business productivity, but we at Ardent Tide are wary of the increased costs and regulatory burden. The Employment Rights Bill, encompassing the New Deal for Working People and other key reforms, is set to be introduced by 12 October 2024.

At Ardent Tide, we are committed to helping our clients navigate these changes. Our expertise in employment and tax regulations ensures that your business remains compliant and protected. If you have any queries, please do not hesitate to call us. We are here to support you through these transitions and provide the necessary guidance to mitigate any potential challenges.

For more information and assistance, please contact Ardent Tide,  your trusted partner in workforce engagement and compliance. Their team is dedicated to helping businesses stay compliant and thrive in a changing regulatory landscape.