PwC comments on King's Speech - Employment Rights

John Harding, head of employment tax at PwC UK, said:

“As widely expected, under its "New Deal for Working People'' the Government has announced its intention to improve employment rights and wage standards. The implementation changes, including banning zero-hours and giving workers immediate access to rights such as protection against unfair dismissal, will need to be managed carefully and it will be important that the Government consults with business to avoid potential unintended consequences.

Extension of Employment Rights

“The extension of employment rights including parental leave, sick pay and protections from unfair dismissal from day one on the job had been trailed for some time. The Government is already listening to businesses who will welcome the commitment that this new measure will not interfere with the operation of probationary periods for new hires.

“It is proposed that workers will have the right to a contract that reflects the number of hours that they regularly work, which has previously been linked to a 12 week reference period. In addition, workers will receive reasonable notice for any changes in shifts or working hours, with compensation for any cancellations or curtailment. We await the details including how the 12 week reference period will be defined and the level of compensation deemed proportionate for changes in working hours. In the interim, businesses could review their scheduling systems to understand the extent to which they rely on workers being able to turn up or stand down at short notice as well as the extent to which workers are regularly required to work more than their contracted hours.

Equal Pay Protection Extension

“The proposed extension of equal pay protection to include race and disability is significant and the reference to a new regulatory and enforcement unit for equal pay suggests that this issue is likely to gain momentum. In order to keep pace businesses need to get under the skin of what is driving their pay gaps, take steps to address it and improve the collection of their diversity data as well as proactively check whether there is any risk of equal pay claims being brought.

Genuine Living Wage Introduction

“Over and above the new Employment Rights Bill the introduction of a 'Genuine Living Wage' for all adult workers signals an intention to increase take-home pay for working people. There will inevitably be challenges for those businesses that currently pay at or near the current Living Wage. The extent of the challenge will depend on how much higher than the current minimum wage the Low Pay Commission sets the new Genuine Living Wage. Given the focus on enforcement of Minimum Wage and workplace rights more generally by a newly created body called the “Fair Work Agency”, now is a key time for businesses to review their current compliance with the minimum wage, holiday pay and wider employment legislation.

Updates to Trade Union Legislation

“The Government has committed to update trade union legislation, removing unnecessary restrictions on trade union activity and simplifying the process of statutory recognition, introducing a regulated route to ensure workers and union members have a reasonable right to access a union within workplaces. Both unionised and non-unionised employers will need to consider how these changes may impact their industrial relations strategy. The Government has committed to update trade union legislation, removing unnecessary restrictions on trade union activity and simplifying the process of statutory recognition, introducing a regulated route to ensure workers and union members have a reasonable right to access a union within workplaces. Both unionised and non-unionised employers will need to consider how these changes may impact their industrial relations strategy.”