AI at work - navigating opportunities and legal risks in the employment lifecycle
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Hong Kong employment law update: Abolition of set off, labour tribunal expectations and sexual harassment
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With a new Labour Government comes a raft of new employment laws announced in the King's Speech yesterday. Labour's plan is to "make work pay" by protecting and enhancing workers' rights, with a view to ultimately improving economic growth. This includes helping get people back into work after Covid, and introducing a new organisation called 'Skills England', which seeks to encourage cooperation between businesses, unions, training providers and the government with "employers at its heart".
Key legislation to be introduced includes a new Employment Rights Bill, and an Equality (Race and Disability) Bill to address racial pay inequality, both of which are summarised below. The living wage will increase and remove age bands where younger employees could be paid at lower hourly rates.
A new Employment Rights Bill is to be introduced to Parliament within the next 100 days, likely to come into force some time in 2025. The official briefing notes to the King's Speech 2024 provide more detail about what the Bill will include, which is largely consistent with Labour's manifesto:
Probably the most significant change, as anticipated by Labour's manifesto, is the introduction of protection against unfair dismissal as a day one right. If passed, it will mean that employees no longer require two years of continuous service to file an Employment Tribunal claim that they have been dismissed for an unfair reason or following an unfair dismissal process. The previous Labour government set one year as the relevant service period, and the Tories increased this to two years. By potentially reducing this to 'day one' or following a probation period, this will increase the onus on employers to follow fair processes and ensure they can rely on a legally fair reason prior to dismissal. It will also likely entitle employees with less than two years of service to statutory redundancy pay and to protection under TUPE. In contradiction to Labour's aims, this change may encourage employers to dismiss employees earlier if they have even low-level concerns about performance/conduct while an employee is still on probation and/or to engage employees on fixed term contracts instead of permanent contracts.
The briefing notes imply that the government will introduce some sort of provision or Code of Practice to deal with probationary periods, which should allow employers to still assess new hires and decide they aren't suitable for the job without risking an unfair dismissal claim. However, there may be new rules limiting the reasons why an employer can decide probation hasn't been passed. We await guidance on what this will look like and ultimately case law to clarify the new guidance.
Making flexible working the 'default' and requiring employers to accommodate this "as far is reasonable" is also likely to greatly increase the number of flexible working requests and limit the ability of employers to reject these requests.
The Government is committed to introducing the Bills within the first 100 days, however it will likely take some time to pass through Parliament. The change to the unfair dismissal service provision could be brought in quickly via statutory instrument without an Act of Parliament, in advance of the new Employment Rights Bill. Our advice is that given the lack of clarity on timing, employers should consider now whether there are any employees with less than two years' service whom they may wish to dismiss in the near future before the current service requirement is changed. It may also be sensible to increase the length of probation periods in contracts for new starters, although the guidance on probation periods may put barriers on lengthy probation periods.
When we have clarity on the new legislation, we will recommend that clients review their policies and procedures considering the proposed changes, particularly in relation to probation periods, parental leave and flexible working. Employers with 250+ employees should consider whether they currently capture the appropriate data to be able to meet the new ethnic and disability pay reporting practices.
If you would like advice in relation to any of the above, or would like to discuss your current employment practices, policies or procedures, please contact Paul Reeves (paul.reeves@shlegal.com), Richard Freedman (richard.freedman@shlegal.com) or Anne Pritam (anne.pritam@shlegal.com) or your usual contact in our employment team.
