UK Employment Law Coffee Break: Employment law reform, webinars and our latest HR Pensions spotlight

Employment law reform 

There have been a number of developments this week in relation to the government's proposed reforms to employment law, including the Regulatory Policy Committee's review of the government's "impact assessments" for the Employment Rights Bill, publication of a list of amendments tabled to the bill, and publication of the government's "Get Britain Working" white paper.

Regulatory Policy Committee reviews government's 'impact assessments' 

The Regulatory Policy Committee (RPC), an independent scrutineer of government policy, has issued an opinion in which it has reviewed the impact assessments for the Employment Rights Bill and assessed eight of the 23 as "not fit for purpose". 

Six of these (including day one unfair dismissal rights, flexible working, employer liability for third-party workplace harassment and reforms around trade union legislation) are in the "highest impact" measure category, with the RPC determining the government has identified insufficient reasons for introducing the legislation. 

Its overall assessment for the bill's impact assessments is "not fit for purpose". 

Given the number and reach of the measures, the RPC recommends that it would be proportionate to undertake labour market and broader macroeconomic analysis, to understand the overall impact on employment, wages and output, and, particularly, the pass-through of employer costs to employees. 

The government may well seek to tackle these concerns in specific consultations on particular reforms which it has already indicated will take place as part of the bill's journey through the legislative process. 

Proposed amendments to the Employment Rights Bill 

A paper has also been published this week listing amendments tabled to the bill. Amendments proposed by the government include:

• A new power which increases the time limit for bringing employment tribunal claims (listed in a new schedule) from three to six months.
• Inclusion of wording to provide that the initial period of employment to be determined by regulations is not less than three months and not more than nine months from the day on which the employee starts work.
• A power for the secretary of state to specify the maximum amount of the compensatory award where an Employment Tribunal finds that an employee has been unfairly dismissed during the initial period of employment.
• Adding menstrual problems and menstrual disorders as “matters related to gender equality” (along with gender pay and menopause) and on which employers may be required to produce equality action plans.
• Amendments to some of the proposals relating to zero hours and low hours workers. 

The bill is now in the Public Committee stage, which is currently hearing evidence from a range of interested parties and is set to report to the House of Commons by 21 January 2025 at the latest. 

Get Britain Working white paper 

The government has now published its "Get Britain Working" white paper, This white paper's stated intention is to reform employment, health and skills support to tackle rising economic inactivity levels, support people into good work, and create an inclusive labour market in which everybody can participate and progress in work. 

It highlights the significant concerns around long-term sickness-related economic inactivity and states that this is now at a "near record high". A quarter of all people aged 16 to 64 have a long-term health condition that limits their day-today activity. The paper notes a "concerning" trend in respect of young people where there is a greater proportional increase in a health condition that is work-limiting in comparison to older groups. Those who are aged 16 to 34 account for 22.6% of those who are economically inactive due to ill health. 

The key proposals relate to:

• Scaling up and deepening the contribution of the NHS and wider health system to improve employment outcomes.
• Backing local areas to shape an effective work, health and skills offer for local people, with mayoral authorities leading the way in England.
• Delivering a Youth Guarantee so that all 18 to 21-year-olds in England have access to education, training or help to find a job or an apprenticeship.
• Creating a new jobs and careers service to help people get into work and get on at work.
• Launching an independent review into the role of UK employers in promoting healthy and inclusive workplaces. 

The review into the role of UK employers in promoting healthy and inclusive workplaces will consider what more can be done to enable employers to increase the recruitment and retention of disabled people and those with a health condition. This includes via the new jobs and careers service; preventing people becoming unwell at work and promoting good, healthy workplaces; and undertaking early intervention for sickness absence and increase returns to work. 

This review will run until next summer and the government has stated that it will involve "wide-ranging engagement with employers, employees, trade unions, health experts, and disabled people and those with health conditions". It is intended to "complement the government’s Make Work Pay reforms, which will tackle job insecurity and expand flexible working". 

In-house lawyer webinar on employment law reforms

Our annual In-House Lawyer event took place this week, with Emma Wills Davies, Lara Fatemi and Siobhan Murphy from our Employment team speaking about the Employment Rights Bill, what the new employee rights mean for your organisation and how to plan for the changes. They also addressed the other reforms the government has committed to in its "Next Steps" paper, which are being progressed in parallel with the bill. If you missed the webinar, you can catch-up. 

Employment Partner, Olivia Sinfield, also spoke at the event with colleagues from our Advisory team in a session looking at the UK employment, tax, immigration and pensions implications of increased global mobility intra-group and the high-level issues to be considered by UK in-house lawyers in global organisations when dealing with a mobile workforce. View the recording. 

HR pensions spotlight for November: why employers need to act now on changes announced at UK Budget and in the Mansion House speech 

In what represents a fundamental change of position, the chancellor announced as part of the UK Budget that, from April 2027, lump sum death benefits and any unused defined contribution (DC) pension savings will form part of an individual's estate for inheritance tax purposes. In our HR pensions spotlight: what do pensions changes in the UK Budget mean for employers?, we assess the impact of this change on the different types of pension and lump sum death-in-service scheme and suggest actions for employers to take. We also consider how introducing, extending or reviewing any arrangement to share the costs savings of salary sacrifice could help to offset the April 2025 increase in employer national insurance contributions. 

The chancellor unveiled further reforms to DC pensions in her Mansion House speech. In our Insight, UK chancellor unveils reforms to 'prime' UK pensions to boost growth, we consider some of the ways that the proposed changes could affect employers and explain why employers might like to respond to the relevant consultation before it closes on 16 January 2025. 

We will be running a 30 minute webinar on these changes at 11am on 11 December 2024. If you would like to join that webinar, or to discuss these changes, please contact Claire Rankin (Pensions Partner) or your usual Osborne Clarke contact.