GOV.UK Construction Industry Scheme (CIS) Explained
By the Construction Industry Scheme (CIS), contractors deduct 20% from registered and 30% from unregistered subcontractors as advance tax payments.
Key Highlights
- Following the Labour Party victory in July 2024, significant changes are set to take effect, focusing on strengthening employee rights, including day-one protections and enhanced flexibility in work arrangements.
- Other Key changes proposed in the Employment Rights Bill include the right to request more predictable work patterns, robust safeguards against unfair dismissal, and measures to prevent sexual harassment at work.
- The new employment law reforms, such as the right to flexible working requests and extended redundancy protection for pregnant employees, were introduced under the Conservative government. Labour is building on these initiatives, adding further protections for workers.
UK Employment Law Changes Effective October 2024
General elections often serve as a referendum on crucial national issues, providing the winning party with a mandate to implement reforms in line with their manifesto. Following the Labour Government’s victory in July 2024, significant employment law changes are set to take effect this October, coinciding with the government’s first 100 days in office. This milestone underscores Labour’s dedication to enhancing worker rights and redefining employer obligations, aiming for a more progressive balance between employee protections and business responsibilities.
Insight
Several reforms highlighted in this article were introduced under the previous Tory government led by Rishi Sunak, indicating that employment rights have been a shared priority across the political spectrum. Labour is now building upon these earlier initiatives, further strengthening the conversation around worker protections, but with a renewed focus and emphasis on expanding employee rights.
Here are the employment laws recently introduced or proposed:
- Employment (Allocation of Tips) Act 2023 (Effective October 2024) This act prohibits employees from training on tips, gratuities, and service charges.
- Worker Protection (Amendment of Equality Act 2010) (Effective Date 26th October). The amendment legally obliges all UK employers to take reasonable steps to prevent sexual harassment in the workplace.
- Employment Rights Bill 2024 (published October 10, 2024) The bill introduces several reforms to strengthen workers’ rights, including enhanced protections against unfair dismissal, improved conditions for gig economy workers, and the right to request more predictable work patterns. The bill also reinforces flexible working rights, enabling employees to request flexible arrangements from day one.
These reforms represent a significant shift in employment law, reflecting the Labour Government’s drive to modernise the workplace and provide stronger protections for employees across the UK.
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New Labour Government Employment Rights Bill
The new UK government has introduced a range of amendments to enhance employee rights under the Employment Rights Bill, which is expected to come into force in 2025. According to the party, employment laws have struggled to keep up with the changing nature of work and the growing need to support a better work-life balance.
The following are the main provisions of the bill:
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Day one rights for right to claim unfair dismissal
Day one rights for unfair dismissal, meaning that employees do not have to wait for a two-year qualifying period to enjoy protection from unfair dismissal unless it falls under the automatic unfair dismissal. However, employers can dismiss the employee for specific reasons during an initial period of employment (effectively a statutory probationary period), which has yet to be defined. Even then, the employer gives notice to terminate the employment before the end of the initial period. The effective date of dismissal is within three months after the end of the initial period.
Insight
A major aspect of the bill is the introduction of day one rights. Previously, employees had to wait a specific period to qualify for certain benefits and accommodations. Under the new bill, however, employees are entitled to benefits such as protection against unfair dismissal and statutory sick pay from the first day of illness from their first day on the job, providing immediate protections and rights.
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Zero hour contracts
In the UK, employers can offer zero-hour contracts, where employees have no guaranteed minimum working hours. This arrangement is commonly used in industries with fluctuating demand, such as retail and hospitality. However, under the new bill, workers on zero-hour contracts who consistently put in more time than contracted will have the right to request a guaranteed-hours contract. This will be based on the average hours worked over a 12-week reference period, giving employees more stability and predictability in their working hours.
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Statutory sick pay
According to the bill, employees will have a universal entitlement to sick pay from the first day of illness, removing the current three-day waiting period. Furthermore, the minimum earnings threshold of £123 per week will be eliminated, allowing even low-paid workers who earn below this amount to qualify for SSP, albeit at a lower rate.
Insight
Labour has pledged to tackle additional issues not fully addressed in the current bill but are part of their broader ‘New Deal for Working People’. This includes legislation to end pay discrimination, such as closing the disability pay gap and addressing ethnic wage disparities. They also plan to introduce the right to disconnect from work outside their contracted hours, except in extraordinary circumstances, promoting a healthier work-life balance.
Pro-active Duty to Prevent Sexual Harassment at Work (Effective 26th October 2024)
Initiated by the conservative government, the Worker Protection (Amendment of Equality Act 2010) Act 2023 introduces a proactive duty for all UK employers to prevent sexual harassment in the workplace. This duty applies to all employers, regardless of size or sector, and extends beyond workplace harassment by colleagues to include third-party harassment from customers, clients, and visitors.
Employers are required to assess potential risks, including those in offsite environments like conferences, and implement policies and procedures to mitigate these risks. Additionally, they must establish precise reporting mechanisms, ensuring incidents can be reported confidentially and addressed promptly.
The Equality and Human Rights Commission (EHRC) has been granted enforcement powers, enabling it to investigate employers for compliance. If a breach is identified, the EHRC can find that an organisation has committed an unlawful act and issue a notice to confirm its findings. The organisation will then be required to prepare an action plan to address and prevent future breaches.
EHRC can also enter into a legally binding agreement with the employer to prevent further violations or seek a court injunction to stop the employer’s unlawful actions.
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New Rules Around Flexible Working Requests (Effective April 2024)
Enacted under the conservative party, new employees got the right to request flexible working conditions from their first day on the job, eliminating the previous requirement of 26 weeks of service. Additionally, employees can now make up to two flexible working requests per year, compared to the previous limit of one. The process has been further simplified by removing the requirement for employees to explain the impact of their requests, making it more streamlined and employee-friendly. Employers are required to respond to these requests within two months unless there are exceptional circumstances, ensuring a faster and more responsive process.
Statutory Code of Practice on “Fire and Rehire”
Commonly referred to as dismissal and re-engagement, “fire and rehire” is a controversial practice in which employers terminate employees and rehire them under new terms that are often more favourable to the employer. The new Statutory Code of Practice guides handling such situations, which courts and employment tribunals must consider when assessing related cases.
The Code builds on existing legal obligations, such as the requirement for collective redundancy consultations when the number of affected employees meets the threshold. It stresses that “fire and rehire” should only be used as a last resort after exploring all other options.
The Code emphasises the importance of clear communication and transparency during changing terms and conditions. Employers are encouraged to engage with employees or their representatives as early as possible, provide detailed information, and consult adequately to explore alternative solutions before resorting to dismissal and re-engagement.
Insight
The Employment Rights Bill by the new government revisits the issue of fire and rehire and makes it automatically unfair for an employer to dismiss an employee for refusing changes to their employment contract or dismissing the employee intending to rehire them or someone else under a new contract with substantially the same duties.
Extended Legal Protection from Redundancy for Pregnant Staff (Effective April 2024)
Initially introduced by the Conservative government, this amendment on the Protection from Redundancy (Pregnancy and Family Leave) Act 2023 provides extended protection against redundancy for employees from the moment they inform their employer of their pregnancy. This protection now lasts until 18 months after the expected week of childbirth, the actual birth date, or the date of adoption for those returning from maternity leave, shared parental leave, or adoption leave. Previously, redundancy protections primarily applied to those on maternity leave, excluding individuals on shared parental or adoption leave. This extension ensures broader security for all new parents, reflecting a more inclusive approach to family rights in the workplace.
New Law Provides More Flexibility for Paternity Leave
The new legislation allows fathers to take paternity leave in more flexible options, either in two separate one-week blocks or as a continuous two-week leave within the first 52 weeks of their child’s life (birth or adoption). Additionally, the required notice period has been reduced from 15 weeks to just 28 days before the expected birth, making it easier for fathers to plan their leave around the arrival of their child.
Insight
The Carer’s Leave Act 2023 came into force on 6 April 2024 and gave employees who have a dependant with long-term care a statutory right to one week’s unpaid care leave per year.
2024 UK Employment Law Changes
Excellent article! It was worth noting these employment law changes for my own accounting solutions business.