King’s speech: HR reacts to incoming changes

King Charles’ speech officially opened parliament under the new Labour government

King Charles’ speech yesterday (17 July) highlighted the legislative agenda of the new Labour government, which prioritises "making work pay”, stability, and sustainable economic growth. We asked HR leaders about the impact that the proposed laws would have on employers.

Employment law

The king said that the Labour government would introduce a new bill for working people, the Employment Rights Bill, which would “ban exploitative practices and enhance employment rights”. This would include an end to zero-hours contracts.

Full details about the bill have not been announced but it is likely to include the details outlined in Labour’s 'new deal for working people', according to Chris Rowley, professor emeritus of human resource management at Bayes Business School.

Speaking to HR magazine, he said: “Labour’s widely promised new deal for working people is a broad-ranging package dealing with many areas that have direct HR implications.

“These range from zero-hours contracts and fire and rehire practices, qualifying times for protections, and flexible working to collective bargaining. Of course, the devil is in the detail and enforcement is crucial.”

Labour promised it would implement its new deal within 100 days of forming a government.

Hannah Copeland, HR specialist at consultancy WorkNest, told HR magazine that employers should begin to plan for the proposed changes.

She said: “The announcements are likely to lead to further changes in what has already been an extremely significant year for change. Employers are already in the throes of implementing new policies and procedures to support the likes of carer's leave and amendments to flexible working regulations.

“HR will need to be at the very forefront of the proposed legislative changes and start to alert employees and all stakeholders about what is on the horizon. HR will also need to be looking at the impact of the proposed changes on their specific company or organisation. Communicating and planning will be key.”


Read more: Labour's manifesto: What HR needs to know


AI

Requirements are to be placed on people who are “working to develop the most powerful artificial intelligence models,” the king explained.

Legislation about artificial intelligence (AI) should be created in consultation with employers, to ensure that it does not stifle business, suggested Bukki Adedapo, international expansion lead for the freelance services platform Fiverr.

Speaking to HR magazine, he said: “Given the pace at which AI is evolving, guidance and legislation is undoubtedly important. However, the new AI bill must ensure that any new guardrails are not so stringent that they stifle innovation in HR and recruitment teams.

“The government’s new AI bill must ensure to strike the fine balance between safety and transparency, with AI’s clear potential and opportunity.”

 

Skills

The government announced the Skills England Bill, which would create a partnership between employers, unions and local authorities to “ensure the country has the highly trained workforce it needs”.

In its manifesto, Labour suggested that Skills England would ensure skills qualifications provided value for money.

Adepapo added that the government should encourage employers to invest in AI skills.

“Employers need to be consulted with any new bill that will directly impact workers so it was promising to hear that the development of Skills England will put employers at its heart. Putting policies in place that encourage upskilling, innovating and developing AI skills is crucial,” he said.  

“Data from Fiverr’s 2024 Future Workforce Index Report found that over 80% are willing to pay on average, a 45% higher wage for AI skills. However, over 40% of business leaders also say they cannot find the skills they need amongst full-time workers – with 96% seeking out freelancer and self-employed contractors.”

The king announced that the government would also reform the apprenticeships levy. The Labour party promised in its manifesto that it would replace the current levy system with a flexible growth and skills levy.

Labour would create a planning and infrastructure bill, the king explained, which would “pursue sustainable growth by encouraging investment in industry, skills and new technologies”.


Read more: Disabled people will work the rest of the year for free


Equality

The government would enshrine the full right to equal pay in law with its Draft Equality (Race and Disability) Bill.

This would introduce mandatory race and disability pay gap reporting for organisations with over 250 employees.

Harriet Walker, director of advisory and member services at responsible business network Business in the Community (BITC), welcomed the draft bill.

Speaking to HR magazine, she said: “The Draft Equality Bill is extremely welcomed, as BITC has been campaigning for mandatory ethnicity pay gap reporting for some time. As this requirement will mirror gender pay gap reporting, employers with over 250 employees will be familiar with the process but may not have the data they need to report.

“Engaging colleagues and capturing data so that employers can understand the demographics of their employees will be the first step in preparing for this new legislation.”

The CIPD found that, in the 12 months to February 2024, 40% of large employers had carried out an analysis of their ethnicity pay data, 35% had not, and a quarter did not know whether or not their ethnicity pay data had been recorded.

The same CIPD report revealed that 27% of large employers had conducted a disability pay report, 46% had not, and 28% did not know whether they had or not.

In October 2023 the pay gap between disabled and non-disabled workers was 14.6%, according to data from the Office for National Statistics (ONS).

Employers should begin preparing for the legislation now, commented David Regan, chair of the training committee at the Employment Lawyers’ Association, which represents more than 6,000 employment lawyers.

Regan told HR magazine: “The introduction of disability and ethnicity pay reporting will require careful thought from an employment and data privacy perspective given that this is likely to involve the collection of special category personal data (which requires further protection). 

“There will be consultation on these points, but the briefing notes make it clear that the government is committed to delivering its ‘New Deal for Working People’. As such, HR professionals should expect these proposals to proceed in full and should look to prepare accordingly.”

The king also said that the government would “break down barriers to opportunity” and take action to get people back in employment after the impact of the Covid-19 pandemic.

 

Pensions

The government also announced a Pension Scheme Bill, which would legislate on several areas of pension policy.

In its manifesto, the Labour party said it would retain the triple lock pension and reform pensions to provide better security in retirement.