The new government has set out its priorities for the new parliament, which include an Employment Rights Bill, described as the biggest upgrade to workers’ rights in a generation. We set out below some of the key proposals which most impact employers in the Life Sciences space.
Unfair dismissal protection from first day of work
Currently, employees normally need a minimum of two years’ service before they may claim unfair dismissal. The new government plans to extend this protection to all workers from day one. This may encourage more workers to switch jobs, no longer inhibited by the loss of valuable unfair dismissal protection if they move. In the life sciences sector, which experiences chronic talent shortages, this may help to create a more fluid talent pool, which is associated with higher wages and productivity growth. There is concern, however, that making unfair dismissal a day one right may undermine greater diversity in the workforce, with employers preferring to recruit known candidates or those from similar backgrounds or traditional career pathways, instead of taking a chance on different types of candidates.
The government has confirmed that it will not prevent employers from operating probationary periods “with fair and transparent rules and processes”, but we await further details as to how this will apply in practice. It may be the case that employers will still be able to dismiss fairly during a probationary period following a truncated dismissal process, and possibly without needing to establish one of the five potentially fair reasons for dismissal under the current law, thereby mitigating any impact on the job market and recruitment trends.
Greater need to protect the business
If legislative changes are going to result in individuals moving between businesses more freely, employers will need to ensure that they adequately protect against anti-competitive risks to their business. Employers should review and strengthen restrictive covenants and other contractual provisions which seek to prevent former employees taking an unfair competitive advantage, such as confidential information, contacts or relationships, to another business. An employer may, for example, look to lengthen notice periods and utilise garden leave in the hope that knowledge and relationships will have weakened or pose less threat by the time the individual starts their new role. Businesses may also consider the greater use of long-term incentives to encourage loyalty and improve retention. We may see a renewed focus on workplace culture for the same reasons.
Departure from traditional employment models
Given the focus on skills demand, employers in the life sciences sector often engage their staff through a variety of employment models, including freelancers and self-employed consultants. During the election campaign, Labour made it clear that they intend to reclassify employment and worker status, to create a single “worker” status for all working people other than the genuinely self-employed. Creating a single worker status will substantially extend employment rights and protections to a far greater proportion of the workforce. The government also intends to restrict an employer’s use of more flexible working arrangements, such as zero-hours contracts. In view of this, employers may need to revisit existing employment models and adapt them according to the needs of their business and workforce.
Extending family friendly rights
The government has committed to making “parental leave” available from the first day of work. It is unclear whether the government is referring to the statutory right to take up to four weeks’ unpaid parental leave per year per child, entitlement to which currently requires at least one year’s service; or whether the government is referring to parental leave more generally, including paternity leave and shared parental leave, which both require 26 weeks’ service before the relevant qualifying week.
The government also intends to make flexible working the default position from the first day of employment, “with employers required to accommodate this as far as is reasonable”. There is currently no indication as to how this will be implemented in practice, and we expect that employers will still need some form of request and consultation procedure to identify and resolve pragmatic issues around working arrangements. At present, employers may only refuse a request to work flexibly for a limited number of reasons; it remains to be seen the extent to which the requirement to accommodate flexible working “as far as reasonable” extends employers’ existing obligations.
Like many employers in the UK, those in the life sciences sector wait with anticipation for the introduction of the Employment Rights Bill, to gain a greater understanding of how the new government intends to overhaul the existing employment regime.
Lloyd Davey