With the new employment rights bill, tech hiring will face changes. New employment reforms aim to ensure fair treatment and proper classification of workers.
Labour announced they would introduce an employment bill within their first 100 days. The bill needs a House of Commons vote. In the meantime, hiring managers should work with HR to understand, adapt to, and follow potential legislative changes.
The new UK Employment Bill is introducing changes that will impact firms' hiring of tech staff:
Expanded worker protections
One change in tech hiring is the expansion of employment protections. The new legislation will protect tech workers from dismissal without reason. As a precaution, this could mean that recruiters take a longer approach to hiring. Tech hiring processes may become more rigorous to ensure new hires are the right fit, reducing the risk of unfair dismissal claims. Companies might opt to extend probations to mitigate risks with early termination.
IT contractors
Many tech professionals, including many IT contractors, like the flexibility of not being an employee. Many enjoy working on a ‘gig’ basis. If Labour’s Single Worker Status becomes government policy, there could be changes to working arrangements for IT contractors.
Currently, worker status is not determined solely by contractual arrangements. The working relationship is important. This includes the employer's degree of control and the contractor's autonomy. Labour’s policy plan aims to clarify worker status and ensure those who should have legal rights and protections, do have them. Organisations using external IT contractors and independent consultants must consider the Single Worker Status plan.
Outsourcing and TUPE
Rights and protections for workers transferred under TUPE are on the horizon (but the government has not said how). It also says it will bring insourcing of public services. This change prevents companies from using outsourcing to avoid paying equal pay. This could have an impact on the use of offshore IT support.
Apprenticeships
A body called Skills England will work in closer partnership with employers. The government plans to reform the Apprenticeship Levy. Tech apprenticeships support the tech skills shortage that costs the economy billions yearly. Digital apprenticeships can boost the tech talent pipeline. Changes could help employers train and develop junior IT professionals.
A flexible Growth and Skills Levy could enable businesses to use up to 50% of their levy to fund staff training. This could be through routes other than apprenticeships. Companies may use levy funds for a broader range of tech training to upskill current employees.
The right to switch off
The government intends to encourage dialogue between businesses and employees on this. It’s suggested that this will follow similar models to those in Ireland or Belgium. Tech roles often need out-of-hours and on-call work. Firms may need to develop new policies for their tech teams to respect employees' right to disconnect.
Pay reporting
The government plans to introduce new equality legislation and a draft equality bill. Claimants can bring equal pay claims based on race or disability pay in contract terms. There will be mandatory ethnicity and disability pay reporting. Employers with over 250 staff need to consider how they collect ethnicity and disability data. Companies may need to update their data collection and reporting systems to follow new legislation.
Flexible working and a four-day week
Flexible work is attractive in the tech industry. Tech employers need to update policies to manage requests within legal boundaries.
The viability of remote work continues to be a hot topic in tech. Some businesses allow employees to work where and when suits them. Conversely, RTO (return to office) mandates are increasing. Bigger tech employers, including Amazon, Google, and Dell, have scaled back workplace flexibility.
In April this year, the Employment Relations (Flexible Working) Bill 2023 was enacted. Workers, even those on their first day of a new job, could request flexible working. Employers aren’t legally required to grant flexible working. They must consider all requests and give reasons for refusal.
Workers will have new rights to demand a four-day week in a law planned for this autumn. The Telegraph reports that compressed hours could let employees work their contracted week’s hours in four days instead of five. The government expects to include this in the new workers' rights package.
Flexible work can attract and retain tech talent, but it has to work for the business. Hiring managers must think about how and when teams come together.
Redundancies, dismissal, and re-engagement
Tech companies often have to re-adjust to economic challenges and shifting market conditions. Recently, high-profile tech companies, including Amazon, Meta, X, Klarna, and Spotify have made mass redundancies. On the 18th of July, a new statutory Code of Practice on ‘dismissal and re-engagement’, came into effect. Courts and employment tribunals can increase employees' compensation by 25% if the employer does not follow best practices.
Companies must ensure compliance with the new code. This may involve revising contract terms for tech workers and consulting with staff ahead of changes. Firms may need to prepare for potential collective grievances. They'll need systems to address and manage group complaints.
Tech companies with many locations need robust systems to track redundancies to ensure compliance and avoid penalties.
Hiring regulations tighten
With the government's focus on reducing reliance on foreign employees, companies recruiting tech workers may have strict visa sponsorship rules. This could push firms to invest more in training local talent. Non-compliance may limit their ability to hire skilled non-EU migrants.
Non-EU migrants have been important in the UK tech workforce, especially after Brexit. The system favoured skilled non-EU workers over lower-skilled EU migrants. Subcontinent workers, in particular, are overrepresented in IT and high-skill roles like programming.
The government said it would improve training for an initial four sectors, including engineering and IT. These sectors would have a “workforce plan” drawn up by the relevant government department. It will detail how companies train staff and reduce reliance on overseas employees.
Companies that refuse to follow plans for training British workers could be blocked from sponsoring visas for overseas employees. The government could “refuse” companies from sponsoring work visas if they believed the employer was not doing enough. If ministers think a sector isn't engaging with the plan, jobs within that industry could be removed from the shortage occupation list.
Looking to the future
Tech hiring is set to evolve. New employment laws will expand worker protections and redefine workplace practices. It will impact hiring managers, talent acquisition teams, and already busy HR teams. Firms face increased complexity in managing compliance, flexible working policies, and worker protections. Partnering with NU Concept Solutions can assist the smooth adaptation to new regulations. We help reduce the burden on in-house teams and lighten the load. Contact us today. Email This email address is being protected from spambots. You need JavaScript enabled to view it. or call us on 0330 058 3400.