Employment law: What changes will a new Labour Government make?

8th July 2024

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With the UK general election days away as I write this and opinion polls predicting a Labour victory, what will a change in government mean for employment law and employment rights in the UK?  At the time this article is published, there will almost certainly be a new Labour government, writes Alex Jones, Managing Director of 365 Employment Law.

Labour’s ‘Plan to Make Work Pay’ promises to deliver “the biggest upgrade to rights at work for a generation”. What are the key proposals and what will be their impact if enacted.

1. Reform of employment status to create a single status of ‘worker’ for anyone not genuinely self-employed

Currently, English law recognises three types of employment status: ‘employees’, ‘workers’ and ‘self-employed’. While employees have extensive statutory rights and protections, workers only benefit from a few (eg, right to holiday pay and a minimum wage) and self-employed do not benefit from any statutory protections.

The Labour Party plans to consult on creating a single status of worker for all but the genuinely self-employed. They hope this will clamp down on ‘bogus’ self-employment and create a simple framework for workers and employers.

The Labour Party also intends to “support and champion” the self-employed, entitling them to a written contract and ensuring they are covered by workplace health and safety and blacklisting protections.

2. Day one right to claim unfair dismissal

Employees currently need two years’ continuous service before being able to bring an unfair dismissal claim (subject to limited exceptions).

The Labour Party intends to ensure that eligible individuals can bring claims from day one of employment. This would not prevent employers from dismissing fairly or from using probationary periods with “fair and transparent rules and processes”, as a means by which to assess new employees.

Probationary periods will likely take on bigger significance although it is unclear whether Labour will legislate or create guidance on what reasonable use of probationary periods actually means.

3. Enhanced redundancy consultation requirements

Consultation is key to a fair redundancy dismissal, and employers are required to engage in collective consultation (and representatives) where there is a proposal to dismiss by redundancy 20 or more employees in one establishment within 90 days or fewer.

Labour has said it will strengthen redundancy rights and protections and ensure “the right to redundancy consultation is determined by the number of people impacted across the business rather than in one workplace”.

If implemented this will impact employers who operate across multiple sites and have been used to running small-scale redundancies without collective consultation.

4. Zero-hours contracts

Zero-hours contracts are a form of casual contract where employers do not guarantee a particular or minimum hours of work. There are restrictions to prevent those on zero-hours/minimum-hours contracts from working elsewhere, and the Workers (Predictable Terms and Conditions) Act 2023, was passed last year giving workers and agency workers the right to request more predictable terms and conditions. Regulations setting out the detail and a code of practice were expected by autumn 2024, but it is now unclear where the impending election leaves this.

The Labour Party wants to end what it deems “one-sided flexibility’ and ‘exploitative” contracts and provide security and predictability for workers. It intends to do this by banning zero-hours contracts and ensuring everyone has the right to a contract that reflects the number of hours they regularly work, based on a 12-week period. They intend to put anti-avoidance measures in place and ensure workers are compensated if working hours are cancelled or curtailed without adequate notice.

5. Enforcement of employment rights

The majority of employment rights are enforced through the Employment Tribunal, where most claims should be brought within three months (exceptions for statutory redundancy pay and equal pay, where employees have six months).

To take pressure off the overstretched ET system and allow quicker access to justice, Labour proposes to introduce a single enforcement body for workers’ rights for individuals to go for help. It is however unclear exactly what remit this body will have in terms of enforcement.

The Labour Party is also extending the time limit for bringing employment tribunal claims to six months and making it easier for workers to raise collective grievances through Acas.

In addition to the above points, Labour is also proposing day one rights to parental leave and sick pay; strengthened protection for workers subject to TUPE; a new right to bereavement leave; a removal of age brackets for minimum wage; making flexible working the default position; strengthened obligations around sexual harassment, including protection from third-party harassment and enhanced protection for whistleblowers of sexual harassment.

The Labour Party has indicated its intention to move quickly with these proposals, starting the legislative process within 100 days of entering government. However, employment law reform will be subject to full consultation and the legislative process, and on a timescale subject to government and parliamentary priorities. This means that some proposals may not go ahead at all or in the form currently set out.

Employers should always take advice at the earliest opportunity.

365 Employment Law Solicitors
Tel: 01903 863284