The nation awoke this morning to the news that the UK will have a Labour government for the first time in 14 years, after the party secured a significant number of seats overnight.
The Labour Party succeeded on the back of a manifesto which pledged, among other things, to introduce legislation reforming employment law within 100 days of entering office.
As a result, many employers are likely to have questions about what this new government will mean for their business, so keep reading to learn more about the proposals within Labour’s Plan to Make Work Pay: Delivering a New Deal for Working People (the “New Deal”).
Day one rights
The New Deal states that “basic day one rights” will be introduced to provide workers with rights of parental leave, statutory sick pay and protection against unfair dismissal.
It is reported that the removal of the unfair dismissal qualifying period will not prevent fair dismissal, and which will include dismissal for reasons of capability, conduct or redundancy, or during probationary periods following fair and transparent processes.
Flexible working
It is expected that a Labour government will build on the changes introduced on 6 April 2024, by way of the Flexible Working (Amendment) Regulations 2023, which provided employees with the legal right to request flexible working from day one.
Employment status
The Labour Party has set out their intention to move towards a single status “worker” and transition towards a two-part framework for employment status. It seems the Taylor review of modern working practices has been considered and the Labour Party will seek to create a single status of “worker” for all but the genuinely self-employed. This will replace the current three-tier structure of employment status.
According to the New Deal, all individuals with “worker” status would be given the same legal rights and protections.
Dismissal and re-engagement
You may have heard the concept of “fire and re-hire”, which is a term used when referring to a scenario where an employer dismisses an employee on full notice and then offers them an immediate new contract of employment on new, and often less favourable, terms.
The New Deal sets out the Labour Party’s commitment to “end the scourges” of controversial dismissal tactics by seeking to reform the law to provide effective remedies against abuse and a strengthened statutory Code of Practice will replace the previous government’s statutory Code of Practice that was expected to come into force on 18 July 2024.
As of yet, this new Labour government has not confirmed whether it would prevent that Code of Practice from coming into force that was initiated by the previous government.
“Fair pay”
The New Deal set out the Labour Party’s vision of “fair pay” which consists of:
- making sure the minimum wage is a “real living wage that people can live on”.
- “strengthen the law to ensure hospitality workers receive their tips in full and workers decide how tips are allocated”. The previous government introduced the Employment (Allocation of Tips) Act 2023 and provided a draft statutory Code of Practice, but recently delayed its implementation to 1 October 2024. The New Deal does not explicitly confirm whether a Labour government will bring into force the remaining provisions of that new legislation.
- banning unpaid internships, except as part of an education or training course.
- “fixing” adult social care by establishing a “Fair Pay Agreement” in the adult social care sector and empowering workers, and the trade unions that represent them, to negotiate fair pay and conditions. It is expected that the Labour Party will publish a full and transparent review of the Fair Pay Agreement.
- increasing the level of statutory sick pay (“SSP”), removing the lower earnings limit so that SSP is available to all workers, including the self-employed, and removing the current three-day waiting period.
Shifting the balance of power
The Labour Party has outlined their commitment to “Securonomics”, a term coined by the expected new Chancellor of the Exchequer, Rachel Reeves, to refer to her version of the economic policy that the Labour Party is expected to adhere to.
From an employment law perspective, the New Deal intends to “give working people security in their day-to-day lives” and this involves ending what the Labour Party views as “one-sided flexibility”.
According to the New Deal, a Labour government will seek to achieve this by, amongst other things, banning what is deemed to be “exploitative” zero hours contracts. The Labour Party has also indicated that they would ensure that workers have the right to a contract that reflects the number of hours they regularly work, based on a twelve week reference period and reasonable notice of any change in shifts or working time, with compensation that is proportionate to the notice given for any shifts cancelled or curtailed.
The provisions of Workers (Predictable Terms and Conditions) Act 2023 that were initiated by the previous Government were expected to come into force around September 2024 and it remains unclear, at this stage, whether a Labour government would implement those provisions.
“Right to switch off”
The New Deal has expressed concerns about work-life balance, particularly as there has been a wide-spread shift towards remote working in recent years.
We may expect a Labour government to introduce the right for workers to disconnect from work outside of working hours and not be contacted by their employer.
For families
The New Deal outlines that a Labour government will bring about “family-friendly” rights by implementing the following:
- ensuring that parental leave will become a day one right.
- making it unlawful to dismiss a woman during pregnancy or within six months of her return to work, except in specific circumstances.
- introducing the right to bereavement leave for all workers.
A Labour government is also expected to review the provisions of the Carer’s Leave Act 2023 that came into force on 6 April 2024, which aims to better support unpaid carers to remain in work alongside their unpaid caring responsibilities.
The Carer’s Leave Act 2023 already provides an employee who is providing or arranging care for someone with a long-term care need with an entitlement to take unpaid carer’s leave and this right is available from the first day of employment and applies to full-time and part-time employees.
Discrimination and diversity, equity and inclusion (“DEI”)
There are a number of commitments set out in the New Deal in the areas of discrimination and DEI, certain of which are, as follows:
Equalities representatives
- trade union equalities representatives would be provided with statutory rights to ensure they have adequate time to support colleagues facing inequality or discrimination.
Equal pay
- putting in place measures to ensure that outsourcing of services can no longer be used by employers to avoid paying equal pay, including for work of equal value.
- Equality impact assessments for public sector bodies will be strengthened.
- introducing ethnicity and disability pay gap reporting will be mandatory for employers with more than 250 staff.
- large employers will be expected to devise and implement plans to eradicate pay gay inequalities.
Menopause action plans
Menopause action plans will be expected for large employers with more than 250 employees, setting out how they will support employees through the menopause.
Gender recognition
The New Deal outlines that a Labour government would “modernise” gender recognition law and is expected to continue to support the implementation of the single-sex exceptions in the Equality Act 2010.
Employment tribunal proceedings
The New Deal confirms that the time limit to bring an employment tribunal claim will be increased from three to six months.
Single enforcement body (“SEB”)
As set out in the New Deal, a SEB will be established to enforce workers’ rights. This concept seems to draw largely on the outcomes of the consultation paper “Good Work Plan: establishing a new single enforcement body for employment rights” that was published in July 2019, with the consultation period closing on 6 October 2019, under the previous government.
The responses to that consultation suggested an opportunity to deliver more effective enforcement of employment rights for vulnerable workers.
The New Deal suggests that a SEB will be equipped with strong powers to inspect workplaces and take against exploitation and will have the power to bring criminal and civil proceedings on behalf of workers in respect of:
- Health and safety.
- National Minimum Wage infringements.
- “Worker exploitation”.
Transfer of Undertakings (Protection of Employment) (“TUPE”)
Quite simply, the New Deal sets out that a Labour Government would “strengthen the existing statutory rights and protections for workers subject to TUPE processes”.
Trade unions
The Labour Party has indicated an intention to repeal the Trade Union Act (2016) and the Strikes (Minimum Service Levels) Act (2023).
The role of trade unions in industrial relations will be significantly enhanced as the New Deal proposes to:
- ease balloting requirements for industrial action by permitting trade unions to use secure and private electronic balloting when engaging, communicating with and polling members.
- simplify the statutory recognition process by removing the requirement for a union to show that at least 50% of workers are likely to support recognition for the process to begin and modernise the rules governing the final ballot in which workers vote on whether to recognise a trade union, requiring unions to gain a simple majority.
A Labour government is also expected to introduce a new duty on employers to inform all new employees of their right to join a union and to remind all staff of this on a regular basis.
Our employment team will be posting updates on these areas as the proposals develop under the new Labour government.
For employment law advice, or if you have questions on how these proposals may affect your business, please contact either partner Nick Smith on nsmith@mincoffs.co.uk or solicitor Laura Liddle on lliddle@mincoffs.co.uk.
