8th July 2024

Top 10 key employment proposals from the new Labour government

By Penny Hunt

It’s all change at No 10 and in Westminster with the arrival of a new government. Labour has pledged to introduce a huge number of employment law changes, and in its New Deal for Working People signalled its intent to introduce many of these changes within its first 100 days, sending a clear signal that strengthening employment rights is a key priority.

We have identified 10 key employment proposals you need to know:

  1. Day one rights – Unfair Dismissal and Parental Leave
    This proposes that employees will be granted unfair dismissal rights from day one of employment and has been one of the most headline-grabbing changes in Labour’s proposed employment reforms. While successive governments have tinkered with the length of the qualifying period, never before has it been dispensed with completely. Labour has said probationary periods may still be used, although there will be a requirement to follow a process prior to dismissing; however, it is not clear what that will look like. Will this lead to employers introducing longer probationary periods? Will this even be permitted? Parental leave to care for a child will also become a day one right.
  2. Single employment status
    Labour originally promised to introduce a single status of worker for everyone, except the genuinely self-employed, meaning that workers would also benefit from unfair dismissal rights as well as other protections only afforded to employees. Labour has instead said it will consult on how a simplified legal framework will work in practice, to properly differentiate between workers and the self-employed, which is welcome given its complex nature. There is also a commitment to look at the anti-avoidance measures used by some employers to avoid legal obligations, described as “bogus self-employment”.
  3. Fire and re-hire
    Labour has committed to ending the practice of dismissal and reengagement as a way of legally changing employees’ terms and conditions. While Labour has said such dismissals will still be permitted where they are necessary to save the business, how dire must circumstances be in order for employers to resort to this? That is going to need to be very clear to employers. If they do decide to proceed, employers will be required have a proper dialogue with employees (meaning consultation), prior to dismissing. Effective remedies against abuse are also promised, together with a beefed-up statutory code of practice. It’s not clear whether Labour will prevent the Code of Practice introduced by the previous government from coming into force on 18 July, or whether it will be replaced at a later date.
  4. Zero hours contracts
    Another high profile proposal was a ban on what Labour describes as “exploitative zero hours contracts”. This means a person who works regular hours for a reference period of at least 12 weeks would be entitled to a contract stating the regular hours they work. Workers would also be entitled to reasonable notice of changes in shifts or working hours. This proposal has since been diluted to enable workers to choose to stay on a zero hours contract, if that is their preference, subject to certain safeguards being put in place to avoid abuse.
  5. Improved collective bargaining rights
    There are significant changes proposed which will make things easier for trade unions, reversing, in many cases, changes in legislation introduced by the recent Conservative government. The process by which trade unions seek recognition will be simplified. We are already seeing an increase in recognition claims, and this trend now seems likely to continue. The higher thresholds introduced by the Conservative government in order to initiative lawful industrial action will also go, as will the minimum service level requirements imposed on certain employers.
  6. Flexible working
    Labour has made a significant number of family friendly proposals, including changes to the flexible working regime. Following changes in the law in April, the right to request flexible working is now a day one right, but Labour has stated its intention for it to be the default option, except where it is not genuinely feasible to do so. Employers are already seeing an increase in flexible working requests following the Covid pandemic and the recent changes in the law, and these proposals are likely to contribute significantly to the debate on persuading office-based staff who work from home to return to work in the office.
  7. Redundancy
    The rules on redundancy consultation will be overhauled so the obligation to consult collectively on redundancies will be triggered by reference to the number of employees affected across the employer’s business as a whole, rather than a single workplace. This, in effect, changes the “establishment” test decided in the Woolworths case. It represents a lowering of the bar for collective consultation for multi-site employers, meaning the obligation to collectively consult will be triggered more frequently. Such employers will in future need to factor in more time to implement redundancies.
  8. The Right to Disconnect
    Another initiative which has received a lot of press attention is the introduction of a new right to switch off, which would prevent employers from contacting their workers outside of working hours. Several European countries already have such schemes in place, but they are not all the same, so it remains to be seen whether the French, Belgian or Irish model will be adopted, or something altogether different.
  9. Prevention of Harassment
    We are expecting changes to the law on the prevention of harassment in October. Employers will be under a new duty to take reasonable steps to prevent sexual harassment at work. It’s not yet clear whether Labour will still implement this duty as currently drafted, but what we do know is that it is proposing to extend protection so that volunteers and interns are covered, and the obligation to prevent harassment by third parties, which was previously shelved, will be introduced.
  10. Employment Tribunal claims
    The time limit for bringing most employment tribunal claims will be extended from 3 to 6 months.

There are lots of other proposals too, with changes planned to the National Minimum Wage, Statutory Sick Pay and mandatory ethnicity and disability pay gap reporting for large employers. Unpaid internships will be outlawed except in limited circumstances and equal pay laws will be extended to protect disabled workers and those from ethnic minorities too, in the form of a new Race Equality Act.

While Labour is keen to introduce a whole draft of changes within the first 100 days (by mid-October), these proposals will not become law by this date. While some changes could be implemented fairly quickly, for example, removing the lower earnings limit on Statutory Sick Pay, others will require consultation before becoming law and will take significantly longer to be implemented. We may therefore have to wait until 2025 before we see significant legislative changes to employment law.

 

Our Employment team advises both employers and employees on all aspects of employment law, providing support and guidance on the full range of employment issues which arise during the employment life cycle, from recruitment through to redundancies, performance dismissals and executive exits. We can advise in more detail on any of the issues outlined above along with any other employment law needs. Please contact Penny Hunt, Head of our Employment practice, to see how we can help you.

Top 10 key employment proposals from the new Labour government

Have a question? Contact Penny

Have a question? Contact Penny

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