Labour promised a whole host of changes to employment law in their manifesto and a “new deal for working people”. Now that Sir Keir Starmer has taken the reins as Prime Minister, employers and HR professionals are left wondering: what do these proposals actually mean?
Read on for a helpful summary of some of the key changes proposed by Labour, as well as important points to take-away for your business.
Labour intends to make unfair dismissal, parental leave and sick pay “day one” rights – meaning that they will be available to workers from their first day on the job. We do not yet know which family friendly rights Labour intends to include in this change.
Legislation could be passed relatively swiftly for the changes to parental leave and sick pay, though the Government has promised to consult on all changes.
The Government will definitely want to consult before it removes the qualification period for unfair dismissal, and it is not yet clear how this right will work in conjunction with probationary periods. Although we anticipate that any new legislation will allow for dismissals during probationary periods, Labour has indicated that a fair and transparent process may still need to be followed.
Takeaway points: We would recommend that you review your recruitment processes to ensure that you have robust hiring processes in place and ensure that probationary periods are managed effectively. Employers may also want to introduce longer probationary periods. However, any new legislation may cap the length of probationary periods to prevent employers from abusing them. Once we have further details of the new rights relating to sick pay and parental leave, you will also need to review and update the relevant policies and procedures.
Labour wants to abolish the current three-tier system for employment status and replace it with a two-tier system, whereby individuals are either “workers” (which will most likely include those currently classed as employees and workers) or “self-employed”. The effect of this would be that all employment rights currently available to employees only would be available to anyone falling within the new category of “worker”. Labour has already acknowledged that this will not be a quick change and will require extensive consultation.
Takeaway points: You should audit your workforce in advance to help anticipate how the change to a single status of “worker” may impact your business.
There will not be an outright ban on the practice of dismissal and re-engagement, but Labour intends for this practice to only be available where there is genuinely no alternative and where a proper process is followed. These changes will impose greater obligations on employers to consult with employees and seek to prevent dismissals for failing to agree to a less favourable contract.
Takeaway points: We expect that the practical implication of any new legislation on “fire and rehire” will not be as drastic as Labour initially made out. The practice is already meant to be used as a last resort under The Code of Practice on Dismissal and Re-engagement, which is due to come into force on 18 July 2024. We expect that Labour will introduce a new “strengthened” Code of Practice and employers may be required to jump through more hoops before they can dismiss and re-engage staff.
Labour plans to ban “exploitative” zero-hour contracts and bring in a new right for workers to request a contract that reflects the hours regularly worked (by reference to a 12-week period). We currently have no details on whether there will be any guaranteed minimum hour requirements, or if there are grounds for employers to resist an average-hours contract.
Labour is also proposing to introduce a requirement for employers to compensate employees for any cancelled shifts (proportionate to the amount of notice given).
Takeaway points: You should audit your workforce to identify the proportion of those on zero-hour contracts and review how the 12-week average calculation would impact them. You may also need to review the processes you have in place for managing requests for work and cancelling shifts, in light of the proposed compensation scheme.
Currently, collective consultation is triggered where 20 or more employees are at risk of redundancy at one site within a 90-day period. Under Labour’s proposed changes, employers will have to undertake collective consultation where a defined threshold of employees at risk of redundancy is reached across the entire business, and not just at one site. Labour has not yet indicated what this threshold will be, but it could keep the existing threshold of 20 or more employees over 90 days.
Takeaway points: Multi-site employers will need to keep close track of proposed redundancy numbers between different sites.
As of 6 April 2024, employees have a right to request flexible working from “day one”. However, Labour intends to take this even further by making flexible working the default position from day one. This means that employers will be expected to accommodate flexible working requests, and can only refuse them where it is not reasonably feasible to implement them.
Labour also intends to introduce a “right to disconnect”, which would create a right for employees to switch off from work outside of their working hours. Labour has referred to Ireland and Belgium as potential models to base this on – these countries have much softer right to disconnect regulations than other European countries, such as France.
Takeaway points: It may become more difficult to refuse flexible working requests and, once we have further details of how the default right will operate, your policies will need to be reviewed and amended. The right to disconnect will likely require you to consult with staff and collaborate with them to create disconnect policies that benefit both parties.
Labour intends to increase the time limit for bringing Employment Tribunal claims from three months (which is the current time limit for most employment claims) to six months.
Takeaway points: We may see an increase in Employment Tribunal claims. However, on the other side of the coin, employers will have more time to try and settle potential claims before employees have to submit them to the Employment Tribunal.
Labour has said it intends to introduce legislation (likely in the form of a new Employment Rights Bill) in Parliament within 100 days of entering Government. However, this 100-day pledge does not mean that the legislation will be implemented or even passed by this date; it simply means that Labour is committed to starting the process of making these changes as quickly as it can.
Most of the significant changes Labour has proposed will require extensive consultation before they become law, and the effective dates for implementation may still be some time after any new legislation has been passed. We will therefore need to “watch this space” to see how the extensive proposals actually unfold!
Georgina Burrows comments: “Labour’s proposed changes are some of the most radical we have seen this century, and will enhance employment rights substantially. We do not know how firm the new legislation will be when it comes into force, but it’s safe to say there will be substantial changes under this new Labour Government. Employers should keep up to date as these proposals advance their way into law.”
If you have any questions on any of the upcoming changes, please contact a member of the team here.
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