Following Labour’s victory last week, our attention has swiftly turned to their “Plan to Make Work Pay: Delivering a New Deal for Working People” and the significant proposed changes to employment law.
Whilst we await the precise details (and wait to see if Labour pulls back in relation to any of its proposals), it is clear that we will see a seismic shift in employment law within a relatively short period, as Labour has pledged to introduce legislation in Parliament within 100 days of entering government (although it will then need to go through the usual parliamentary process).
The top ten changes we think businesses should get ready for are:
- Day One Employment Rights: Perhaps the biggest proposed change sees basic rights such as unfair dismissal protection, parental leave and sick pay applying to all employees from the first day of employment.
- Statutory Sick Pay and National Minimum Wage: Labour is proposing to “move quickly” on: removing the lower earnings limit on statutory sick pay to make it available to all workers; and adjusting the minimum wage to reflect the cost of living and to the remove "discriminatory" age bands to ensure that every adults worker benefits.
- Ban on "exploitative" zero hours contracts: Whilst zero hours contracts will not be banned, Labour aims to end "one-sided flexibility" and to ensure that workers are entitled to contracts that reflect their regular hours worked over a twelve-week period.
- Fire and Rehire Practices: Labour plans to tighten restrictions on the practice of firing employees and then re-engaging them on reduced terms and conditions. This practice will still be permitted, e.g. in restructuring scenarios where there is genuinely no alternative, but businesses will have to follow a “proper process” in accordance with a strengthened code of practice and there will be “effective remedies against abuse”.
- Strengthening Trade Unions: Labour plans to enhance trade union rights, including simplifying the process of trade union recognition, stronger rights of access to workplaces for trade union representatives and a possible repeal of the “minimum service levels” introduced by the Conservatives to ensure a minimum level of staffing in certain industries during strike action.
- Improved family friendly rights, including making it unlawful to dismiss a woman for six months after her return to work following maternity leave (except in specific circumstances) and giving employees the right to "switch off" and disconnect from work communications outside of working hours.
- Enhanced equality at work, including raising awareness of neurodiversity and better supporting the menopause (with mandatory Menopause Action Plans for large employers with 250+ employees).
- Equal Pay: Labour intends to close the gender pay gap by requiring large firms to develop, publish and implement action plans to close their gender pay gaps and to include outsourced workers in their reporting. The publication of ethnicity and disability pay gaps will also become mandatory for organisations with more than 250 staff.
- Single Enforcement Body: Labour proposes to create a Single Enforcement Body with extensive powers to ensure workers' rights and take action against exploitation.
- Increase in the Employment Tribunal limitation period: The proposal is to increase the time limit for all employment tribunal claims from three months to six.
Labour’s proposal to end the current three-tier system for employment status (of employee, worker or self-employed) and to reduce it to a simpler framework of worker or self-employed will take longer to introduce, as it will first be subject to detailed consultation. Labour is also proposing to review the parental leave system within the first year of government, so watch this space.
As we navigate this period of transition, it is crucial that business owners and HR professionals stay informed about the forthcoming changes to employment law and adopt a proactive approach, starting to review existing contracts, policies and budgets now and considering the potential impact on their workforces.
We will continue to highlight Labour’s proposed changes in our free employment law bulletins and over our socials in the coming months. If you have any questions, please do not hesitate to contact us.
