It’s official – last month, Rishi Sunak stood in the rain and announced that the UK general election is taking place on 4 July 2024. Given the Labour Party’s substantial lead in recent polls, it will likely be the party installed in power in just six weeks. Of course, the polls have been wrong in the past, but employers would do well to get ahead and be aware of the main employment law changes that Labour proposes to implement.
This month, we consider what a new Labour government in Downing Street might mean for your business. We also look at the key election pledges from the other main political parties that might impact employers.
What Would A Labour Victory Mean?
Labour has bold plans for reforming workers’ rights, so as expected, there is much focus on employment law in their election campaign. In the New Deal for Working People, published on 24 May 2024, Labour has promised a long list of ambitious employment law changes and it has also committed to bring about these reforms within 100 days of taking office.
Key plans include the following:
More Day-One Employment Rights
This would get rid of the qualifying periods for rights such as unfair dismissal, sick pay and parental leave.
Currently, employees are only protected from unfair dismissal after two years of employment with the same employer. However, Labour has promised to protect employees immediately from their first day of employment.
If introduced, employers will need to be even more mindful of their disciplinary and dismissal processes as a likely result of this reform will be an increased number of unfair dismissal claims. Employers will, however, still be able to put in place probationary periods although Labour has not yet explained how this will work in practice given this proposed change. Nonetheless, you may want to review your contracts to ensure they have clear, flexible and lengthy probationary periods.
Increased Job Security for Zero-Hours Staff
Labour has consistently promised to ban zero-hour contracts, under which an employer is not obliged to provide any minimum number of working hours. However, the proposals seem to have been watered down. We understand employers will be allowed to continue to use zero-hours contracts but Labour now commits to ban zero-hours contracts that are ‘exploitative.’ One example of this may be where an employer does not guarantee that work will be provided but the worker is required to be available for any work that is offered.
Furthermore, workers on zero-hour contracts who consistently work regular hours for 12 weeks or more will be entitled to the right to a regular contract. It is therefore likely that the planned right to request a predictable working pattern, which was due to come into force in September 2024, will be dropped in favour of Labour’s more radical plans in this area.
Extending the Time Limit for Making an Employment Claim
Labour is proposing to extend the current three-month time limit for making a tribunal claim to six months. An extension of time limits could ultimately be beneficial to both employers and employees, giving them more time to negotiate a settlement and avoid litigation.
It will also eliminate all limits on compensation awards.
Simplifying Employment Status and Extending Employment Rights to all Workers
Under this proposal, there would be two categories whereby people are classed as either ‘workers’ or ‘genuinely self-employed.’
All workers would be entitled to the same basic rights and protections around sick pay, holidays, protection from unfair dismissal, etc.
This is a substantial change and will probably be preceded by a consultation. Should this law come into effect, it would likely lead to a lot more tribunal claims, with workers able to claim unfair dismissal, rather than just employees as is currently the case.
A Right to Disconnect from Work
This proposal would give workers the right to switch off from work outside of working hours and not be contacted by their employer. This would bring us more in line with other countries, such as Spain, France and more recently, Australia.
Should this pledge become law, it would require policies to be put in place around contacting employees out of hours so that employers can only do so when it is legitimately required.
Enhancement of Existing Employment Rights
Labour has pledged to enhance flexible working rights and increase protections for pregnant staff, whistleblowers and workers making a grievance.
‘Fire and Rehire’
Labour has committed to putting a stop to the practice of fire and rehire as a lawful way to amend an employee’s contractual terms. It would reform the law and replace the government’s statutory code on fire and rehire with a stronger one.
In particular, Labour wants to enhance the information and consultation procedures relating to fire and rehire practices and to amend unfair dismissal and redundancy legislation to prevent workers from being dismissed for failing to agree to a worse contract.
Sick Pay
Labour proposes to make sick pay (SSP) available to more people, including workers who are not currently eligible, and at an increased rate. It would remove the three-day waiting period before SSP is payable, meaning that workers would qualify for SSP from their first day of absence rather than their fourth, as is currently the case. The lower earnings limit would also be removed.
The most significant changes proposed by Labour are the removal of the need for a qualifying service for certain employment rights and protections and the abolition of the distinction between worker and employee rights. These changes would certainly simplify employment status and help everyone understand what employment rights they have. However, the proposals will also mean that the risk of unfair dismissal will become much more significant for employers and come with a cost at a time when SMEs are already besieged with increasing costs and challenges relating to recruitment and retention of staff.
If the Conservatives are Re-Elected?
The Conservative party has not said much about its plans for employment law, but if re-elected, would almost certainly reintroduce employment tribunal fees and probably advance with capping the length of non-compete clauses as pledged, following a consultation on the subject last year.
A priority for the current government is getting people with health conditions back to work, with the proposed reform of fit notes. This reform involves moving responsibility for assessing fitness to work away from GPs to specialist work and health professionals.
The Liberal Democrats and Worker Rights
The Liberal Democrats have previously said they wanted to give all workers, including self-employed parents, a day-one right to parental leave and pay. They also plan to increase paternity pay to 90% of the employee’s earnings (capped for high earners).
Other key commitments in the past have included:
- An obligation on employers to advertise jobs with the availability of flexible working unless there are significant business reasons why this is not feasible
- A new right for every disabled person to work from home if they so choose unless there are significant business reasons why this is not possible.
If Labour is elected, it is highly unlikely that it will be able to implement all its employment law pledges within the first one hundred days following the election. However, we can expect some of the simpler proposals to be introduced within this time to demonstrate Labour’s commitment to improving workers’ rights.We will be keeping you updated on how the proposals outlined above develop, so follow our blog for more news on this subject. For more detailed information or advice on how to prepare your business for a new government, please contact us on 0300 303 2071 or email us.
