Labour’s Proposed Employment Law Changes

Overview

The Labour Party has pledged to im3plement extensive changes to employment law, proposing over 60 reforms. Some of these changes are intended3 to be introduced within their first 100 days in government. With Parliament scheduled to reopen on 17th July 2024, this timeline suggests that the proposed legislative changes could be introduced by 25th October 2024. However, new bills must go through the full parliamentary process before becoming law, and their final form may differ from the original manifesto pledges. The government has also committed to holding extensive consultations with stakeholders on their plans.

Proposed Changes

What are the key planned changes in the new employment rights bill? Labour’s “New Deal for Working People” addresses pay, time off, equality, and the enhancement of employment rights, leading to necessary contracts, policy changes, and procedures for employers.

National Minimum Wage

Labour proposes to eliminate the age bands within the National Minimum Wage (NMW) and to work with a single enforcement body and HMRC to ensure the necessary powers are in place for enforcement. They aim to collaborate closely with the Low Pay Commission, trade unions, employers, and the Council of Economic Growth to establish a “genuine” living wage that reflects the cost of living.

Lower Earning Limit and Statutory Sick Pay

Labour plans to abolish the Lower Earnings Limit (LEL) to make Statutory Sick Pay (SSP) available to all workers, regardless of their earnings, which currently must exceed £123 per week gross. Additionally, they intend to remove the three-day waiting period before SSP begins.

Unpaid Internships

Labour intends to ban unpaid internships, except when they are a requirement of an education or training course.

Flexibility and Time Off

Fundamental changes to the right to request flexible working have already been introduced this year. Labour plans to make flexible working the default from day one of employment for all workers, except where it is not reasonably feasible.

Statutory Bereavement Leave will require new policies detailing the legal rights and circumstances under which it applies. There is also potential for Paid Carers Leave, extending the recently introduced right. Labour plans to review all parental leave, including making it a day-one right.

Employment Status

Labour proposes simplifying the UK’s complex three-tier employment status system (employee, worker, self-employed) into a two-tier system: worker and genuinely self-employed. This change aims to provide more employment rights to current “workers” and casual workers.

Enhancement of Employment Rights

Labour plans to introduce basic day-one rights for workers, enhancing protection from unfair dismissal and extending rights to parental leave and sick pay. Additional rights will cover pregnancy, redundancy, TUPE, fire and rehire rules, and reducing restrictions on trade union activities.

Dismissals

Fair dismissals will remain permissible under current legislation, and probationary periods will still be allowed, provided they are accompanied by fair and transparent rules. However, short-service dismissals and dismissals during probation may require following a full disciplinary or capability procedure to avoid tribunal claims. Comprehensive public and parliamentary consultation will be essential.

Zero-Hour Contracts

Labour plans to end “exploitative” zero-hour contracts, aiming to provide more security and predictable working hours. Contracts will reflect the hours regularly worked, based on a 12-week reference period. Fixed-term contracts, including seasonal work, will still be permitted.

Fire and Rehire

Labour will strengthen or replace the current code of practice to ensure employers follow a proper process when no alternatives are available for business restructuring.

Self-Employment

Self-employed individuals will gain the right to a written contract, and actions will be taken to address late payments. Blacklisting rules will be modernised, and loopholes allowing law bypassing through third parties will be closed.

Redundancy Rights and TUPE

Labour plans to strengthen redundancy rights, including determining consultation rights based on the number of people affected in a business rather than in a single location.

Right to Switch Off

Labour intends to introduce the right to switch off from work, similar to policies in other countries.

Trade Union Membership

Labour plans to simplify trade union recognition and enforce employers’ duty to state in employment contracts that all workers have the right to join a union.

Equality and Harassment

Labour will strengthen existing and forthcoming legislation on workplace equality and harassment, requiring employers to take all reasonable steps to prevent sexual harassment. Liability for third-party harassment will be reintroduced. Large employers will be required to produce Menopause Action Plans, and enforcement of Equal Pay will be simplified.

Employment Tribunals

The time limits for bringing a claim to employment tribunals will be extended from three months to six months.

Actions Needed

With the introduction of new laws, employers will need to create new contracts or update existing ones, develop new policies, and ensure an understanding of the new and updated procedures across their businesses. Training for managers will be essential to help them manage and understand the new rights effectively.

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