Within its first 100 days in government, Labour has promised to introduce its 'New Deal for Working People'. The party's election manifesto criticised current employment law as “not fit for purpose”, and vowed to introduce new legislation should Labour come to power.
Now Labour is in government, it's time to take a closer look at what their reforms mean for the HR sector and employment law in general. Proposals from Labour's 'new deal', include banning zero-hours contracts (if such are deemed to be exploitative), ending fire-and-rehire tactics, strengthening trade unions, raising the minimum wage including the removal of the age bands for the minimum wage, and making statutory sick pay available from the first day of sickness instead of the fourth.
A further major proposed change is changes to the right to claim unfair dismissal, making this a day one right. This is a change from the current position of only being able to claim for this after two years’ continuous employment, however the Labour proposals include reference to a new special status for probationary periods.
Employers will need clarity on some of these pledges, such as day-one unfair dismissal, holiday pay rules, restrictions on probation periods and defining 'fair and transparent rules and processes' for fair dismissals during probation periods. Employers will also need enough time to prepare for these significant legal changes, and to plan for the associated cost increases.
Regarding the banning of exploitative zero-hours contracts, the new Labour government will also need to impose clear timelines on when and how these will be banned, and any exceptions, so that employers are prepared. Employers also face the administrative burden and cost of IR35 and off-payroll working rules. Clear definitions of 'worker' status and the 'genuinely self-employed' are essential.
Ben Willmott, head of public policy at the CIPD, claims that the Labour government should consult business and trade unions as it implements new policies.
“It’s crucial that the government follows through on its pledge to govern in partnership with businesses and trade unions and consults thoroughly on its plans. Raising employment standards is positive, but will only succeed if the government genuinely listens and is willing to refine its plans and compromise where necessary,” he said.
He also added that it was vital that any new legislative changes didn't affect employees. For instance, unfair dismissal or probationary period rule-changes must not discourage employers from hiring permanent staff or lead them to prematurely dismiss new employees who need more time to adapt to a role.