What would a Labour government mean for employment law?

With the general election taking place on 4 July, we take a look at what a Labour government might mean for workers' rights and employment law.

The Labour Party published a green paper called “A New Deal for Working People” in 2021, and it's become clear that it wants to action many of the promises in that paper should it get into government.

At the October 2023 Labour Party conference, it was announced that many of these changes would become immediate and introduced within 100 days of Labour taking power via an Employment Rights Bill.

From job security to inequality and discrimination – let's look in a little more detail at what a Labour government would mean for employment law, and some of the changes that would be introduced.

A unified 'worker' status will be established

The current distinctions among employees, workers and the self-employed in employment law will be replaced with a single 'worker' status, which will apply to all but the 'genuinely self employed'.

Labour aims to ensure that all workers, except those who are genuinely self-employed, receive consistent rights and protections, such as sick pay, parental leave, and safeguarding against unfair dismissal, without requiring a qualifying period of service.

Plans to expand unfair dismissal protections

Currently, workers have to work for two years for an employer before they have protection against things like unfair dismissal.

Labour plans to enhance unfair dismissal protections by removing the two-year continuous service requirement and lifting the statutory caps on compensation for successful claims. They will also extend the time limits within which employees can bring claims.

A right to flexible working

Currently, employers have to agree to flexible working requests. Labour has pledged that under its government, workers will have a right to flexible working from day one in their role.

Extended statutory sick pay

Currently, statutory sick pay (SSP) becomes effective after three 'waiting days', a policy that some argue has lost its significance over time.

Under Labour, Statutory Sick Pay will be increased and extended to cover all workers, including the self-employed and those with low wages. Any alteration to this policy would directly impact employers' budgets, as SSP is entirely funded by employers.

Banning zero hours contracts

Zero hours contracts, and contracts without minimum guaranteed hours will be banned. This law aims to provide workers who have been working regular hours for twelve weeks or more with the right to a stable contract.

Ending 'fire and rehire' tactics

'Fire and rehire' is a controversial employment practice in which employers terminate employees from their current positions with the intention of offering them new contracts with potentially less favourable terms and conditions. This approach is typically used by employers who want to reduce labour costs or make changes to employment terms in their contracts such as wages, hours, or benefits.

The process involves terminating existing employees (often by giving notice of dismissal) and then re-offering them their jobs under new terms, which might include lower pay, reduced benefits, or changes to working conditions. Employees faced with this situation often feel pressured to accept the new terms, due to the threat of losing their jobs altogether.

For this reason, the practice of 'fire and rehire' has been greatly criticised for its impact on workers' job security, morale, and overall working conditions.

Critics argue that it can lead to unfair treatment of employees and undermine traditional labour rights and protections. Labour aims to combat 'fire and rehire' tactics by improving information and consultation procedures, adapting redundancy laws, and addressing notice and ballot requirements to protect employment terms and conditions.

The right to 'switch off' outside of work hours

Labour also plans to give workers a 'right to switch off' from work outside of working hours, and to protect them from remote surveillance while working from home.

This means that employers will not legally be allowed to contact their staff either during the evenings or at weekends, or outside of contracted hours.

Raises to the national minimum wage

The national minimum wage will be raised immediately to £10 per hour for all workers, and unpaid internships will be banned, except when they are part of an educational or training program.

Stronger workplace rights

Labour plans to strengthen workplace rights by extending time periods for bringing claims at Employment Tribunals and imposing stricter penalties, including personal liability for company directors if a tribunal awards a claimant a financial sum and this isn't paid.

Caps on compensation for workers will also be withdrawn.

Updates to trade union legislation

Trade union legislation will be amended to remove restrictions on union activity, and family-friendly rights will be expanded by extending statutory maternity and paternity leave and introducing bereavement leave.

Protections for pregnant women will be strengthened to prohibit dismissal during pregnancy or within six months of returning to a role, (except under specific circumstances).

Mental and physical health to be seen equally

Under Labour's proposed legislation, mental health will be placed on an even keel with physical health, and health and safety laws will be reviewed and amended to consider this.

There will be more awareness of neurodiversity, as well as long-Covid and its symptoms, and other lifestyle aspects that cause stress and poor worker mental health.

Fair pay agreements

Trade unions will be strengthened with the implementation of Fair Pay Agreements through sectoral bargaining, empowering workers to act collectively.

These agreements will set minimum terms and conditions covering pay, pensions, working hours, holidays, training, diversity and inclusion, and health and safety standards.

Unions will have greater ability to advocate for their members, and collective bargaining efforts will be enhanced. Labour also intends to simplify the trade union recognition process and reform trade union voting procedures. Trade union representatives would have strengthened rights and protections under these proposed changes.

Tackling inequality and discrimination

Addressing inequality and discrimination is a key focal point of Labour's proposed employment law reforms. Employers will have to establish and sustain harassment-free workplaces, including protection against third-party harassment. Women reporting sexual harassment at work will receive whistleblower-like protections.

Individuals with caregiving responsibilities will also receive enhanced safeguards, such as paid family and carer leave. Various measures will be introduced to narrow gender, ethnicity and disability pay gaps. Mandatory reporting of ethnicity pay gaps will apply to companies with over 250 employees.

A new Race Equality Act will target structural racism, focusing on issues like low pay for ethnic minorities, and imposing fines for non-compliance with pay data regulations. A position of Secretary of State for Women and Equalities will also be established for the first time.

While the outcome of the next election remains uncertain, Labour plans to make many changes to current employment laws, and it's important that HR professionals stay up to date with what's required to stay on the right side of the law.

Your partner in staying up to date with employment law

Our team of professionals at Neathouse Partners can help you to stay compliant with the law and keep you informed of employment law changes as and when they happen. Speak to us today about how we can support your business.

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