Labour wins the general election - what does this mean for employers?
05/07/24The Labour party has won the general election, and so we look below at their manifesto and “Plan to Make Work Pay”, which proposes a series of wide changes in the employment law landscape. Whilst Labour have committed to introduce a draft Employment Rights Bill within 100 days of gaining power, in practice many of Labour’s proposals may take months and even years to come into effect.
Proposed changes
- Banning ‘exploitative’ zero hour contracts and increasing predictability
Labour initially proposed an outright ban on zero hour contracts, however, more recently they suggested that only ‘exploitative’ zero hour contracts should be banned. It is yet to be seen what would be considered ‘exploitative’.
Labour also plan to introduce a right to a regular contract which is based on a twelve week reference period, and to ensure workers receive reasonable notice for any changes in shifts or working time with proportionate compensation where shifts are cancelled. Such changes may increase resourcing difficulties and place additional pressures on managers creating rotas. - Restricting ‘fire and rehire’ practices
Labour plans to replace the new statutory code of practice (due to come into force on 18 July 2024) with a more robust code. Labour have suggested that dismissing and offering to re-engage workers on new terms should only be permissible where this is required for a business to remain viable, or where there is genuinely no other alternative. - Unfair dismissal and day one rights
Day one rights for all workers are set to be introduced, specifically in relation to sick pay, holiday pay, parental leave and protection against unfair dismissal. The removal of the two year qualifying period for unfair dismissal claims would likely result in a substantial increase in the number of claims in future. The paper indicates employers will still be able to dismiss employees throughout probationary periods (with fair and transparent rules and processes). - Employment status
Labour propose the creation of a framework where individuals are either self-employed or a ‘worker’, ending the current three tier arrangements. This wider definition of ‘worker’ would include those currently defined as employees as well as those currently considered workers. - Employment tribunals and enforcement
Labour has pledged to increase the time limits for bringing the majority of employment tribunal claims from three months to six months. This has the potential to increase the number of claims and will mean that employers will need to retain relevant documentation and information for longer periods.
Labour have proposed the establishment of a Single Enforcement Body, designed to enforce workers’ rights, allowing it to inspect workplaces and bring civil proceedings. The full scope of the body is yet to be determined but employers should be mindful of the likelihood of increased scrutiny in the future. - Family friendly rights and the right to switch off
Labour propose to review the parental leave system within the first year of government and have indicated that they will consider making carer’s leave (which came into force in April 2024) a paid right. Labour have also committed to strengthening protections for pregnant women by making it unlawful to dismiss a woman who is pregnant for six months after her return, except in specific circumstances. Such circumstances are yet to be defined.
Labour propose to introduce the right to ‘switch off’ to assist those remote working, encouraging employers to work on bespoke workplace policies and contractual terms to benefit employers and workers. - Discrimination and diversity
Labour have said that they will require employers with 250 or more staff members to publish ethnicity and disability pay gap reports, to mirror existing gender pay gap reporting. Labour also propose that existing gender pay gap reporting should be extended to include outsourced workers. Increased reporting requirements will create a bigger task for employers, particularly where external pay data may be required.
Whilst employers will already be required to take ‘reasonable steps’ to protect employees from sexual harassment from October 2024, Labour have indicated a plan to strengthen this legal duty to include ‘all reasonable steps’. Labour have also indicated that those who report sexual harassment at work will be automatically considered as whistleblowers, providing additional protection from detriment and dismissal. - Wellbeing at work
Labour propose to modernise health and safety guidance at work, specifically around extreme temperatures, mental health, long Covid and menopause (including the production of Menopause Action Plans) and encouraging employers to sign up to the Dying to Work Charter, which provides best practice for employing workers with terminal illnesses. - Trade Unions
Labour has pledged to repeal the Trade Union Act 2016, the Minimum Service Levels (Strikes) Bill and the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022. Labour propose to allow electronic balloting, give trade unions and members a new right to access workplaces, and create rights and protections for union representatives undertaking duties. Labour also intend to introduce a new duty on employers to inform new employees of their right to join a union and inform all staff of this on a regular basis. These proposed changes will require employers to review terms and conditions and existing practices and policies in respect of trade unions activity/duties. - Adult Social Care and Fair Pay Agreements
Labour propose a New Deal for Social Care Workers, ensuring workers are treated with dignity and respect and have a route to better conditions, training and progression. Labour propose to establish a new Fair Pay Agreement in the adult social care sector, empowering workers and trade unions to negotiate fair pay and conditions.
What to takeaway
It is yet to be seen how quickly Labour’s proposed changes will be implemented, with some changes requiring detailed consultation and others able to be implemented more quickly. In any event, it is clear that the employment law landscape will be subject to significant change.
Employers must be prepared to review existing policies, procedures and contracts to ensure that they are fully compliant with any future employment law changes.
How Capsticks can help
Capsticks has significant experience supporting employers on a wide variety of employment law issues including compliance health checks of contracts, policies and procedures. We will keep you updated on the above developments as they progress, or further information is released.
For further information on how we might assist your organisation, such as updating policies or employment contracts, please contact Paul McFarlane, Alistair Kernohan or Jonathan Lewis.
