It has now been confirmed that the polls leading up to the 2024 general election were accurate and the UK has started under a new Labour majority government.
Labour’s manifesto Plan for Change featured a number of policies and promises which could have some far-reaching implications for employers.
Alongside the main manifesto is Labour’s “Plan to Make Work Pay: Delivering A New Deal for Working People” (“New Deal”) which provides the detail and a promise to introduce legislation within the first 100 days of entering government. It should be noted, even so, that a number of the key points below will be subject to consultation.
One overriding theme is that enforcement of employment rights is currently disjointed and Labour propose creating a Single Enforcement Body to police employment rights.
Michael Redston, an employment expert at Aaron & Partners has carefully read through these documents to consider the changes that we might expect.
Day one rights
A significant proposal is to make eligibility for unfair dismissal claims, and parental leave into day one rights.
Of course, we may not see any immediate effect of removing the current 1 year 51 weeks’ service eligibility for an employee to claim ordinary unfair dismissal, but removing the length of service criteria is highly likely to lead to an increase in future claims.
If this change is introduced, it will be all the more important for employers to consider carefully any proposed dismissal, (even in the early stages of employment) and have a proper and lawful basis for dismissal with evidence supporting a fair reason and process for dismissal.
It is worth noting that the Labour New Deal plan refers specifically to probationary periods and ensuring “employers can operate probationary periods to assess new hires”, which suggests that provisions may be introduced to enable a probationary dismissal to be more straightforward.
Employers which do not already operate probationary periods in their contracts may be well-advised to consider their inclusion for future new hires.
The reference to parental leave and day one rights indicates the Labour plan will be to remove the current 26 weeks’ service eligibility requirement before an employee is entitled to statutory maternity/paternity/adoption leave pay and shared parental leave.
Labour is also proposing to make flexible working the default from day one for all workers, except where it is not reasonably feasible. Given the right to request a flexible working has recently become a day one right, Labour’s proposal appears to go further, creating an assumption that workers will work flexibly in any role. Some further clarity on this will be needed to comment further.
Contracts and status
Two key proposals relate to zero hour contracts and employment status.
Labour’s policies oppose “one-sided flexibility” which they indicate can result in unfair working practices. They are proposing to ban “exploitative” zero hours contracts and ensure that everyone has a contract that reflects the number of hours they regularly work, based on a twelve-week reference period.
From this it does not appear that they are intending to ban zero hours contracts outright, but will seek to increase job security and predictability for the workforce, so that all workers get reasonable notice of changes in shifts or working time, and will put anti-avoidance measures in place where necessary. They also refer to compensation for any shifts cancelled or curtailed by employers.
The New Deal includes a plan for moving towards simplifying employment status – creating a single status of worker. They propose to consult in detail on how this might feasibly be done, but indicate that would consider measures to provide accessible and authoritative information for people on employment status and what rights they are owed.
Pay: Living wage and sick pay
Labour’s proposals include strengthening of the current National Minimum Wage regime by increasing it in line with a “real living wage”. Alongside median wages and economic conditions, the minimum wage will for the first time reflect the need for pay to take into account the cost of living. Age bands for minimum wage would also be removed, and HMRC and the new Single Enforcement Body given greater enforcement powers.
In relation to sick pay, Labour say they will “strengthen” sick pay, which we understand from other speeches means they will increase the amount of statutory sick pay (“SSP”) an employee receives.
They will also remove the waiting period so that SSP will be payable from the first day of sickness absence, rather than the fourth day. This may not have a specific impact on employers which provide enhanced contractual sick pay, which is usually payable from day one of a sickness absence, but employers providing SSP only may need to reflect on the impact of those extra three days of sick pay.
Part of the proposals would also remove the lower earnings limit and employers may need to consider whether these proposals together may have an effect on the likelihood of an employee to call in sick for the occasional day or two, knowing they would receive SSP.
Family friendly rights
Maternity discrimination
Making it unlawful to dismiss a pregnant woman for 6 months after return from maternity leave, except in specific circumstances. This will go significantly beyond current protections, so employers will need to consider these changes carefully.
We anticipate, however, that one of the specific circumstances would be in a genuine redundancy situation, in which case the current protection (giving a woman in the protected period priority for a suitable alternative role) would no doubt remain.
Carer’s leave
The New Deal is not particularly clear on this point, but appears to suggest they will consider and consult on introducing paid carer’s leave.
Bereavement leave
Labour says it will clarify the law in relation to bereavement leave and introduce the right to bereavement leave for all workers.
Right to switch off
The New Deal refers to the blurring of boundaries between home and work life, recognising that technology allows us to work more flexibly, but this can require employees to be always available.
Labour proposes a right to switch off, similar to rights introduced in Belgium and Ireland. The New Deal document, however, does not seem to go as far as to suggest this would be a new law preventing employers from contacting employees outside of work hours, for example.
Other key changes proposed:
Tribunal limitation
A change to the primary limitation period for most employment tribunal claims, increasing it from 3 to 6 months. Combined with additional equality and family rights, and making unfair dismissal a day one right, there is a high probability that this will create a greater number of tribunal claims against employers.
Unpaid internships
These are to be banned unless part of an education or training course.
Trade Unions
As might be expected of the party born of trade unions, Labour proposes to strengthen the rights of working people by empowering unions.
Details of specific proposals for legislative change are awaited, but include proposals to modernise rules around balloting, simplify the process of statutory recognition for a union, ensure that union members and workers are able to access a union at work through a regulated and responsible route, and update rules on blacklisting.
Menopause in the workplace
Labour refers to a lack of support for those struggling with menopausal symptoms in the workplace and will require large employers of more than 250 employees to have a menopause Action Plan.
They say they will also publish guidance, on measures to consider relating to uniform and temperature, flexible working and recording menopause-related leave and absence. We expect guidance is likely to be welcomed by employers, to give a better understanding and framework to support individuals experiencing menopause and alleviate risk of discrimination claims.
Immigration
Labour says it will reform the points-based immigration system so that it is fair and properly managed, with appropriate restrictions on visas, and by linking immigration and skills policy. This appears to include a clamp down on employers who flout the rules, who will be barred from hiring workers from abroad.
Plans for the future
The New Deal document suggests a move over the next few years towards a working environment in the UK which would, if all this is delivered of course, create more employee-friendly rights.
Labour pledges to work with employers and create opportunities for negotiations between government, employers and unions to work towards cooperation and alleviate the strike action which has become more prevalent in the UK in recent years.
For employers, it will be essential to keep up to date with new rules and regulation, and any guidance or best practices. Contracts of employments and employee handbooks and policies may need to be reviewed and updated, and we would recommend additional training and support for managers and employees at all levels.
Aaron & Partners’ employment team will be following the progress of the proposed changes and will provide updates to ensure that employers are ready for their new responsibilities. Employers can be assured that with high quality advice and legal support from specialist professionals, they can navigate any challenges arising from these upcoming changes.
Key Contact
Michael Redston
Employment Law Associate Solicitor
Michael is an Associate Solicitor for the Employment team and provides advice on both contentious and non-contentious matters.
