A Labour Government: Proposed Employment Law Changes

Update

This is an update to our previous article on the employment law changes that a Labour Government propose to implement.

Manifesto & 'New Deal' Plan

This update is to factor in the publication of the Labour Party manifesto on the 13th June 2024, and of 'Labour's Plan to Make Work Pay: Delivering a New Deal for Working People' (hereafter referred to as the 'new deal') on the 24th May 2024. The latter was published by way of follow up to the new deal green paper on employment law that was released last year.

Proposed Employment Law Changes

The Labour Party's key employment law policies are as follows:

• Creating A Single Status Of Worker: Currently, there are 3 types of employment status – employees, workers, and the self-employed. Labour plan to amalgamate the categories of employee and worker so as to create one single status of ‘worker‘ who would have the same basic employment law rights. The only people outside of the new category of worker would be the genuinely self-employed.
• Day 1 Unfair Dismissal Right: Currently, employees must have 2 years of continuous service before acquiring the right to bring a claim for unfair / constructive dismissal. Under a Labour Government, workers would have this right from day 1 of their employment (see our previous article on the pros and cons of removing the 2 year rule re unfair dismissal). Nevertheless, employers will still be able to incorporate probabtionary periods into their workers contracts of employment
• Increase in Limitation Periods: Currently, the limitation period for most employment tribunal claims is 3 months minus 1 day. Labour plan to double this to 6 months minus 1 day, in line with the current limitation period for statutory redundancy pay and equal pay claims
• Statutory Sick Pay (SSP) & Parental Leave: Labour plan to make entitlement to SSP a day 1 right (as opposed to having to wait 3 consecutive days at present) and to extend the right to SSP to all workers by removing the lower earnings eligibility threshold. Parental leave would also become a day 1 right
• A Ban On "Exploitative" Zero-Hours Contracts: A ban on "exploitative" zero-hours contracts, as opposed to the complete ban that had been previously proposed in the original new deal green paper. By a ban on "exploitative" zero-hours contracts, Labour set out in their new deal plan that this means that: "Labour will end ‘one sided’ flexibility and ensure all jobs provide a baseline level of security and predictability, banning exploitative zero hours contracts and ensuring everyone has the right to have a contract that reflects the number of hours they regularly work, based on a twelve-week reference period."
• A "Genuine Living Wage": A "genuine living wage" in which the remit of the Low Pay Commission is expanded to factor in the cost of living. One rate would apply across the board, with the age bands removed
• A "Single Enforcement Body": Angela Rayner, the deputy leader of the Labour Party recently referred to this as a "fair work agency". Its remit would be to "levy fines, inspect workplaces, lodge civil proceedings and bring forward prosecutions. It would enforce rights like holiday pay, sick pay and parental rights."
• ‘Fire And Rehire’: Whereas a complete ban had been proposed in the new deal green paper, Labour's position in the new deal plan is that there should be a ban on ‘fire and rehire’ except where there is no other viable option to ensure the survival of the business and where "a proper process based on dialogue and common understanding between employers and workers" has been followed
• A Right To Switch Off: A right to disconnect. Labour refer to this proposal as a ‘right to switch off‘. A legal right to disconnect refers to a legal provision granting employees the right to disconnect from work communication and obligations outside their regular working hours. It aims to protect employees’ well-being and work-life balance by setting boundaries between their personal and professional lives.
• Protection From Remote Surveillance: Labour propose to introduce new rights against remote surveillance and to protect privacy. It would look to "promote best practice in safeguarding against the invasion of privacy through surveillance technology, spyware and discriminatory algorithmic decision making. At a minimum Labour will ensure that proposals to introduce surveillance technologies would be subject to consultation and negotiation."
• Equal Pay / Pay Gaps: Labour proposals include preventing outsourcing as a means of evading equal pay obligations, "protecting the ability to draw on equal pay comparators where workers' terms and conditions can be attributed to a single source", a requirement that those required to publish gender pay gap data also "develop, publish and implement action plans to close their gender pay gaps" and that outsourced workers are included within the pay gap data. Ethnicity and disability pay gap reporting would also be introduced for firms with more than 250 employees, who would also be required to produce menopause action plans

Other Employment Law Proposals

Other employment law changes that Labour plan to make include giving trades union greater access to workplaces and making it obligatory for employers to notify their employees of their right to join a union.

Labour also plan to ban unpaid internships, introduce the "right [that] redundancy consultation is determined by the number of people impacted across the business rather than in one workplace", provide enhanced rights in relation to TUPE and whistleblowing, and potentially make carers leave paid as opposed to unpaid.

Furthermore, Labour propose to introduce bereavement leave, to make "flexible working the default from day one for all workers, except where it is not reasonably feasible", to "enable employees to collectively raise grievances about conduct in their place of work, to ACAS", and to make it "unlawful to dismiss a woman who is pregnant for six months after her return, except in specific circumstances."

Timetable For Implementing Employment Law Changes

Labour has reaffirmed in its new deal plan to "introduce [employment law] legislation within 100 days of entering government", but stress that it "will consult fully with businesses, workers and civil society on how to put our plans into practice before legislation is passed", whilst acknowledging that some employment law measures will take "longer to review and implement" than others.