What does the new Labour Government mean for employment law?

Posted on July 16, 2024

Now the dust has settled, and the cabinet has been formed it’s time to get on with the business of government, but just how will life change for employers and employees under a Labour Government?

We’ll see policies unveiled this week with the King’s Speech, but as part of their campaigning the Labour Party proposed widespread changes to UK employment law as part of “Labour’s Plan to Make Work Pay: Delivering A New Deal for Working People”:

“Labour’s plan will make work pay. We’ll boost wages, make work more secure and support working people to thrive - delivering a genuine living wage, banning exploitative zero hour contracts, and ending fire and rehire”.

“The party vows to ‘introduce’ legislation within the first 100 days of taking office but does not say which specific measures will be introduced during that period,” says Pearson Employment Solicitor, Lucy Croft.

“It further promises to consult fully with businesses, workers and society on how to put its plans into practice before new employment law is passed, and that standard implementation periods will apply for this new legislation (meaning it will likely be at least 6-12 months before we see any changes implemented),” she adds.

“Labour’s plan to make work pay is a core part of our mission to grow Britain’s economy and raise living standards across the country”.

The main points to consider, when it comes to employment law, are as follows:

Day one employment rights

Unfair dismissal

All employees will have unfair dismissal rights from day one of employment, as opposed to two years (two years’ service is the current position in most cases, save discrimination).
The current potentially fair reasons for dismissal will remain in force.
There will be new rules about the use of ‘fair and transparent’ probationary periods and processes.

Parental leave, flexible working and statutory sick pay (SSP)

The right to parental leave (from day one, as opposed to after one year). There is a further pledge to conduct a review of parental leave within the first year of the Labour government being in power.

Flexible working by default – the current government made changes to flexible working rights on 6 April 2024. Labour has promised to adapt and build on this foundation and make flexible working ‘the default from day one for all workers, except where it is not reasonably feasible’.

Statutory Sick Pay (SSP) will be extended to all workers (including those earning below the lower earnings limit) and the current three-day waiting period for SSP will be removed.

Trade Unions

There will be a new obligation to inform employees of their right to join a trade union in the written statement of terms and to remind all staff of this right regularly.

New duty on employers to inform workers of their right to join a union.
New right for unions to access workplaces in a regulated and responsible manner, for recruitment and organising purposes.
Reform of various aspects of existing trade union law to remove restrictions on activity, make ballots simpler and more flexible, abolish the recently introduced minimum service levels, prevent replacement of strikers with agency workers, and change the threshold of support required for union recognition to a simple majority.
Ensure trade union representatives are granted sufficient time off (facilities time) to perform their duties.
New protections against union-related intimidation, dismissal and blacklisting.
New statutory rights and protections for trade union equality reps.

Employment rights for zero hour contracts

‘Exploitative’ zero hours contracts will be banned, and there is a promise to end ‘one sided’ flexibility to ensure all jobs provide a baseline level of security and predictability.
Compensation is to be paid by employer when shifts or working times are cancelled or restricted without reasonable notice.
New right to have a contract that reflects the number of hours regularly worked, based on a twelve-week reference period.

Right to switch off

The Labour Government promises to give workers the ‘right to switch off’, so ‘working from home does not result in homes turning into 24/7 offices’.
Following models introduced in Ireland and Belgium, workers and employers will be encouraged to have constructive conversations and work together on bespoke workplace policies or contractual terms that benefit both parties.

Fire and rehire

‘Fire and rehire’ (the practice of an employer making an employee redundant and then re-engaging them on reduced terms and conditions) will be banned, and effective remedies against abuse will be introduced.
The ‘inadequate’ statutory code of practice (currently expected to come into force on 18 July 2024) will be replaced with a ‘strengthened’ code of practice.
These plans appear to be aimed at both collective and individual ‘fire and rehire’ scenarios.

Pay and equality

Ban on using outsourcing to avoid equal pay for women.
Gender pay gap reporting rules to extend to outsourced workers.
Large firms to publish action plans on closing gender pay gap.
Plans to make ethnicity pay gap and disability pay gap reporting compulsory for employers with at least 250 employees. This is likely to mean a bigger burden on data handling, diversity and inclusion reporting and HR compliance management.
Implementation of the socioeconomic duty in the Equality Act 2010 for public authorities.
Preservation of EU law principles on equal pay.
Plans to extend the right to make equal pay claims to black, Asian and minority ethnic and disabled workers. It also wants to introduce a right to claim 'dual discrimination,' where an individual can claim they have been discriminated against because of having two protected characteristics, such as discrimination based on race and gender.

Sexual harassment

There will be a duty to take ‘all’ reasonable steps to prevent sexual harassment, and an extension of duty to mitigate harassment by third parties. This goes further than the legislation due to come into force on 26 October 2024.
Strengthened protections for whistleblowers, including protection for women who report sexual harassment at work.

Maternity protection

It will be unlawful to dismiss a woman within six months of her return from maternity leave, with some exceptions (details of which have not yet been published).

Menopause

Large firms (with more than 250 employees) will have to produce Menopause Action Plans. New guidance on supportive Menopause workplace measures/considerations.

Collective grievances

New right for workers to collectively raise grievances to ACAS about conduct in their place of work.

Minimum wage reforms

Cost of living to be considered when setting rates.
Removal of ‘discriminatory’ age bands.

Single status of worker

Replace the existing three categories of employee, worker and self-employed with two: worker and self-employed. This is likely to involve the extension of certain rights (such as unfair dismissal) to individuals who are currently classified as workers.

TUPE protection

Changes to consultation and dismissal rights. No detail has yet been published.

Whistleblower protection

Strengthened protections for whistleblowers.
Specific protection for women who report sexual harassment at work.

Self-employed

New right to a written contract.

Bereavement leave

New right to bereavement leave for all workers. Not clear whether it will be paid or unpaid.

Carer’s leave

Review the implementation of carer’s leave introduced on 6 April 2024 and examine the benefit of introducing ‘paid’ carers’ leave.

Workplace surveillance

Requirement to consult with workforce representatives before introducing surveillance technology.
Consider safeguards against ‘discriminatory algorithmic decision making’.

Fair allocation of tips/gratuities

Strengthening the law to ensure the fair allocation of tips, gratuities and service charges. It is not entirely clear whether this would involve changes to the Employment (Allocation of Tips Act) 2023 which was expected to come into force on 1 October 2024 (subject to implementing legislation being passed) but the suggestion that workers should ‘decide how tips are allocated’ would suggest this is likely.

Unpaid internships

These will be banned, except where they are part of an educational or training course.

Adult social care sector

A new Fair Pay Agreement will be set up to collectively negotiate better pay and conditions in the sector.

Education sector

Reinstate the School Support Staff Negotiating Body.

Single Enforcement Body

New body to enforce all statutory employment rights, with trade union and TUC representation.
This single enforcement body will have strong powers to inspect workplaces, to undertake targeted and proactive enforcement work, bring civil proceedings upholding employment rights and take action against worker exploitation.

Increased time limits for claims

The time limit to bring claims will be six months for all statutory employment claims – currently the time limit is three months for unfair dismissal, discrimination and most other claims.

Employment Tribunals:

Improve and digitise the Employment Tribunal system and give tribunals greater enforcement powers

How can we help

As with all things in employment law the goal posts shift from time to time and our employment law solicitors are here to help and advise at every step of the way.

For employment law advice call 0161 785 3500 or enquiries@pearsonlegal.co.uk

Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.