How a Labour government could impact employment law
Labour is proposing some of the most radical changes to employment law that have been seen for some time. Employers need to be aware of these so that they can plan how they will adapt. Our employment law advisor, Donal Moon, summarises the key proposals from Labour that could impact employment law.
Labour is committed to introducing legislation to Parliament to start the process of bringing these laws into effect within 100 days of taking office, if elected.
Labour has now published an updated paper ‘Labour’s Plan to Make Work Pay’, which contains some changes from its previously published Green Paper and provides more detail about what is being proposed, so now is a good time to summarise the key proposals as they stand.
New rights for workers from day one
Workers to be given new rights from day one of employment
Labour is proposing to make unfair dismissal a day one right for all workers.
Labour has stressed that this does not mean that employers will not be able to dismiss employees for fair reasons, such as conduct, capability, redundancy, reasons required by law or some other substantial reason that justifies dismissal. It has also stressed that this will not prevent employers using probationary periods to assess new recruits’ suitability for a role.
However, now, many employers take advantage of the fact that employees with short service can generally be dismissed without cause and possibly without process. This new law would mean that employers will need to ensure that they are fair, transparent and keep detailed documentation regarding performance during probation and that they have one of the five legally fair reasons for dismissing short service employees and follow a full and fair process before deciding to dismiss.
Labour is also proposing making sick pay a day one right, remove the three-day waiting period and remove the requirement for a worker to earn at least the lower earnings limit (currently £123 per week) to be eligible for sick pay.
Strengthened family friendly rights from day one
Labour is keen to strengthen family-friendly rights. Labour proposes to make all types of family friendly leave, e.g. maternity, paternity, shared parental, adoption, carers, parental and bereavement leave a day one right, and:
- Make it unlawful for employers to dismiss a person who has returned from family friendly leave for 6 months after her return except in certain circumstances;
- Clarify and possibly strengthen carers leave rights and bereavement leave rights.
Labour has also said that it wants to encourage employers to sign up to the Dying To Work Charter and introduce measures to ensure that those diagnosed with terminal illnesses are treated with respect, dignity and are supported in the workplace.
Outside of this paper, Labour has also said that it will look at ways to increase the uptake of shared parental leave as it has noticed that uptake is very low.
Reform of employment status
Now, the UK has three employment statuses; employees, who have full employment rights, self-employed contractors, who have very few rights and workers, who have some but not all rights.
Labour proposes to merge the two employment statuses of employee and worker into one status of worker, with workers having the full array of employment rights, so that there will be only two statuses – worker and self-employed contractor.
Labour also proposes strengthening rights for self-employed contractors, including giving them the right to receive a written contract, action to tackle late payments and extending health and safety and block listing protections to them.
Workers to be given the right to disconnect
Labour is proposing to introduce a right for all workers to disconnect outside of working hours. Many countries across the globe have introduced a right to disconnect, with varying characteristics.
Based on Labour’s latest paper, however, it is looking closely at the Irish and Belgian models, so we could expect a right to disconnect to include:
- A right not to have to routinely perform work outside their normal working hours;
- A right not to be penalised for refusing to attend to work matters outside of normal working hours;
- A duty to respect another person’s right to disconnect.
Such models do not include a blanket ban on out of hours contact and give some scope for employers and workers to work together to agree the boundaries of the arrangement.
If these models are indeed followed, the onus for managing workers’ working time, ensuring that out of hours contact did not become routine and that workers were not treated unfavorably as a result of refusing to work outside of working hours, would be on the employer, however there would be flexibility for workers to work outside of traditional working hours if they wished to or if this fitted the requirements of the job.
Bans of zero hours contracts and fire and rehire
A ban on zero hours contracts
Labour views zero hours contracts as exploitative and proposes to ban them.
All workers will instead have the right to a more stable contract based on the hours they work over a twelve-week reference period. They will also have the right to reasonable notice of any change in shifts or working time and compensation proportionate to notice given for any curtailed or cancelled shifts.
Employers will still be able to use fixed term contracts, but it is likely that they will have to replace any zero hours or casual worker contracts with the more stable contract Labour proposes.
A ban on fire and rehire / fire and replace
Labour proposes to strengthen protection against employers using the threat of dismissal to force employees to accept negative changes to their terms and conditions.
Labour recognises that employers sometimes have no choice but to restructure their business to remain viable and so it proposes strengthening existing laws and issuing a strengthened code of practice so that any changes can only be made following a fair and transparent consultation process based on dialogue and common understanding between workers and employers.
Stronger protections and enforcement
Labour proposes to increase the time limit for bringing claims from 3 months to 6 months, giving a longer time limit for employees to act if they wish to pursue a claim.
Labour proposes to introduce the facility for employees to raise collective grievances via ACAS.
Labour proposes to establish a Single Enforcement Body, with trade union and TUC representation, which will have the power to undertake targeted and proactive enforcement of workers’ rights, including bringing civil proceedings against non-compliant employers.
Currently, employers are required to collectively consult with their employees if they propose to make 20 or more employees redundant at a single workplace within a 90-day period.
This means that, if an employer is proposing redundancies of, say, 25 employees across several work locations, but each individual location has less than 20 employees, the obligation to collectively consult would not be engaged.
Labour is proposing to change this so that the 20-employee threshold will be based on the number of redundancies planned across the whole company rather than the individual location. This would mean that employers would have to be careful to ensure that all employees who may be in scope for redundancy across a whole business are considered when reviewing whether there are collective consultation obligations.
Labour is proposing to strengthen TUPE protections for employees. There are no details of what these strengthened protections might be, but two possibilities are; one, scrapping the recent change to allow employers to consult directly with employees if they have with less than 50 employees or are transferring less than 10 employees and two, making it even more difficult to make transferring employees redundant or make changes to their terms and conditions.
Labour is proposing to strengthen protection for whistleblowers who report sexual harassment in the workplace.
Pay and conditions
New laws are already incoming in relation to the fair allocation of tips and gratuities, although Labour proposes to strengthen these to ensure front line workers receive their tips in full and that workers decide how tips are to be allocated.
Labour had originally proposed making flexible working a day one right.
However, that change has already happened, and Labour now proposes to build on the existing framework and make flexible working the default position, offering support to employers to enable them to adapt to flexible working.
Labour is proposing changes to equal pay legislation, which currently gives people of all genders the right to equal pay for doing like work, work that has been rated equivalent under a Job Evaluation Scheme or work of equal value.
The key proposed changes are:
- Anti-avoidance measures to prevent outsourcing of services being used to avoid paying equal pay;
- Strengthening Equality Impact Assessments for public sector bodies;
- Implementing a regulatory and enforcement unit for equal pay with involvement from trade unions;
- Amending the equal pay legislation to enable workers to use comparators where their terms and conditions are attributable to a single source.
Labour has also set out its commitment to tackling pay gaps.
At present, there is a legal duty on firms with over 250 employees to report their gender pay gaps but not to take action to close the gaps. Labour proposes to change this by introducing a legal requirement for large firms to publish and implement action plans to close gender pay gaps and include outsourced workers in their reporting.
Labour also proposes to extend the pay gap reporting requirements for firms with over 250 employees to disability and ethnicity.
Labour is proposing to increase the National Living Wage to an amount that people can live on and increase enforcement powers of the Single Enforcement Body and HMRC.
Labour also proposes to abolish the age bands so that everyone receive the same living wage regardless of age.
It is not known what figure Labour has in mind, but this is likely to be a significant increase on current levels and increased enforcement powers mean that it is imperative that employers.
Labour proposes to ban unpaid internships unless they are part of education or a training course.
Equality and diversity
Labour is proposing significant developments in equality and diversity. Some of its key proposals include:
- A requirement for employers to create and maintain workplaces free from harassment, including by third parties. Now, employers will be required, from October 2024, to ensure that their workplaces are free from sexual harassment, but the third-party harassment provisions were rejected by the House of Lords and have not returned. Labour intends to reintroduce this so that employers would also be responsible for preventing harassment of its workforce by third parties.
- Raising awareness of neurodiversity in the workplace and society as a whole.
- Introducing a new requirement for firms with over 250 employees to produce menopause action plans and guidance and support for smaller employers.
Technology and surveillance
With the emergence of new technologies, Labour is concerned about the potential for invasion of worker privacy. It therefore intends, at the very least, to legislate to ensure that employers proposing to introduce surveillance technologies can only do so following consultation and negotiation with trade unions or elected staff representatives.
Trade Unions
Labour is proposing to reinstate the School Support Staff Negotiation Body, which will be tasked with the responsibility for establishing a new national terms and conditions handbook, training, career progression routes and fair pay rates for school support staff.
Labour is also proposing several changes to strengthen the role of trade unions by:
- Removing restrictions on trade union activity
- Reforming the ballot processes
- Simplifying the process of union recognition
- Giving unions more freedom to organise, recruit, represent and negotiate
- Introducing a requirement for employers to inform all workers on day one of their right to join a union
- Introducing increased protections for union reps against intimidation, harassment, threats, unfair dismissal and block listed
- Introducing new statutory rights for union equality reps
- Introducing a new method of collective bargaining across specific sectors called sectoral collective bargaining and introducing Fair Pay Agreements for those sectors
Conclusion
Labour’s proposals, as they stand, show that it intends to introduce some of the most far-reaching employment law changes witnessed in some time.
It would certainly lead to a paradigm shift to a more worker-friendly employment law landscape and finally usher in some of the long-awaited changes outlined in the Good Work Plan.
From an employer perspective, employers will need to prepare themselves for huge changes, including increased regulatory, legal and financial liabilities.