Big Ben at night and Westminster bridge with red and blue car light trails

General election: employment watch – Labour proposes big employment law reforms

In light of the UK’s next general election taking place on 4 July 2024, we’re taking a look at some of the key promises relating to employment law made by the leading political parties.

In previous articles, we’ve looked at the proposals for employment law reform contained in the manifestos of the Liberal Democrats and Conservatives. This article will look at what the Labour party is promising.

Most significantly, Labour’s manifesto commits to introducing their ‘Plan to Make Work Pay: Delivering a New Deal for Working People’ (‘Plan‘) in full, which will include introducing legislation within 100 days of entering government.

Given the huge number of reforms contained in the Plan, we will not go into detail on each of them here, but we have highlighted some of the key headline changes:

  • Ban exploitative zero hours contracts – it remains to be seen what will count as ‘exploitative’, but Labour is clear that they want to end one-sided flexibility. Reforms on this topic will also give workers the right to a contract that reflects the number of hours they regularly work, based on a 12-week reference period, as well as a right to reasonable notice of changes to shifts or working times. This could increase the financial and administrative burden on employers who engage casual staff, particularly those in the gig economy.
  • Day 1 basic rights – this will include unfair dismissal protection, parental leave and sick pay rights for all workers from the very outset of employment. With regards to unfair dismissal rights, this is a significant change from the current position, whereby employees must usually wait two years to accrue protection. Labour have confirmed this change won’t prevent fair dismissal (for reasons such as conduct, redundancy or capability etc.) or the use of probationary periods with fair and transparent rules and processes. It’s not clear how any specific rules around probationary periods would work, but it would be prudent for employers to ensure their contracts contain a probationary period clause. It’s also likely that recruitment processes will need to be more robust as hiring the right candidate will become even more important.
  • Single status of worker – this would involve moving away from the current three-tier employment status system (worker, employee, self-employed) towards a two-tier model. All but the genuinely self-employed will be workers. This means workers will be entitled to all basic employment rights, which would kick in from day 1. This proposal, coupled with the changes to unfair dismissal protection, may increase costs for employers.
  • Right to switch off – see our article here for a more general discussion on this topic.
  • Increase time limit for employment tribunal claims – by extending the limitation period from three months to six months, meaning workers will have more time to bring a claim. This, coupled with the introduction of day 1 rights and single worker status is likely to result in increased tribunal claims. Given the tribunal service is already struggling to meet demand, this is likely to result in even further delays.
  • Strengthening collective bargaining and trade union rights – achieved by repealing certain legislation (including the Minimum Service Levels (Strikes) Act), simplifying the union recognition process and introducing rights for trade unions to access workplaces in a regulated and responsible manner.
  • Reform sick pay – by removing the lower earning limits so it is available to all workers and remove the waiting period. Labour also promises to ensure the new system provides fair earnings replacement for those earning below the current SSP rate. The Liberal Democrats manifesto announced similar, but slightly wider, reforms.
  • Extend equal pay legislation and pay gap reporting – see our article here for a more detailed discussion on this topic.

Labour’s manifesto also includes employment related pledges which do not appear in the Plan. For example, they will implement a more joined-up approach with regards to helping people into work by bringing Jobcentre Plus and the National Careers Service together. In particular, they’ll help local areas to create plans to support disabled people and those with health conditions into work and promise reform/replacement of the Work Capability Assessment. They will also focus on getting young people earning or learning, by establishing a youth guarantee of access to training, an apprenticeship, or support to find work for all 18- to 21-year-olds, as well as guaranteeing two weeks’ worth of work experience for every young person.

Should you wish to discuss any of the issues raised in this article, please contact Robert Forsyth.