Get ready for employment law changes with the new Labour government

The Labour Party included its New Deal for Working People in its election manifesto. Now that they have won the election, we can expect significant employment law changes. There are no dates for when this will happen, although Labour has stated it will be within their first 100 days.

I will run through the fundamental changes which may impact your business.

Day one right for sick pay, parental leave and not to be unfairly dismissed.

Previously, we were accustomed to the under two year employment rights legislation. However, with the new employment rights legislation, employees will have rights from day one. This change will significantly impact businesses, as employers can now only dismiss an employee after a fair process, although it is unclear at this stage how this will impact probation periods.

Impact:  This may lead to more caution during the recruitment process and the use of more outsourced resources.

Restrictions on fire and rehire

The new code of practice on fire and rehire comes into force on 18 July 2024, which means the end to dismissing and offering to reengage workers on new terms or replacing existing workers with new workers on new terms.  This will only be allowed as part of a restructure when no alternative exists.

Impact: Employers will need a more substantial reason for changing employment terms than is currently required.

Ban on zero-hour contracts and a right to average hours contracts

To provide a more stable income, Labour plans to ban zero-hour contracts and bring in the right to an employment contract which reflects hours that are regularly worked (over a 12-week reference period).

Impact:  This will limit the current flexibility of zero-hour contracts.  There is no detail yet on the minimum number of hours that must be guaranteed.

Suitable to reasonable notice of work schedules

Labour plans to introduce new legislation about shift scheduling to ensure workers get adequate notice of the times they are required to work and don’t lose pay if shifts are cancelled at the last minute.

Impact:  Added pressure on managers when producing rosters may lead to short-staffed workplaces and increased pressure on those scheduled to work.

Single worker status

Labour wants to create a simple framework in which workers are either workers or self-employed. This would abolish the current distinction between employees and workers.

Impact:  People with worker status are generally taxed as self-employed.  If they are to become treated as employees, this is an additional cost to employers.

Right to disconnect

Labour plans to introduce the right to switch off from work, which will become part of workplace policies and contractual terms.

Impact:  Employers have previously been able to rely on employees picking up on important emails or messages whilst they are not at work; they will now have to assume this will not happen.

National Living Wage

Labour wants to link the National Living Wage to the cost of living and has also promised to remove the 18-20 age band. It plans to implement measures to enforce and penalise non-compliance.

Impact: Removing the under-21s age band will impact the retail, leisure, and hospitality sectors, where under-21s are often employed. It may also be more challenging for young people to secure jobs.

Trade Union Rights

Plans are to strengthen collective bargaining and introduce more rights for trade unions to access workplaces. These rights will replace the limited rights of entry and include a new digital right of access, which will enable unions to contact remote workers.

Impact:  As workplaces become more unions, employers must deal with collective bargaining.

Extension to Employment Tribunal claims

The time limit for bringing an Employment Tribunal claim after the date of dismissal is currently three months. Labour plans to extend this to six months. To meet increased demands and deadlines, Labour will need to invest in the Employment Tribunal system.

Impact: This will increase the time of uncertainty and the time for resolution.

There are many more changes, although we don’t have any further details at this time, such as the right to bereavement leave for all workers/employees.

Further expected changes:

• creation of a single enforcement body (not taking away from ETs more there to enforce employee rights
• extending equal pay legislation and pay reporting
• menopause action group – for businesses with 250 employees
• day one right to flexible working for all workers
• amending the threshold for collective redundancy consultation obligations
• protection from dismissal for returning mothers – further rights