Labour are in, but what does that mean for employment law and UK employers?

Labour promise in their manifesto to “Make work pay”. Their aim is to bring in greater security for employees, ensure jobs are better paid, and to improve the autonomy for people in the workplace, underpinning their belief that employment laws in the country are outdated and need to be dragged into the 21^st century.

Labour have previously published their “New deal for working people” in which they outlined changes to working rights that they want to implement. Labour also promise to introduce legislation to implement these changes within the first 100 days of coming to power, but whether they succeed in implementing all these changes as they currently stand or if they are subsequently watered down is yet to be seen.

We have listed the key Labour pledges below, and given our insight on considerations employers will need to look out for under a Labour government.

1: Day 1 right for employees to bring unfair dismissal claims

The law as it currently stands does not give protection from unfair dismissal for employees with less than 2 years continuous service. Whilst there is already day 1 protection from unfair dismissal in certain situations (namely where discrimination is a factor), by making this a day 1 right, employers will no longer be able to dismiss employees in the same manner as they currently can. However, it is uncertain how this new day 1 right will interfere with probationary periods, but they are likely to gain more importance to employers where employees may be mismatched in their roles.

There is also likely to be an introduction of a requirement to collectively consult where redundancies have reached a threshold across the whole business (currently 20 or more). It would no longer look at numbers within an individual workplace. Revoking the law which enabled Woolworths to limit the duty when it went bust based on each shop being a single establishment.

2: Banning exploitative zero-hours contracts

Zero hour contracts afford both employers and employees flexibility on working hours to match the demands of a business, and are typically found in the hospitality sector. Labour appear not to be proposing a ban on all zero hour contracts; only those which are considered exploitative.

Labour in their New Deal appear to suggest contracts that exploitative are those which do not reflect the number of hours they regularly work by reference to a 12-week period, and instead suggest contracts should enable employees to get reasonable notice of changes to their working time.

3: Ending the practice of fire and rehire

Fire and rehire is typically encountered by employers and employees when an employer seeks to vary the terms of an employee’s employment in response to a legitimate business need for doing so. However, the practice was put in the spotlight following the P&O ferries fiasco where employees were replaced by agency workers after refusing to agree to vary their terms of employment.

They state they will end the current practice of fire and rehire and implement a strengthened code of practice in its place, but have not given any hints as to what will replace the current system, so the changes they propose to make are yet to be seen.

4: Changing the way the minimum wage is calculated – to take account for the cost of living

The minimum wage has recently increased to £11.44. Labour are proposing to change the way the minimum wage is calculated, by placing a greater focus on referring to the cost of living when setting the minimum amount.

They are also proposing to remove age bands too, so there is just one set minimum wage. This will likely impact employers who employ young people and will be a big factor for employers when considering budgets for staff.

5: Family rights

Bereavement Leave would become a statutory entitlement for all workers and Parental leave would become a day one right. Labour will also consider making the new one-week carer’s leave entitlement, which came into force in April 2024, a paid entitlement for employees.

Consistent with the new extended protection against redundancy for pregnant employees and those on maternity, Labour would ban the dismissal of those returning from maternity leave for 6 months. This would be except for specific circumstances.

Labour would automatically classify employees reporting sexual harassment as whistleblowers; if dismissed, they can seek interim relief to protect their salary. Extending protections against sexual harassment by placing a duty on employers to take reasonable steps to prevent harassment, including from third parties or customers.

6: Employment status & equal pay

Labour plan to introduce a single status for workers, replacing the current system, though it is unclear how the new rights will be applied. For employers with over 250 employees, Labour will mandate ethnicity pay gap reporting and extend this requirement to include pay reporting for employees with disabilities. To address the gender pay gap, Labour will require data on outsourced workers to prevent employers from using outsourcing to avoid equal pay.

Labour proposes to make flexible working a day-one right, except where there is a good reason for the employer to refuse. This considerably raises the bar from the current standing. Introducing a right to switch off, or “disconnect” to ensure that working from home does not mean a home becomes a 24/7 office. This will apparently follow comparable models in Europe.

Further, Labour aims to provide more security for self-employed workers by introducing a right to a written contract.

7: Sickness / Sick pay

Labour will remove the lower earnings limit in order to make statutory sick pay available to all workers, as well as removing the waiting period (3 days) so that sick pay is available on day one.

Employers with over 250 employees must create Menopause Action Plans to support employees experiencing menopause.

Provide more support to terminally ill employees by encouraging employers and trade unions to sign up to the Dying To WorkCharter.

8: Trade Unions Rights and Employee Strikes

Labour will introduce a requirement for employers to notify employees regularly of their right to join a trade union and implement a requirement for a collective grievance process, though details on its implementation are not provided.

Labour plan to provide union representatives with stronger protection in relation to threats, harassment and intimidation, as well as against dismissal. They also plan to allow trade unions access to workplaces with appropriate notice, including digital access.

Labour plan to water-down the Strikes (Minimum Service Levels) Act 2023 and the Trade Union Act 2016. The legislation was introduced to allow employers to force workers into delivering a minimum level of service during strikes to limit their impact. They would include confirming that agency workers cannot cover for striking workers by repealing current regulations.

9: Tribunals

Labour promises to improve, strengthen and digitise the Employment tribunal system. Where we will see the introduction of a single state enforcement body to enforce workers’ rights to help with the backlog currently facing the tribunal system. As well as extended time limits within which a claim can be brought to the tribunal (from three to six months).

Conclusion

Now we know who the new government will be and what possible changes are coming down the line to employment related issues. What is clear is that the employment landscape is set for some of the most substantial changes in a while, for both employers and employees.

If we can help you and your business with any HR or employment related matters, please do not hesitate to get in contact with us.

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