With the Labour Party now in power, we take an in-depth look at their proposed key employment reforms. These reforms are poised to significantly impact both workers and businesses across the nation.
Day one rights
Unfair Dismissal
A big change is the proposal to give workers new “basic individual rights” from day one, “ending the current arbitrary system that leaves workers waiting up to two years to access basic rights of protection against unfair dismissal, parental leave and sick pay”.
Employers will be able to operate probationary periods to assess new starters, but changes will help to ensure that there are fair and transparent rules and processes and that new hires are not fired without reason or cause.
This change will have a far reaching impact on businesses that are currently not exposed to claims for unfair dismissal when they fail to follow due process, such as completing performance and disciplinary procedures, prior to dismissal during the first two years of employment.
Flexible working
Labour would make flexible working the default from day one for all workers, as far as is reasonable.
It suggests Labour will build on the changes to the framework for flexible working recently introduced by the current government to ensure that flexibility is a genuine default. The right to request flexible working became a day one right on 6 April 2024.
Dismissal and re-engagement
Labour has committed to end the practice of “fire and rehire” as a lawful means of changing an employee’s contractual terms.
It accepts that, when there is genuinely no alternative, businesses must be able to restructure to remain viable. However, it considers this “must follow a proper process based on dialogue and common understanding between employers and workers”.
Harassment
Employers will be required to create and maintain workplaces and working conditions free from harassment, including by third parties. The legal duty for employers to take reasonable steps to stop sexual harassment before it starts will be strengthened.
It is not clear whether the duty proposed would go further in other respects than the new mandatory duty to prevent sexual harassment in the workplace, created by the Worker Protection (Amendment of Equality Act 2010) Act 2023, which had been expected to come into force in October 2024.
Mandatory ethnicity and disability pay gap reporting
The publication of ethnicity and disability pay gaps will be made mandatory for employers with more than 250 staff, to mirror gender pay gap reporting.
Employment status
Labour proposes to end the distinction between workers and employees and create a single worker category. Workers are currently entitled to paid holiday and protection from discrimination but not unfair dismissal. In addition the self employed will be entitled to their own new protection which would include a right to a written contract.
Ending one-sided flexibility
Labour have said they are committed to ending one-sided flexibility and to ensuring that all jobs provide a baseline level of security and predictability by banning exploitative zero hours contracts that do not have a minimum number of guaranteed hours. They want to ensure that workers have the right to a contract that reflects the number of hours they regularly work, based on a twelve-week reference period. Employers will still be able to offer fixed-term contracts including those for seasonal work.
Family-friendly rights
Parental leave will become a day one right.
It would be made unlawful to dismiss a woman during pregnancy or within six months of her return to work, except in specified circumstances.
Right to disconnect
A new “right to switch off” would be introduced, providing workers the right to disconnect from work outside of working hours and not be contacted by their employer.
Statutory sick pay
Labour plans to strengthen statutory sick pay (SSP), remove the lower earnings limit to make it available to all workers and remove the waiting period.
National minimum wage
Labour pledge to ensure that the national minimum wage (NMW) is a real living wage that people can live on. To achieve this the age bands would be removed to ensure every adult worker benefits.
How Moore Barlow can help
Our team of experienced business employment lawyers are dedicated to providing practical, tailored advice to help you achieve your business goals while protecting your interests. Our experienced employment law solicitors for companies provide comprehensive legal services to businesses, including advice on contracts, policies, disputes, and more.
