Labour Party Employment Law Proposals

Party Conference season is upon us and with the next general election due to take place by January 2025 at the very latest, this may be the last opportunity for political parties to deliver their pitch to the country. All parties are therefore setting out their proposals for government, which includes potential changes to employment law. At the recent TUC Congress in Liverpool, the Labour Party’s deputy leader, Angela Rayner, set out Labour’s proposed reform to employment legislation as part of the party’s ‘New Deal for Working People’.

Ahead of Labour’s party conference, we highlight some of the key proposals within their Employment Rights Bill which they have committed to introduce to Parliament within 100 days of entering office.

Reforming employment status

For employment law purposes, an individual may be an employee, worker or self-employed and their status determines what employment rights the individual has and the obligations of their employer. Labour intends to create a single status of ‘worker’ for all but the self-employed. As such, individuals who are currently regarded as workers will be afforded the same entitlements and protections as employees, which includes rights to sick pay and holiday pay. As ever the devil is in the details, however it could mean that workers gain significant employment rights overnight following the Bill being passed by Parliament. Businesses will have to be ready for this potential overnight change to ensure that they are compliant with the new status, which will include having up to date policies and procedures to reflect the change.

Day one rights

Labour have pledged to remove the qualifying periods for many statutory rights, whereby some protections, such as the right to not be unfairly dismissed, are only gained by an employee after two years’ service with the employer. These entitlements will effectively become a day one right, extending protections to a significant number of employees. Labour has provided unfair dismissal, sick pay and parental leave as examples of new day one rights.

The party also intends to make the right to flexible working the “default from day one”. Currently, an employee must have worked for their employer for at least 26 continuous weeks before they are entitled to make an application for flexible working. Labour plans to make this a day one right and have pledged to support small and medium-sized business to adapt to flexible working practices, although they have not provided any details in respect of how the government will support businesses.

The current Conservative government have recently passed legislation to update flexible working requests and whilst the updated legislation will not remove the requirement to have worked for at least 26 continuous weeks before making an application, they have committed to introducing secondary legislation that will entitle employees to make an application for flexible working from day one.

Banning zero hours contracts

Labour has long promised to ban zero hours contracts, so unsurprisingly the party has reaffirmed their commitment to banning contracts without a minimum number of guaranteed hours. A Labour government would ensure that an individual working regular hours for 12 weeks or more will be entitled to a regular contract to reflect the hours normally worked. Furthermore, Labour will ensure that all workers will receive reasonable notice of any change in shifts or working time, with wages for any shifts cancelled without appropriate notice being paid to workers in full. They have not defined what is meant by ‘reasonable’ or ‘appropriate’ or whether there will be statutory guidance to this effect.

Ending ‘fire and rehire’

Labour will outlaw fire and rehire, the practice whereby an employer unilaterally changes the terms and conditions of an employee’s contract by dismissing them and then re-employing them on new (and usually less favourable) terms and conditions. The current Conservative government has previously condemned use of fire and rehire and is planning to issue a statutory code of practice, subject to consultation, however Labour intends to outright ban the practice. Employers will be made to consult and reach agreements regarding contractual changes and the relevant legislation will be updated to prevent workers from being dismissed for failing to agree to a worse contract. It is likely that further guidance will be required to determine on what basis a contract is considered “worse”.

‘Right to switch off’

In an effort to improve work-life balance, Labour will introduce a new ‘right to switch off’ when working from home. Workers will be entitled to disconnect from work outside of working hours, nor can they be contacted by their employer outside of working hours. Labour has not provided much detail regarding this new right, for example whether it will be legislation or simply guidance. More information will be required to determine how this right will be governed and enforced; however, it is likely that Labour will consider how other countries have implemented similar legislation, for example France’s “right to disconnect” which applies to companies with over 50 employees and prevents employers from disciplining workers who do not respond to calls or emails outside of working hours.

Family-friendly rights

Labour has committed to extending statutory maternity and paternity leave and introducing a new bereavement leave. It is likely that this new entitlement will be a hybrid of the current statutory right to paid parental bereavement leave, and compassionate leave which many employers currently offer, albeit unpaid. The party also propose to introduce paid family and carers’ leave.

Labour have also said that they will strengthen protections for pregnant employees by making it unlawful to dismiss an employee who is pregnant for six months after their return, except in specific circumstances. The current Conservative government has recently passed legislation that increases protections from redundancy for pregnant employees, however it appears that Labour’s proposal will extend those protections beyond redundancy situations.

Trade unions

Recent trade union-related legislation passed by the current Conservative government will be repealed by Labour including the Trade Union Act 2016, which increased the ballot turnout threshold. Labour plans to establish a reasonable right of entry to organise in workplaces as a means of simplifying the process of union recognition. Other changes include providing union representatives with “adequate” time off for union duties and introducing a new duty on employers to inform all new staff of their right to join a union, and to inform all staff of this entitlement on a regular basis. As with other proposals in their Employment Rights Bill, Labour will need to provide further detail in respect of these entitlements and how they will be enforced.

Enforcing employment rights

Labour proposes to extend the time period for bringing claims to Employment Tribunals (currently either three or six months depending on the claim brought). Labour has also suggested that it will remove the statutory cap to compensation for claims of unfair dismissal. These changes could cause an increase in claims being brought by employees: not only could the period for bringing claims be lengthened, but removing the cap may increase the appetite for litigation for high-earning employees who would currently see their compensation subject to statutory limits.

The party has said that it will establish a Single Enforcement Body (SEB) to enforce workers’ rights. SEB’s will be given the power to enter a workplace and bring proceedings on behalf of workers, for example where an employer has breached its health and safety obligations or is failing to pay the national minimum wage. The introduction of these SEBs is also likely to increase claims being brought against a business.

If you require advice in relation to any of the employment law issues discussed in this article, please contact Jake McManus on 0161 912 6151 or email jakemcmanus@kuits.com.