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Last week, the Labour Party secured a landslide victory in the General Election, ending the Conservative Party’s 14-year reign. Central to Labour’s transformative agenda is its ambitious employment law overhaul under “Labour’s Plan to Make Work Pay: Delivering A New Deal for Working People” (the “New Deal”).
Employers should brace for significant changes, with new legislation set to be introduced within Labour’s first 100 days in office. Below, we break down the upcoming shifts in UK employment law, with further details to follow as implementation timelines are confirmed.
Employment Legislation
Unfair Dismissal Reforms
Currently, UK employees with less than two years of continuous service generally lack protection against unfair dismissal, except in specific circumstances. Employers can dismiss employees for (i) capability, (ii) conduct, (iii) redundancy, or (iv) other substantial reasons, provided they follow a fair process. Labour plans to extend unfair dismissal protections from day one of employment. While employer groups have expressed concerns, Labour suggests probationary periods will still be permitted, though the exact duration remains unspecified.
Ending “Fire and Rehire”
Labour intends to eliminate the controversial “fire and rehire” practice, where employers dismiss employees only to rehire them under altered terms. The previous government had planned to introduce a Statutory Code of Practice on Dismissal and Re-engagement on July 18, 2024, but Labour is expected to replace this with stronger regulations.
Redundancy and TUPE Overhaul
Labour plans to expand redundancy consultation requirements, currently applicable when 20 or more redundancies occur within 90 days at a single site, to cover the entire business. This aims to enhance employee protections. Additionally, Labour intends to strengthen TUPE (Transfer of Undertakings (Protection of Employment)) rights, though specific changes are yet to be detailed.
Employment Status
Labour plans to consult on abolishing the current distinction between ‘workers’ and ‘employees’ and moving towards a single status of ‘worker’.
Labour also intends to strengthen self-employed rights.
Equality & Diversity
Pay Gap Reporting and Action Plans
Labour plans to make reporting on ethnicity and disability pay gaps mandatory for employers with over 250 employees, similar to current gender pay gap reporting. Employers will need to develop, publish, and implement action plans to address these gaps and include outsourced workers in their pay ratio reporting. Additionally, Labour will require employers with over 250 employees to create Menopause Action Plans.
Workplace Harassment and Whistleblowing
Labour is committed to creating harassment-free workplaces, requiring employers to prevent harassment, including by third parties, and to take reasonable steps to stop harassment before it starts. Women reporting sexual harassment will receive the same protections from dismissal and detriment as whistle blowers. Labour also plans to strengthen whistle blower protections, with further details awaited.
Family Friendly Rights
Labour aims to enhance family leave rights, including:
- Parental Leave: Available from day one of employment, allowing up to 18 weeks of unpaid leave per child until the child turns 18.
- Pregnancy and Maternity Protections: It will be unlawful to dismiss a woman during pregnancy or within six months of her return from maternity leave, except in specified circumstances.
- Bereavement Leave: Clarified and extended to all employees, beyond the current limited statutory provisions.
- Carer’s Leave: Labour will review the implementation of unpaid carers’ leave, introduced in April 2024, and explore the potential benefits of introducing paid carers’ leave.
Working Arrangements
Engagement of Casual and Low-Paid Workers
Labour is committed to protecting casual and low-paid workers by:
- Banning Zero-Hour Contracts: Restricting, but not completely banning, zero-hour contracts.
- Ensuring Fair Contracts and Notice: Workers will have the right to a contract reflecting their regular hours, with reasonable notice for shift changes and proportional compensation for cancelled or curtailed shifts.
Right to Disconnect and Work Autonomously
Labour will introduce a “right to switch off,” allowing employees to disconnect outside working hours without employer contact. Labour also plans to ensure employer proposals for surveillance technology use undergo consultation and negotiation, requiring agreement from trade unions or staff representatives.
Right to Flexible Working
Labour aims to make flexible working the default for all workers from the first day of employment, except where not feasible. Specifics of this policy are still to be clarified.
Strengthening Trade Unions
Labour plans to update trade union legislation, ensuring employers inform workers of their right to join a union. Recent restrictions on trade union activity, such as the minimum service level requirement for essential services, are likely to be repealed. Labour also plans to ease industrial action ballot requirements and lift limitations on union workplace access.
Pay under the National Minimum Wage (NMW)
Labour proposes several changes to the NMW:
- Removing Age Bands: Abolishing current age bands, considered discriminatory.
- Expanding the Low Pay Commission’s Role: Ensuring the NMW rate reflects cost-of-living increases. Additionally, Labour plans to introduce a “Fair Pay Agreement” in the adult social care sector, providing stronger collective bargaining rights.
Enforcement Methods
Establishing a Single Enforcement Body
Currently, enforcing UK employment rights (excluding equality and human rights) relies on individuals or trade unions filing claims with the Employment Tribunal. Labour plans to create a single enforcement body overseeing equality, health and safety, minimum wage, and worker exploitation. This body will have broad powers for unannounced inspections, acting on anonymous tips, and initiating civil proceedings.
Extended Time Limits for Employment Tribunal Claims
Labour plans to extend the time limit for filing employment claims from three months to six months, providing employees with more time to seek redress.
Enabling Collective Grievances
Labour intends to enhance the current system by allowing employees to submit collective grievances about workplace conduct directly to ACAS, empowering workers to address broader issues collectively.
Stay tuned as we continue to report on these anticipated changes and their implementation timelines. There is no doubt that many of these changes will have a significant impact on employers and their business.
Please get in touch if you have any questions regarding the issues discussed in this article.
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