Labour’s employment plans potentially seismic

Labour has published what they term their “Plan to Make Work Pay” and on 13^th June, formally launched their Manifesto.

Whilst there were no “rabbits out of hats” in the Manifesto, Labour’s plans for employment law are ambitious. If enacted, they will lead to some of the most significant changes to employment law seen in many years.

With polls suggesting a Labour victory in the General Election on 4 July, now is the time for HR to get up to speed with what a Labour government might mean for employment law.

But what is Labour proposing exactly? Louise Taft, employment lawyer at Jurit LLP, explores.

As part of their mission to grow Britain’s economy and raise living standards across the country, Labour is promising to “deliver a new deal for working people” which will “boost wages, make work more secure and support working people to thrive.”

They aim to do this by introducing a range of legislation within 100 days of entering government, whilst consulting fully with businesses and workers before any legislation is passed.

As with the majority of pledges, however, the proposals lack detail pending further consultation.

HR practitioners will therefore need to monitor for developments to establish just what will change, and to understand any unintended consequences that Labour proposals might have.

To help you get ahead, here’s a whistlestop tour of what HR professionals can expect, should Labour win in the General Election.

Zero Hours Contracts

Labour is promising to end one-sided flexibility, ban exploitative zero hours contracts and introduce the right to a contract that reflects the number of hours worked over a 12-week reference period.

They also want to ensure workers get reasonable notice of change in shifts or working time, with compensation available for cancelled or shortened shifts.

Fire and rehire

Labour has also promised to ban this, but also recognises that there will be a limited number of cases where this will remain possible, if the alternative is bankruptcy and mass redundancy, because businesses must be able to restructure to remain viable.

They appear to suggest that there will need to be a “proper process based on dialogue and common understanding”. This points to a strengthening of the ACAS Code of Practice as opposed to an outright ban, but time will tell.

Day 1 Rights

This has the potential to have the biggest impact on day-to-day HR practice.

Labour says it will scrap the two-year qualification period to bring claims for unfair dismissal, though still allowing for probationary periods.

As ever, the devil will be in the detail in terms of just what is needed to fairly dismiss at the end of a probationary period, and what period of time will be considered fair, so HR professionals will need to wait and see.

They also propose to remove the qualifying period for parental leave. Given that this is not a commonly used right, it is less likely to have a significant impact on employers.

Single Worker Status

Another potentially significant change is the proposal to create a single status of worker.

This will remove the hybrid “worker” status which gives the right to claim under the Equality Act and rights to the minimum wage and holiday pay but not the right to bring unfair dismissal claims or the right to redundancy.

This is something Labour recognises will need to be consulted on, so it is unlikely to be implemented immediately.

Redundancy, TUPE and Whistleblowing

Labour will change the rules on collective consultation so that the trigger is not the number made redundant in any one “establishment” but, rather, across the business.

They plan to reinforce existing rights and protections in TUPE situations, but there is no detail here on what this might entail.

Whilst Labour promise to strengthen protection for whistleblowers, including women reporting sexual harassment, there is no further detail at this stage on what this might entail.

Self-Employment

Labour is proposing the right to a written contract, action to tackle late payment and to extend health and safety and blacklisting protections to help protect the approximate 4.5 million self-employed people in the UK.

Flexible Working

A Labour Government would make flexible working the default from day one for all workers, except where it is “not reasonably feasible”.

This isn’t far away from the proposal made by the existing government that resulted in recent relatively minor changes to flexible working legislation. Again, the detail is missing in terms of exactly what Labour propose to do.

Parental Rights

The parental leave system will be reviewed by Labour within their first year of government, however, we don’t yet know what they propose to change so HR professionals will need to monitor this over the coming months should Labour be elected.

Maternity Discrimination, Carer’s & Bereavement Leave

One concrete proposal from Labour will be to make it unlawful to dismiss a woman within six months of returning from maternity leave “except in specific circumstances”.

They also plan to review the recently introduced Carer’s Leave and look at paid Carer’s Leave, whilst giving the right to bereavement leave for all workers.

Right to ‘Switch Off’

Labour promises to bring in a new policy which would restrict bosses from contacting workers outside of hours by phone or email.

This time last year, Angela Rayner told the Financial Times that: “Constant emails and calls outside of work should not be the norm and is harming work-life balance for many.”

The proposal, which would follow in the footsteps of France who introduced something similar back in 2017, will also be an “opportunity to have constructive conversations” about policies or contractual terms. It’s not clear exactly what this will mean in terms of legislation yet.

Minimum Wage

Labour proposes to scrap the age bands that form part of the Minimum Wage at the moment, in a bid to deliver a more genuine living wage.

They also want to require the Low Pay Commission to take account of the cost of living when setting the rates.

Labour will also work with a new Single Enforcement Body and HMRC to step up enforcement by businesses, including penalties for non-compliance, as well as to make sure that regulations on travel time are implemented properly.

Sick Pay

If they get into power, Labour will scrap the lower earnings threshold for statutory sick pay, opening up access to sick pay to an estimated 1.5 million workers.

Not only this, they will also make workers eligible to claim sick pay from day one of falling ill, as they aim to end discrimination faced by low-paid employees.

Internships

In line with EU proposals, Labour is also promising to ban unpaid internships, except where as part of an education or training course, in a bid to clamp down on unscrupulous employers.

Equality and Equal Pay

To prevent outsourcing being “used by employers to avoid paying equal pay”, . It’s likely this will involve allowing outsourced employees to compare themselves with workers at the end user. They also promise a regulatory and enforcement unit for equal pay.

Meanwhile, large firms will be “required to develop, publish and implement action plans to close their gender pay gaps”.

Going forwards, this would mean that outsourced workers would need to be included in gender pay gap reporting and mandatory ethnicity and disability pay gap reporting will also be introduced.

Large employers will be required to produce Menopause Action Plans and guidance will be available for smaller employers on matters such as uniform, temperature, flexible working and recording menopause related absences.

Employment Tribunal time limits

To allow more time for internal procedures to resolve employment disputes, Labour plans to increase the time limit for presenting a claim from three to six months of an alleged act.

Whilst this proposal could support employees facing mental health difficulties, it could leave to a lengthier period of uncertainty for employers, not to mention potentially more claims being lodged on what is an already heavily burdened Tribunal system.

Collective bargaining

There are significant proposals around trade union legislation that are beyond the scope of this article, but Labour also promises sector specific collective bargaining in the social care and education sectors.

As can be seen, there are some potentially seismic proposals here. However, many of them lack detail and/or are subject to consultation.

What is clear is that if, as predicted, Labour win on 4 July, we can expect significant changes for HR practice.