Labour and Employment
What can we expect the new Labour Government to do that will change employment law?
What will impact your business day to day?
Over the coming months, for smaller businesses, three top changes on the agenda for introduction are likely to be:
- Day One unfair dismissal rights – currently starting at two years continuous service this will be a major change for employers managing early stage issues of ‘job fit’. Probationary periods will still be able to be used but the reason for dismissal will need to be clear. This use of probationary periods in this new regime will need to be clarified;
- Changes to Statutory Sick Pay this includes removing the current three waiting days before SSP is paid and removing the ‘lower earnings limit’ for eligibility currently set at £123 per week;
- Calculation of the national minimum/living wage – the removal of the remaining adult age band (i.e.18-20), together with the Low Pay Commission having a wider remit to take account of cost of living increases in its recommendation of the national rates.
In other words, expect to have to invest more in the management of early-stage employment and expect some degree of higher wage and sick pay costs. Implementation timeframes will become clear when the supporting legislation is introduced.
Other areas where change is promised include:
• Changes to legislation covering zero hours contracts – but not an outright ban. What is envisaged is the right to a contract reflecting the regular hours worked (over a twelve-week referencing period). Alongside this will be a requirement to ‘reasonable’ notice of shifts and compensation for shifts cancelled or curtailed;
• Changes to the circumstances in which an employer can give notice on an employee’s current contract and re-engage on new terms (‘fire and rehire’) – but again not an outright ban more a ‘strengthened’ code of practice;
• A clearer framework to differentiate the employed and workers from the genuinely self-employed. There will be a ‘single status of worker’. Do not hold your breath, there is a reason this area of employment law is involved! The self-employed / freelancers will have a right to a written contract;
• On flexible working there is an agenda that this be ‘the default’, which appears more a statement of intent than a specific proposal to change regulations at this point. Its proposed that parental leave will start from day one. This currently applies after one year. In reality take up of this unpaid right is generally minimal.
• A push on women’s equality provisions including greater protections on equal pay, maternity (i.e. protection for six months post return to work), menopause (i.e. action plans for +250 employers) and sexual harassment (i.e. taking all reasonable steps to prevent this including from third parties).
• For larger employers (i.e. +250 employees) the current requirement to report on their organisation’s gender pay ratios will be extended to disability and ethnicity. This is likely to require more data collection on the workforce for most of these employers. What are termed ‘large’ firms will also have to develop and implement plans to close the gender pay gap.
There are other areas of planned changes where intentions are more general such as to:
• ‘Strengthen the collective voice of workers’, including Trade Union involvement. This will involve simplifying legislation around strikes, reducing thresholds for recognition votes, improving access rights for Trade Union representatives at workplaces and including in Statement of Employment Particulars (contracts) reference to the right to join a Trade Union;
• The creation of a ‘Single Enforcement Body’ for employment rights with workplace inspection rights. An underlying aim is for this body to provide greater protection for overseas workers;
• Consideration of paid carers leave with some support for small employers;
• Consideration of a ‘right to switch off’ for home workers particularly;
• Review of how surveillance technologies are introduced or managed and workforce involvement in this.
An overhaul of the adult social care sector is planned to include a degree of collective work-based negotiation around pay, terms and conditions as well as training standards. If that sounds a bit vague its reflective of the careful wording in Labour’s ‘make work pay’ proposals. This is likely though to have a major impact on employers in this area as it takes shape. Enforcement of paid travel time for carers also gets a mention.
The time limits for bringing employment claims will be extended from three to six months where this is not already the case, which is for most claims, including unfair dismissal. This is a significant change that is likely to increase the number of claims brought even if the opposite is claimed. There is also a significant but briefly mentioned proposal is allow ACAS to consider collective grievances. That would be a major shift in the way workplace relations can be managed.
The Labour Manifesto also promised to, ‘guarantee two weeks of work experience for every young person’. How that works will be an interesting one…
The Manifesto’s contention is that current employment laws are, ‘not fit for the modern economy’ with a focus on increasing job security, reducing ‘inflexibility’ and ‘low pay’ as well as removing barriers to ‘moving to a better job’. As ever the devil is in the detail, and we will update you as this becomes clearer.
Tim Marrow, Founder, Tamar HR Ltd.
[Note: this briefing note is based on the ‘Labour Manifesto 2024’ and ‘Labour’s Plan to make work pay: Delivering a New Deal for Working People 2024’]