In a move that wrong-footed the majority of political pundits, Rishi Sunak announced the general election for 4 July. If the polls are to be believed the new government is more likely than not to be a Labour one with employment and workers’ rights taking centre stage, and Keir Starmer has promised to legislate within the first 100 days of being elected.
We caught the first glimpse of Labour’s intentions in February when they published their Employment Rights Green Paper which we briefly reviewed in our last edition of CL Q.E.B. This was refined and relaunched at the end of May under the title ‘Labour’s Plan to Make Work Pay.’
‘Delivering a New Deal for Working People’
In Labour’s introduction to their relaunched commitment to strengthening employment rights, they emphasise “our plan to make work pay. It’s how we’ll boost wages, make work more secure and support working people to thrive –delivering a genuine living wage, banning exploitative zero hour contracts, and ending fire and rehire.” We examine their main promises in the order in which they appear in their manifesto in more detail below.
Ending ‘one-sided flexibility'
Zero-hours’ contracts: Labour has rowed back on its original plan of scrapping zero-hours’ contracts. Recognising that zero-hours’ contracts work for some people, Labour aims to end ‘exploitative practices’ by giving everyone the right to have a contract reflecting the hours they work based on a 12-week reference period.
Fire and rehire: introduction of ‘effective remedies against abuse’ and the strengthening of the statutory code and Code of Practice. Labour understands the need for businesses to be able to restructure to remain viable but will insist they follow due process. There would be no outright ban on fire and rehire as initially thought.
Basic day one rights: Labour intends to introduce day one rights including protection against unfair dismissal, and the right to parental leave and sick pay for all workers. This is a major change from the current system whereby only employees have these entitlements. It is not clear how the timing would work given that their plans to introduce a single status of worker will require a consultation period. Probationary periods are likely to be unaffected as will fair dismissals providing the correct procedures and processes are followed.
Single status of worker: Labour refers to the Taylor Review which highlighted the lack of clarity provided by the current framework of the current three-tier system for employment status. The proposal is to move to a ‘simpler two-part framework’ with the single status of ‘worker’ and the genuinely self-employed, with the intention of maintaining flexibility while preventing employers from avoiding their legal obligations. How this works in practice will be subject to detailed consultation.
Redundancy rights and TUPE: There is limited detail other than an undertaking to strengthen redundancy rights and protections, such as ensuring the right to redundancy consultation is determined by the number of people impacted in the business as a whole rather than just at one site.
Whistleblowers: Again, thin on detail but with the stated intention of strengthening protection generally and, more specifically, for women reporting sexual harassment.
Self-employment: Labour calls itself the ‘party of the self-employed’. It plans to strengthen rights, including that to a written contract, and action to tackle late payment.
Family-friendly rights
Flexible working: Labour intends to build on the flexible working policies already introduced by the Conservatives such as enabling flexi-time contracts and hours to suit school-term working.
Parental rights: Labour has committed to reviewing the parental leave system within the first year of government but intends to make it a day one right (see above).
Maternity discrimination: Women returning from maternity leave cannot be dismissed for six months after their return to work (unless there are specific circumstances).
Carers’ leave: The implementation of the Carer’s Leave Act 2024 will be reviewed along with the potential introduction of paid carers’ leave – including how this change might impact small employers.
Bereavement leave: Many employers already give bereaved employees time off, but there is no legislative obligation. Labour intends to introduce the right to bereavement leave for all workers.
Right to switch off: With the increase in working from home, Labour intends to introduce the right to switch off to stop “homes turning into 24/7 offices”. In practice, many employers are already encouraging their employees not to send or respond to emails outside specified times and have amended their flexible / home working policies to reflect this.
Technology and surveillance: Labour’s proposal to ‘put worker voice at the heart of Britain’s digital transition’ will be quite an undertaking given the speed of technological change such as the introduction of AI. Working with various stakeholders, including workers and employers, a Labour government will examine how “to promote best practice in safeguarding against the invasion of privacy”.
Fair pay
Genuine living wage: Labour intends to extend the Low Pay Commission’s remit so that it factors in the cost of living when setting the minimum wage to which all adults, regardless of age, will be entitled. It also intends to enforce the NMW regulations on travel time in sectors with multiple working sites.
Sick pay: The lower earnings limit will be removed so that all workers benefit and statutory sick pay will be strengthened (although it’s not clear what this will look like).
Fair tips: Labour will strengthen the law on the fair distribution of tips but, again, there is no detail on what this will entail, particularly as the Fair Distribution of Tips legislation only comes into effect on 1 July.
Unpaid internships: These will be banned under a Labour government unless part of an education or training course.
Fixing adult social care: An ambitious target, Labour intends to introduce a ‘New Deal for Social Care Workers’ in line with the Resolution Foundation’s recommendations. The first stage will be to establish a Fair Pay Agreement in the sector, following a wide consultation.
Reinstating the School Support Staff Negotiating Body: This body will establish a national terms and conditions handbook, training, career progression, and fair pay for support staff.
Voice at work
Collective bargaining rights: Labour intends to encourage and strengthen these in order to tackle problems of “insecurity, inequality, discrimination, enforcement and low pay.”
Update trade union legislation: Designed to foster a more cooperative approach between trade unions and employers, Labour’s plans include ending “the Conservatives’ scorched-earth approach to industrial relations”. Among other areas, they will address trade union representation in the gig economy, modernise the rules around the recognition of a trade union by workers, require employers to inform employees of their right to join a union, updating regulations governing access to workplaces by trade unions, and updating rules on blacklisting.
Equality at work
Equal pay: Labour proposes to end outsourcing as a means to avoid paying equal pay to women and to set up a regulatory and enforcement unit for equal pay, supported by trade unions.
Terminal illness: Recognising that most employers support terminally ill employees, Labour wants to encourage all employers to sign up to the ‘Dying To Work Charter’ which sets out best practice.
Pay gap reporting: In order to speed up the closure of the pay gap, large firms will have to publish action plans, setting out how they intend to close their pay gap, and include any outsourced workers in those plans. Ethnicity and disability pay gap reporting will also be mandatory for employers with more than 250 staff.
Menopause in the workplace: Employers with more than 250 staff will have to produce Menopause Action Plans, setting out how they intend to support staff going through the menopause. This will be accompanied by guidance to help employers (of all sizes) help their staff.
Rights at work
Enforcement: Labour will set up a single enforcement body to enforce workers’ rights, including the right to inspect workplaces. The body will include trade union and TUC representation.
Employment Tribunals: The proposal to bring employment tribunals ‘up to standard’ includes further digitisation and a strengthening of enforcement to ‘provide quicker and more effective’ resolutions. The time limit for bringing an employment claim will increase from three to six months, allowing more time for internal procedures to be conducted, and thus potentially reducing the number of claims being brought.
Collective grievances: This will enable workers to raise grievances collectively about conduct to ACAS, in line with the existing code for individual grievances.
Safer workplaces: Labour will review health and safety guidance and regulations which will include not just physical safety but also wellbeing and mental health, including protection from harassment.
Summary:
Labour states that they are ‘pro-worker’ and ‘pro-business’ and will ‘work in partnership with unions and business to deliver our New Deal.’ Although at first glance the list of proposed changes looks radical, on further reflection much of what they propose amounts to a strengthening of existing legislation and the extension of rights to groups of workers not currently benefiting. There are some areas, such as trade union reform, which signal a significant departure from the Conservative approach but, overall, the proposals are relatively cautious with the promise to consult with all stakeholders featuring strongly.
There are frequent references to the 2017 Taylor Review, recommendations from which were originally included in the now defunct Employment Bill. Labour have expressed a desire to implement some of Matthew Taylor’s proposed reforms after years of ‘delay and dither’ but also acknowledge that some aspects of their proposals will require a longer implementation period. For now, we can assume that employment matters will continue to dominate the legislative agenda.
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