What a Labour Government means for employment law

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On Friday 4th July, Sir Kier Starmer and his Labour Party were elected to govern the UK. The election of a Labour Government marks a new chapter for England, Wales, Scotland and Northern Ireland after 14 years of Conservative rule. We have already seen big changes, including scrapping the Rwanda asylum scheme, but what about employment?

In this blog, our employment lawyers look at what changes Labour may or have already implemented, and how these will affect employers and employees across the UK.

Labour’s promise for UK employment

Labour’s manifesto was to kickstart economic growth by reforming Britain’s economy and bringing about a decade of renewal.

The keyword within their manifesto was ‘change’, so it’s no surprise that there was a long list of key proposed changes for employment law, including:

Read Labour’s ‘new deal for working people’ here.

A day-one right to claim unfair dismissal

The Labour Party indicated that it intends to allow employees to bring unfair dismissal claims from day one of their employment. Currently, employees need two years’ service to claim unfair dismissal.

Whilst this would be a huge change, Labour stated it would still be possible for employers to dismiss employees during their probationary period fairly. However, it is unclear whether there would be limits on the length of probationary periods. Furthermore, it is unlikely that a probationary period of two years will be allowed. If this change is implemented, employers will need to review their employment contracts to ensure they cover probationary periods and that there is a provision to allow them to extend the probationary period in circumstances where this is required.

Statutory Sick Pay

The Labour proposals may remove the four-day waiting period so that SSP can be paid from day one of sickness (at present, employees are paid SSP after they have had three sick days). This change will increase employers’ costs and may increase short-term absence levels.

If this change happens, it will be very important for employers to have back-to-work meetings with employees after all sickness absences to monitor absence levels accordingly.

The right for employees to ‘switch off’

Labour first discussed this in its Green Paper in 2021, with a promise to bring in the ‘right to switch off’. This would give employees the right to ‘disconnect from work outside of working hours and not be contacted by their employee’.

It will be interesting to see how it works in practice. If this is introduced, it will be important for employers to set out what working time is in their contracts of employment and update their flexible working policies.

A ‘genuine’ living wage

The last Labour Government created the National Minimum Wage, but the Party recognises that there is still work to be done to ensure this reflects the current cost of living.

Sir Kier Starmer wants to remove the age bands and work with the Single Enforcement Body and HMRC to ensure a genuine living wage is properly enforced, including penalties for non-compliant employers.

Labour will also ensure the National Minimum Wage regulations for travel time for those working across multiple sites are enforced and that employment contracts reflect this.

There is not much that employers can do to prepare for this, but you should be ready to amend your contracts if these changes become law.

What about carers?

Unlike the Liberal Democrats, whose manifesto made several mentions of carers’ rights, the Labour Party hasn’t said much about how they will support carers, other than that they will review the legislation that was introduced in April 2024.

The end of ‘fire and rehire’

‘Fire and rehire’ (or ‘dismissal and rehire’) is where an employer makes an employee redundant but offers them employment under new reduced and unfavourable terms. It is a controversial but not illegal process that is used as a negotiation tactic and should only be used as a last resort (the first resort being a consultation process).

Labour pledged to remove ‘fire and rehire’ and ‘fire and replace’, reassuring employees that they can negotiate their terms of employment in good faith and without feeling under threat of dismissal.

The right to join a union

Labour wishes to introduce a new duty for employers to inform new employees of their right to join a union. They also want to put the onus on employers to inform and remind staff of this right regularly.

Zero-hour contracts

Labour pledged to end ‘one-sided’ flexibility and ensure all jobs provide workers with a baseline level of security and predictability. To achieve this, they will ask employers to include the number of hours employees regularly work in their contract, based on a 12-week reference period.

Workers will also receive ‘reasonable’ notice of any change in working hours and be given compensation for shifts that are cancelled or reduced. Workers will retain their right to be paid for overtime.

If you are a business owner or employer who employs people on zero-hour contracts, you will need to review and amend your contracts once this becomes law. This may also apply to contractors or self-employed workers that you employ, so you will need to review any service agreements you have in place.

Self-employed workers

Labour also mentioned that they want to strengthen the rights of self-employed workers, including the right to a written contract, extending health and safety rights and revising trade union rights.

Working parents

Like flexible working arrangements, most employers accommodate the needs of working parents, however, Labour recognises that the current parental leave system needs to be improved. They want to make parental leave a day-one right and make it unlawful for employers to dismiss a pregnant woman for six months after her return to work, except in certain circumstances.

What about the cost of childcare?

Sir Kier Starmer recognises that employment rights aren’t the only concern for working families; childcare costs are a real issue for parents and those working in childcare settings.

Labour back the childcare expansion plan currently being rolled out (30 hours of free childcare a week for children aged nine months and over). They have also pledged to introduce free breakfast clubs at every primary school in England.

Menopause in the workplace

Employers with more than 250 employees will be asked to produce Menopause Action Plans, setting out how they will support employees through menopause. Labour will also publish guidance for smaller employers, including recommendations about menopause-related leave and flexible working.

The stigma surrounding menopause is gradually being reduced and many employers are implementing changes to better support those in their workforce who are affected by the physical and mental effects that menopause can bring. A menopause policy is a good place to start, whether or not Labour’s plans come to fruition. For advice on writing or updating your policies, get in touch with our employment law solicitors.

Timelines

With Labour’s Government only in its first few weeks, we do not yet know the timelines for the above changes. In its manifesto, Labour repeated its pledge to introduce legislation within its first 100 days in office.

The King’s Speech on 17th July introduced an Employment Rights Bill to ban the ‘exploitative’ use of zero-hour contracts and introduce new workers’ rights mentioned above. The speech also mentioned a Race Equality Bill which will extend the right for ethnic minority and disabled workers to make an equal pay claim under the Equality Act, and introduce new pay reporting requirements for large firms.

Further information

Whether you are an employer or an employee, our employment law solicitors are here to help. For common-sense advice about anything employment-related, get in touch by calling 0117 325 2929 or filling out our online enquiry form.

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