Employment Law: What to expect from the new Labour Government.
Now that the Election is over what does the new Government have in store for employers and employees? If Labour enact their manifesto pledges, where they made several commitments to change or update multiple aspects of employment law, then changes are coming.
So what does this mean for organisations and businesses? New Dawn has taken a look at all their pledges and here we present our summary of what to expect.
What changes might we see in employment law?
- Labour have published their plan to “make work pay” which is described as “a new deal for working people”. The planned changes cover a wide range of employment practices and include:
- Removing the age bands for National Minimum Wage and having a single, adult National Minimum wage that takes into account cost of living. Requiring employers to pass 100% of tips on to their staff.
- Removing the waiting days for Statutory Sick Pay and removing the requirement to earn more than the National Insurance lower earnings limit in order to qualify for SSP.
- Introducing paid bereavement leave. The duration of leave and amount of pay has not yet been specified and nor has the categories of personal relationships to which it will be applied.
- Removing the requirement for an employee to have 2 years’ service in order to claim unfair or constructive dismissal, making this a day 1 right. The commentary around this proposed change indicates that employers may retain the right to fairly dismiss someone within their contractual probationary period.
- Removing the distinction between “employee” and “worker”. Now, employment law recognises three distinct categories of staff: employees, workers and self-employed. Tax law recognises only employees and self-employed. Workers have greater flexibility and are subject to fewer controls, but the trade-off is that they also have fewer rights – this may be an unattractive deal for many. Labour plan to align employment and tax law, such that there are only two categories of staff: employees and self-employed.
- A tightening up on regulations around zero-hour contracts. The intention is to use a worker’s average hours over a 12 week period to provide a base level of security and predictability of hours. There will also be a requirement for a minimum period of notice when changing or cancelling shifts, with a requirement to pay compensation where minimum notice is not provided.
- Furthering the rights of employees to work flexibly. The Conservative government recently amended legislation to enable employees to request a flexible working arrangement as a day 1 right but employers can still refuse a request where there are good business reasons for doing so. The Labour party have stated an intention to go further, in making flexible working arrangements a default requirement except where it is not reasonably feasible. They will also introduce a right to “switch off”.
- Making it unlawful to dismiss a woman who is pregnant, on maternity leave or in the six months following return to work from maternity leave – other than in specific circumstances. Labour also plans to review family leave arrangements, which may mean we see changes to maternity/ adoption/ paternity/ parental leave in coming years.
- A ban on fire and rehire practices. These practices are used when introducing changes to terms and conditions, where changes can’t be negotiated and agreed, some businesses use fire and rehire to issue an ultimatum. This is not something we would advocate for our clients to do.
- A change to collective redundancy consultation rules. Now, the requirement to engage in collective consultation for a minimum period of 30 days only applies where it is proposed that 20+ roles may be redundant within one workplace. The intention is to amend this so that the requirement for collective consultation is triggered where it is proposed that 20+ roles may be redundant across the whole business.
- Extending the requirement for pay gap reporting to include ethnicity pay gap reporting and disability pay gap reporting.
When will we see a change?
Labour have said they plan to introduce new legislation within 100 days of entering government, which means by 12th October 2024.
Some of the planned changes could be introduced with very little legislative change, for example increasing the National Minimum Wage rate and requiring employers to pass tips on to staff (this latter change has already been covered in legislation introduced by the Conservative government and is due to come into force in October 2024, regardless of who won the election). They may also move to review the rates twice yearly – April and October.
In theory, the removal of the requirement for an employee to have 2 years’ service in order to claim unfair or constructive dismissal could also be introduced very quickly, though Labour may wish to consult over the impact of this before moving ahead.
For other changes, the 100 day timetable is ambitious when you consider the states that the new legislation will need to go through:
- They’ve stated an intention to consult with businesses and workers before implementing changes.
- After consultation, draft legislation will need to work its way through the House of Commons and House of Lords before it is passed.
- Then, further work will be required to draft secondary legislation and codes of practice to implement the legislation.
Traditionally, changes to employment law are introduced in April or October. If Labour acts quickly, we may see some changes coming into force in October 2024, but the larger changes may be delayed to April 2025 or beyond.
As always, we will keep an eye out for updates and share the latest information with you.
For more information contact one of our business partners: [email protected]
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