The votes have been counted and it is clear, Britain has a new Labour government, so what does this mean for employment legislation?
Before their campaign and published manifesto, Labour had published their “Labour’s plan to make work pay: Delivering a New Deal for Working People”. This document sets out how Labour wants to change the employment landscape by introducing and changing legislation. Labour in their manifesto have committed to deliver on this when they are in power, including introducing some new legislation within their first 100 days.
It is unclear what legislation they will tackle first and when this would be applicable, but as always, we at Roots HR will keep a close eye on this and inform the sector through our blogs and free webinars.
So what are the main changes employers expect to see changed under the new Labour government:
Single status of a ‘worker’
Currently, there are 3 categories of workers:
- Employee
- Worker
- Self-Employed
Often, there is confusion about which category applies to people, especially between worker and employed. Yet, the distinction is important as each category comes with different rights and responsibilities.
Labour have vowed to remove the distinction between worker and employee and introduce one single category for this, while keeping the self-employed status. It has committed to consulting with businesses to how this can be facilitated in an effective way.
A ban on zero-hour contracts
Labour has committed to end ‘one sided’ flexibility and provide workers a baseline level of security and predictability and ensure that workers have a contract based on the number of hours they regularly work over a reference period of 12 weeks.
Whether this will affect existing zero-hour contracts is to be seen, but from September 2024, employees/workers will gain the right to request a more predictable working pattern already, which will give workers greater power over the predictability of their working hours.
Ending the ability to fire and rehire
This is not a common practice in the social sector but refers to the process whereby an employer can force a change to employees’ terms and conditions of employment (T&Cs) by dismissing the employee, if they refuse the new T&Cs, and seeking to rehire them as an alternative on typically less favourable terms and conditions.
This practice is already poses risk, but where employers can argue successfully that the changes were reasonable an employee would take a big risk claiming unfair dismissal (and leaving their employed role) to argue their case.
Labour has said that they will put in place legislation that will outlaw this practice to ensure that employees are protected from this practice.
Abolishment on the age categories on the National Minimum Wage
Labour has pledged to revisit the national minimum wage and change this to a Genuine Living Wage. Furthermore, they have said that they will remove the age bands to ensure that all adults have access to the same minimum wage. Currently, there are 2 bands for adults as the last government already removed the middle band in April 2024.
Introduction of Race Gap reporting
Similar to Gender Pay Gap reporting, large employers will be required to submit race gap salary data, with smaller employers being able to do this on a voluntary basis.
Unfair dismissal from day 1
Currently, employees must be employed for 2 or more years before they can claim unfair dismissal at an Employment Tribunal. Labour is planning to reduce this length of service requirement.
It is not expected that this will be a day 1 right, to allow for probation periods, but we will update clients and those on our mailing list once we know more.
Parental leave from day 1
Although the plan by Labour is somewhat ambiguous on this point, it appears to state that they will ensure that employees will not have to wait 26 weeks before they become eligible for parental leave.
Currently, maternity and adoption leave are already available to all employees from day 1, but statutory pay only becomes available after 26 weeks of continuous employment (although if an employee becomes pregnant in their 2nd week of employment, they would be entitled as well).
It is yet to be seen exactly what Labour is planning here and whether they will change the way statutory pay is applied as well.
Right to switch off
Finally, Labour has said that they have plans to introduce legislation that forces employers to allow employees to fully ‘switch off’ outside the contracted working hours.
It does appear from their plan that a level of discretion is allowed to ensure that employers can still deal with emergencies where needed by allowing this to be discussed and agreed between employer and employee.
Adult Social Care
Labour has also vouched to fix adult social care by improving working conditions for Social Care Workers.
Labour has said that they will produce and consult on a ‘Fair Pay Agreement’, talking to trade unions and employees on ensuring that they have a better deal and produce essentially a type of collective bargaining agreement for this sector.
This will have an impact on many of our clients, so we will keep an eye out for developments on this.
Many more changes
Labour has also vowed to tackle or improve many more employment practices such as equal pay, sickness leave and pay provisions, menopause action plans, improved employee rights at work, increasing employee’s ‘voice’ at work, and an improved employment tribunal system.
Labour has also pledged to introduce a single enforcement body for worker’s rights, which will also support organisations to remain compliant and will likely be similar to the role the ICO has for data protection.
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With a new government direction since 2010 and the aftermath of Brexit, we expect the coming years to see more changes happening to legislation that impact employment. At Roots HR CIC, all our consultants stay up to date with the latest and upcoming changes, so we can inform and support our clients in the best ways possible.
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