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What would a Labour Government mean for Employment Law?

On 26 June 2024, the Actons Employment Team held a webinar on what impact a Labour Party victory in the general election would have on employment law. A recording of the webinar can be found here: Webinars | Actons Solicitors.

The Labour Party’s proposals were outlined in their Plan to Make Work Pay and included in their manifesto published in June 2024. The Labour Party stated that they would introduce legislation in respect of employment rights within the first 100 days of office, so some changes could be rolled out relatively quickly. We summarise the key elements of their plans below.

Day One Rights

At present, a person has to be employed for a certain period of time (a “qualifying period”) before they can rely on certain legal rights, for example, for unfair dismissal, an employee must have two years continuous service before they can bring a claim. The Labour Party propose ending the need for a qualifying period in relation to unfair dismissal so that employees could bring an unfair dismissal claim from “day one” of their employment.

Any reduction in the qualifying period required to bring a claim of unfair dismissal is likely to increase the number of claims brought in the employment tribunal, which is already experiencing significant delays under the current legislation. For employers, these changes will underline the importance of having clear and fair reasons for any dismissal and following a fair process when dismissing employees irrespective of their length of service.

Zero hours contracts

A headline grabbing policy has been the proposal to ban “exploitative” zero-hour contracts, although what is meant by exploitative is not clear so further detail would be required before any ban comes into place.

The policy sets out a right for workers on a zero-hour contract to request a contract based on the hours worked within a 12-week reference period, with the aim of providing greater security to workers. The Labour Party has stated that this proposal would not prevent employers from offering workers fixed-term contracts to cover particular work types such as seasonal work.

Employee and worker distinction

The Labour Party also proposes to amend the categories of workers from the three present categories (employee, worker or self-employed / independent contractor) to two categories of worker and self-employed.

The aim of this policy is to simplify worker status and prevent workers from being deprived of legal protections that they are entitled to, however, it is unclear how this will work in practice, for instance in respect of the different tax treatment of each type of worker.

Time limits for bringing claims

Labour proposes to extend the time limit for bringing a claim (of any type) in the employment tribunal to six months. The aim is that by extending the time for bringing a claim, this will assist those who may struggle with the process and allow more time for compliance with any internal procedures. Despite this, any increase in claims is likely to slow down the speed with which the tribunal can process and provide an outcome on any claims, with further funding likely to be needed to prevent more backlogs in the system.

Collective bargaining – role of trade unions

The Labour Party plans to repeal legislation introduced by the Conservative government, which had the effect of increasing the legal turnout required and length of notice to be provided before a strike can take place. They also plan to introduce electronic balloting which would make it easier for employees to vote for (or against) strike action, as well as creating an obligation for employers to notify employees of their right to join a trade union. Additionally, Labour plans to create rights for trade unions to access workplaces in a regulated manner.

All these proposals will have the effect of strengthening the role of trade unions in the workplace and therefore it is important employers engage with unions to create a cohesive working relationship and minimise the potential for disruption.

Fire and rehire

The current position is that an employer can seek to enforce a variation to employment contracts by dismissing employees and offering to re-engage on new terms, where any such contractual variation cannot be agreed. Labour proposes to only allow employers to do this where fire and rehire is necessary for the business to remain viable and there is no alternative. They also plan to repeal the Code of Practice introduced by the Conservative Party.

Whilst there is little detail as to what any strengthened code would include, an adverse impact is that any changes which restrict how a business organises its employees, may encourage businesses to fire employees (with a fair reason) and not rehire, and instead choose to hire new employees on different contractual terms.

Equality proposals

Labour proposes to require employers with more than 250 staff to publish data on ethnicity and disability pay gaps, similar to the requirement which has been in force since 2017 to provide information on gender pay gaps.

The Labour Party also plans to introduce the right to claim for “dual discrimination” where an employee has two protected characteristics, and they believe they have been discriminated against due to both of these. The detail of how this would work has not been set out and raises logistical questions of how such a claim would work.

Creation of a single enforcement body

The Labour Party plans to create a single enforcement body to enforce breaches of regulations relating to work. This body would be separate to the employment tribunals and is likely to focus on enforcing rights in relation to national minimum wage, health and safety, holiday pay and sick pay amongst other issues. The creation of such a body, however, is likely to require significant financial investment which may be difficult to secure when public finances are faced with competing demands.

Threshold for redundancy consultation

Under the current law, employers are required to consult representatives if they are planning on making redundancies of more than 20 of employees at “one establishment”. The Labour Party propose to amend this so that employers are required to consult if they are planning on making more than 20 employees redundant across their business as a whole. A likely impact of this change is that collective consultation is to be required in more scenarios and therefore require increased time from employers.

 

For more information or advice on this or any other Employment Law & HR issue, please get in touch with Nic Elliott (Director & Solicitor – Head of Employment Law) on 0115 9 100 296, or send him an email

Posted on July 11, 2024

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