The Labour Party saw a landslide victory in the 2024 UK General Election, assuming Government again after an absence of 14 years.
‘A New Deal for Working People’, the plan by the Labour Party that was released on 24 May 2024, outlined reforms and legislative changes it intended to bring about within its first 100 days in power.
The King’s speech, during which the new Labour Government’s legislative agenda was laid out, took place on 17 July 2024. The new Employment Rights Bill was announced as part of the speech, and the full details of the Bill are yet to be revealed.
In our June 2024 blog we looked at the potential reforms proposed by the Labour Party. Today we’ll look more closely at just a few of the key reforms they have pledged, and what they could mean for Employers.
A Few Of The Key Potential Reforms
Granting protection of Unfair Dismissal as a day-one right
Presently, Employees must have two years of continuous service to be able to file an ordinary Unfair Dismissal claim. On this basis, Employers have had some flexibility with regards to terminations within an Employee’s first two years of Employment.
However, should protection of Unfair Dismissal become a ‘day-one’ right, as is planned by the Labour party, Employers will need to ensure they have a fair reason to dismiss an Employee, and that a fair procedure is carried out in doing so, regardless of the Employee’s length of service.
If protection of Unfair Dismissal is made a day-one right, Employers will be under greater pressure to make successful appointments, and should a dismissal be necessary, Employers will be under far greater scrutiny for any missteps in procedure from the very start – a relative departure from the flexibility they may have enjoyed with the ‘two-year’ arrangement. Employers may choose to adjust their hiring practices to suit this change in flexibility, as ‘seeing how things work out’ may no longer be a wise option.
Additionally, Labour is proposing to allow Employees 6 months to raise an Unfair Dismissal claim – an increase on the current 3 month period.
With this change in legislation, a surge in Unfair Dismissal claims is expected, although Labour has stated that the day-one right could be subject to a contractual probationary period. On this basis, Employers should examine their probationary period practices, to ensure that they are well suited for securing successful appointments and mitigating the likelihood of Unfair Dismissal claims if things don’t pan out. For example, many Employers set probationary periods of three months – for some Employers, it may be worth considering increasing this timeframe.
Day one rights for Statutory Sick Pay (SSP)
Labour has stated that it plans to extend Statutory Sick Pay (SSP) to all workers, and the current waiting period of 3 days will be removed.
Contracts for individuals working regular hours for 12 weeks or more
Labour stated that it would introduce a right for Employees to have a permanent Contract that reflects the number of hours worked, based on a 12-week reference period.
Banning Zero-Hour Contracts
Zero-hour Contracts have always proved useful for Employers in seasonal industries, as they help them to manage fluctuations in demand. They are also useful to individuals with other working commitments who may require flexibility as a result.
Zero-hour Contracts do bring challenges though, as they come with a lack of security, certainty and opportunities for career progression. Some Employers have been seen to take advantage of these types of Contracts, delivering repercussions to individuals who turn down work when it is offered, leading some to feel forced to work when it may not be suitable or appropriate.
Labour initially proposed a complete ban on zero-hour Contracts, although this has since been updated to focus on new rules to prevent abuse of the practice and exploitative treatment of Employees/Workers.
However, concerns were raised that a complete ban on zero-hour Contracts could have a negative impact on the Employment market, with organisations choosing not to advertise roles for fear that they will be forced to offer permanent Contracts for temporary demands.
Possibly in response to this, the Labour Party backtracked on its statements recently, with Rachel Reeves, Shadow Chancellor at the time, stating “after 12 weeks if you’ve been working regular hours you’ll be able to get that permanent Contract. But if you want that flexibility as a Worker you can remain on the Contract you’re on.”
Merging The ‘Employee’ and ‘Worker’ Status
There are currently three categories of Employment status: Employee, Worker and Self-Employed. UK Statutory Employment protections and Employer obligations differ depending on which category an individual falls under. The Labour Party plans to merge the ‘Employee’ and ‘Worker’ status. If this happens, many workplace rights may apply to larger proportions of an Employer’s workforce than previously.
For example, rights to Unfair Dismissal protection, statutory minimum notice periods, redundancy payments, and many statutory time-off entitlements and family-related benefits currently only apply to Employees.
In the event of the statuses merging, Employers will need to examine the make-up of their workforces and ensure that the appropriate rights and protections are extended to those entitled to it.
Introducing the right to switch off and work autonomously
Labour has stated that Employees and Workers will gain a new right to disconnect from work outside of their working hours, and to not be contacted by their Employer outside of their working hours.
Additionally, Labour plans to introduce new rights to protect Employees and workers from remote surveillance, details of which are to be confirmed.
Conclusion
If just a few of the Labour Party’s proposed changes and reforms take place, they will bring significant changes and implications for Employers.
While some of Labour’s proposals can be acted upon within the 100 days they have promised, it is unlikely that all of the proposals will take effect within that short timeframe. Some will require much consultation. That being said, Employers should not rest on their laurels in preparing their organisations, practices and procedures to reflect the new legislation.
If you need any advice or assistance in preparation for any of the proposed changes, please do not hesitate to get in touch.