Labour’s Plans for Employment Law

On 24 May 2024, the Labour Party published its plan for employment rights which they call “Labour’s Plan to Make Work Pay.” The proposals are comprehensive, with Labour pledging to strengthen workers’ rights if it wins the General Election on 4 July 2024.

We have summarised below the plans that have been announced, which are intended to be introduced into law with the first 100 days of a Labour government:

  1. Day-One Rights for Unfair Dismissal

Labour plans to remove the two year qualifying period before employees can claim unfair dismissal rights and make it a day one right instead. However, they have said that probationary periods will be exempted but we do not know yet how long a probationary period will be allowed to be.

  1. Extending the Limitation Period in the Employment Tribunals

Labour proposes extending the time limit for bringing Employment Tribunal claims from three months to six months.

  1. Changes to Zero-Hour Contracts

To address “one-sided flexibility”, Labour suggests that everyone shall have the right to a contract that reflects the number of hours they regularly work, based on a twelve-week reference period. The Labour Party have suggested that their plan does not prevent employers from offering fixed-term contracts, including seasonal work. Employers will have to provide their workers with reasonable notice of any cancellation or shift changes and where reasonable notice is not given, pay their workers the wage they would have received had the shift not been cancelled. It has been suggested that these proposals will provide workers with greater predictability and security in their income so they can plan their finances.

  1. Restrictions on “Fire and Rehire”

“Fire and rehire” is the practice of an employer dismissing the employee and then re-engaging them on revised terms and conditions. The Labour Party seeks to limit this practice, allowing it only when no genuine alternative exists. They plan to strengthen the existing code of practice and introduce effective remedies against its abuse, thus restricting but not banning the practice.  Some may suggest this is not significantly different from the current rights.

  1. Redundancy Rights and TUPE

Labour intends to bolster protections around redundancy and TUPE (Transfer of Undertakings (Protection of Employment) Regulations). They plan to effectively reverse the Woolworths case so that consultation obligations are triggered by the total number of redundancies across a business rather than just those within a single workplace or establishment.

Additionally, Labour intends to extend the TUPE rules to workers, giving them the same transfer rights as employees.

  1. Single Status of Worker

Labour intends to simplify the employment classification system by reducing the categories to worker and self-employed only. They believe the current three-tier system (employees, self-employed, and workers) has led to some employers exploiting their legal framework and denying people their legal rights. The Labour Party plans to launch a consultation on creating a single “worker” status to encompass everyone, apart from those who are genuinely self-employed. The intention is to remove any ambiguity between the definitions of an employee and a worker. The Labour Party have acknowledged that this particular area of their plan will take longer to review and implement.

  1. Update Trade Union Legislation

Labour intends to remove unnecessary restrictions on trade union activity and ensure industrial relations are based on good faith negotiations and bargaining. They plan to revoke anti-strike legislation and enhance trade unions’ rights to engage with on-site workers.

  1. Flexible Working

The Labour Party proposes to make flexible working the default for all workers. This issue is already on the Conservative Party’s radar following the introduction of day one flexible working rights from April 2024. The existing policy allows workers to submit a flexible working request from day one of employment. It is not obviously clear what the difference will be.

  1. The Right to Switch Off

Drawing on models from Ireland and Belgium, Labour plans to implement a “right to switch off”, giving workers the right not to work outside their regular working hours routinely and not to be penalised for refusing to attend work outside of normal hours. Employers will be required to respect this boundary between work and personal life.

  1. Pay Gap Reporting

Labour proposes that large companies must not only report their gender pay gap but also create action plans to close the gap. Additionally, ethnicity and disability pay gap reporting would become mandatory for larger companies with over 250 employees.

  1. Strengthen Family Friendly Rights

The Labour Party promises a review of parental leave within its first year and aims to introduce the right to bereavement leave for all workers. It will also make it unlawful to dismiss a pregnant woman for six months after her return to work, except in specific circumstances.

  1. Other Proposals

Labour intends to strengthen whistleblowing protections, especially for those reporting sexual harassment. Labour also seeks to broaden the Low Pay Commission’s remit so that, alongside median wages and economic conditions, the national minimum wage would also take into account the increase in the cost of living. They propose abolishing the earnings threshold for sick pay, making it universally available.

The Conservative Party has not yet released their employment plans. We will continue to monitor the developments from both parties’ manifestos and their potential impact on employment law.

While the outcome of the election is not yet known, and no one can be sure whether the precise announced plans will become actual law, employers should take customised steps to ensure they are prepared for future developments. Our team at Herrington Carmichael LLP can assist with these initial deliberations and preparations. Please contact us to speak to a member of our Employment Team.

Darren Smith
Partner, Employment
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This reflects the law and market position at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought in relation to a specific matter.

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