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Labour’s Vision for the New Employment Law Landscape

May 24, 2024

Only two days ago, a rain-soaked Rishi Sunak, during an unexpected address to the nation from 10 D(r)owning Street, shocked Westminster and set a date for the next General Election. Mark your calendars people! 4 July will be polling day. We obviously won’t know the outcome until then but, in the event that Labour wins the election, there could be many changes ahead, particularly in the world of employment law.

In this blog, I look at some of the proposed reforms the Labour Party has been working on since publishing its Employment Rights Green Paper, “A New Deal for Working People.” Setting out its vision for employment law, Labour has promised to “strengthen workers’ rights and make Britain work for working for people.” And while we wait for greater detail in the coming weeks, there are a number of significant key proposals which would be a departure from current employment law.

So, what do these changes look like?

Key Proposals

1. Extension of unfair dismissal and redundancy rights

Currently, employees can only claim for ordinary unfair dismissal and redundancy pay if they have two years’ service. Labour proposes making the right not to be unfairly dismissed a right from day one of employment. In addition, Labour plan to remove the cap on compensation for unfair dismissal. Will making it more difficult to dismiss employees discourage employers from taking on new employees?

2. Lengthening of tribunal limitation periods

Labour is looking to extend the time period for bringing employment tribunal claims, which is currently three months from the date of dismissal or the date of the act complained of, in general.

3. Broadening of statutory sick pay entitlement

At present, employees have to wait three days before they receive statutory sick pay (SSP). Labour has indicated that it plans to make it a day-one right for all workers including the self-employed. While this is good news for employees, will it encourage persistent short-term absenteeism? 

4. Reforming employment law status

Current employment law distinguishes between three types of employment status – employees, workers and self-employed. As all three tiers have different rights and levels of protection, Labour proposes to create a “simpler framework” in which there would be a single status of ‘worker.’ This will include workers and employees who will be afforded the same basic rights and protections. However, a separate category of the self-employed will remain.

5. Banning zero-hour contracts

In an attempt to secure more predictable working patterns, Labour will ban zero-hour contracts and contracts without a minimum number of guaranteed hours. The party has promised that anyone working regular hours for 12 weeks or more will have the right to a regular contract. Although this could help to protect workers from unpredictable working patterns, as someone who worked a zero-hour contract during my time at University, the flexibility of this type of contract was a godsend during my studies as I am sure it is to many. It will be interesting to see what sort of balance is struck here.

6. Increased wages

Labour has said that it will increase the National Minimum Wage to at least £10 per hour for all workers, and review it to ensure that it is in line with the cost of living. Will this discourage employers from taking on apprentices and younger employees, whose hourly rate is much lower and will that have an impact on the on-the-job training that these types of contracts offer?

7. Introducing a right to ‘switch off’

This will give workers a new right to disconnect from work and not to be contacted by their employer outside of working hours. This will also protect workers from surveillance. This proposal follows the lead of countries like France and Australia, who have introduced similar rights. While this may seem like a good idea in theory, there are arguably question marks as to how practical such a right would be to implement and enforce.

8. Banning ‘fire and rehire’ practices

‘Fire and rehire’ is the practice of dismissing employees who refuse to agree to changes in their contracts and offering to re-employ them on the new terms. Labour plans to ban this practice, and instead improve information and consultation procedures.

9. Greater trade union support

Labour has proposed to offer more support for trade unions using new rights and protections. The New Deal suggests the strengthening of trade unions’ right of entry to workplaces to organise, meet and represent their members and potential members, and to increase the protections for reps against unfair dismissal as well as for union members to prevent intimidation, harassment, threats and blacklisting.

Changes: When It Rains, It Pours

Will all of this happen? Who knows but, as we can see, the Labour-led government could have a significant impact on the current employment law landscape with some pretty substantive changes to our legislative framework. What will this mean for employers? It is hard to say, and time will tell if this will mean increased cost for employers, or the impact on the working relationship, or whether more claims reach the employment tribunal. But one thing is for sure, it’s going to be an interesting 6 weeks as we await to see who forms the next government. So, employers, pay close attention and keep up to date as the general election approaches, and you may just weather the storm.

If you have any questions on this or on any other area of Employment law, please get in touch with the Blackadders Employment team, working in Aberdeen, Dundee, Edinburgh, Glasgow and across Scotland.

The opinions expressed in this site are of the author(s) only and do not necessarily represent the opinions of Blackadders LLP.

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