Labour Government and Employment Law: Key Issues To Note Ahead of Their First 100 Days

Ahead of the 4th July election, Labour continuously reinforced their commitment to implement their “Plan to Make Work Pay” in an attempt to tackle outdated Employment Laws.

The plan spans over 23 pages, the key proposals which we are likely to see be introduced were set out by Labour in the King’s Speech on 17 July, 2024.

The legislative agenda aims to “ban exploitative practices and enhance employment rights”.

Below is a summary of the Prime Minister's briefing note and Labour’s Plan to Make Work Pay. We now await the Employment Rights Bill to know for sure that all aspects of the Plan are listed, or indeed if any of the aspects have been dropped.

Trade Unions and Collective Consultation
Labour‘s “voice at work” section of the plan centres around the idea of bringing in a new era of partnership by:

• Repealing the minimum service levels in relation to industrial action as per the Minimum Service (Strikes) Act.
• Repeal the Employment Agencies and Employment Business (Amendment) Regulations – the High Court quashed the Regulations in 2023 and so they are not currently in force however have remained in statute.
• Reversing the changes made under Trade Union Act 2016: increase in ballot turnout; additional information for ballot papers; 6 month mandate for strike action; and two weeks’ notice of industrial action (whereas previously it was one week).
• Unions will be allowed to ballot members electronically, in addition to ballot via post.
• Simplifying the process of statutory recognition for trade unions
o For example, Unions will no longer be required to show that 50% or more of their workers are likely to support their claim before the process begins, and Unions will no longer be required to obtain simple majority on the final ballot.
• There will be additional rights for trade unions to access workplaces to recruit and organise; Union reps to meet, represent, recruit and organise; ensure appropriate facility time; strengthen protections against unfair dismissal, threats and blackmailing.
• Introducing a new duty on employers to inform all new employees of their right to join a union on a regular basis as well as putting this in their contract of employment.

New Day One Rights
Labour plans to introduce new ‘day one rights’ for all workers. These will be basic individual rights on parental leave and sick leave and protection against unfair dismissal for all workers on ‘day one.’

Fair dismissal will not be prevented, e.g. dismissal for capability, conduct, redundancy, or probationary periods with fair and transparent rules and processes.

Flexible working will also become the default for all workers from day one, employers will be required to accommodate this as far as reasonably possible.

Fair Pay
Labour also intend on strengthening statutory sick pay by removing the lower earnings limit and waiting period to ensure that all workers will be able to receive it. They also intend to provide fair earnings replacement for people earning below current rate of statutory sick pay.

It is also planned that a Fair Pay Agreement will be introduced to the adult social care sector.

Genuine Living Wage
In addition to the Bill, Labour intends to create a “genuine living wage” to account for the cost of living. They will do this by:

• Changing the remit of the Low Pay Commission to take into account the cost of living when setting rates, in addition to median wages and economic conditions
• Removing age bands so that everyone aged 18 and over will get the same hourly rates of pay
• Ensuring that workers who work across multiple sites receive the National Minimum Wage for their travel and that this is reflected in their contract.

They plan to work with the Single Enforcement Body and HMRC to ensure that they have the powers necessary to make sure Labour’s genuine living wage is enforced, there will be penalties for non-compliance.

OTHERS
Zero Hour contracts are to be banned, to ensure that workers have a right to a contract that reflects the hours that they regularly work. This is to end the one sided flexibility and ensure all jobs provide a baseline level of security and predictability. The proposals so far reflect some of the recommendations that were previously made in the 2017 Taylor Review of Modern Working Practices.

‘Fire and Rehire’ and ‘Fire and Replace’ schemes are to be reformed by the Employment Rights Bill and replace the statutory code introduced by the Conservative government – which came into force on 18 July, 2024.

Worker Status is also subject to change, with Labour planning on abolishing the three separate status of employment: employees, workers, self-employed and plan to move towards a single status of worker. Labour have acknowledged that this will take some time and we therefore do not expect to see the change come in to place straight away.

The Labour Government has intentions of providing further protections for women returning from maternity leave by proposing to make it unlawful for an employer to dismiss a woman who has had a baby for a period of six months after she returns to work. There will be certain exceptions to this, which are yet to be set out.

Establish a new single Enforcement Body, coined as the Fair Work Agency to enforce workplace rights and levy fines.

The Labour government has also committed to improve and strengthen enforcement through Employment Tribunals to provide quicker and more effective resolutions. Employers should note that Labour have intentions to increase the time limit within which employees can bring a claim from three to six months.

A draft Equality (Race and Disability) Bill proposes to “enshrine a full right to equal pay law” for disabled people and ethnic minorities. The bill also proposes mandatory ethnicity and disability pay gap reporting.

The Employment Rights Bill will be introduced by the 4 October, 2024 and once this Bill has been introduced, we will let you know exactly what is being proposed.