Will Labour's Plan Make Work Pay?

Buckle up because if Labour wins the next election, we’re in for a bumpy ride with proposed changes to employment law. With promises of sweeping reforms, a new Employment Bill is set to be debated within 100 days of them taking power.

Here’s a light-hearted look through Labour’s new deal for working people "Labour's Plan to Make Work Pay" (the “Plan”) – and a few tips to help you stay ahead of the game.

1. Employment Status: Three’s a Crowd
Labour is suggesting a new two-tier system, simplifying the current categories of employee, worker, and self-employed. Most current ‘workers’ would receive the same rights as ‘employees’ – think sick pay, holiday pay, maternity pay, unfair dismissal protection, and redundancy pay. The gig economy (we’re looking at you, Uber) could be in for a ride. However, the Plan indicates that Labour will consult on how to transition to this new system, meaning changes are unlikely to be immediate. No need to Uber-react for now.

No urgent action required here but keep an eye on this space. It’s likely to cause some headaches down the road.

2. The Right to Disconnect: Or Not?
Europe’s been buzzing about the right to disconnect, and it looks like Labour wants in on the action. They propose giving workers the right not to be contacted outside working hours. However, the Plan wording suggests that Labour’s initial enthusiasm for a robust ‘right to switch off’ might be dimming, encouraging employers and employees to discuss bespoke policies rather than a blanket right. So, while we may not see a strict right to disconnect, a code of practice might be on the cards. Trade Unions are already feeling short-circuited by this, so expect some back-and-forth before anything concrete happens. Stay tuned!

3. Expanding Day One Rights – Ready, Set, Rights!
Labour plans to scrap the qualifying period for basic rights like unfair dismissal, sick pay, and parental leave. This means that your new hires could be protected from day one. The Plan states rights from day one but with fair and transparent probationary periods.

TIP 1: Review your probationary period clauses. A lengthy, robust clause (6 months with a possible 6-month extension) could be your new best friend. But beware of scaring off top talent with excessively long probation periods.

TIP 2: Tighten up your performance management processes. Robust systems are your shield against poor performance.

TIP 3: Consider your recruitment practices. Avoid hiring in haste to repent at leisure.

4. Discrimination: Equal Footing for All
Labour aims to tackle discrimination head-on with a series of measures, including mandatory ethnicity and disability pay gap reporting and addressing dual discrimination. They also plan to crack down on third-party harassment.

TIP 4: Larger Companies should start monitoring ethnic pay gaps now. Gather data, review pay structures and get ahead of the curve.

5. Tribunal Time Limits
Labour aims to extend the time limits for bringing claims to Employment Tribunals to six-months. They also intend to enforce tougher penalties for non-compliance, it has been bandied about that directors may be personally liable for unpaid tribunal awards, although this is not directly mentioned in the Plan.

TIP 5: Check your directors’ liability insurance to ensure it covers personal liability for unpaid tribunal awards.

6. Ending Fire and Re-Hire: Extinguishing the Practice?
Labour aims to ban the controversial practice of firing and rehiring. While the Plan suggests a strengthened code of practice rather than an outright ban, the final stance is still in the balance.

TIP 6: If you’ve got no choice but to dismiss and re-engage staff, act now before Labour's reforms make it more difficult.

7. Banning Zero-Hour Contracts: Time's Up!
Labour’s pledge to ban zero-hour contracts makes a great headline, however what the Plan actually says is that it will ban “exploitative” zero hours contracts. What this means in practice is that workers will have the right to request a contract reflecting their actual work hours. It could end up being a bit like the flexible working rules – where employers can still say no.

8. Trade Union Law: Power to the People
Labour is putting trade unions front and centre, with plans for fair pay agreements and strengthening union rights. This includes repealing the Trade Union Act 2016 and introducing measures to ease union recognition and operations.

9. Other changes
Expect increases in statutory sick pay, a ban on unpaid internships (unless part of an education course), paid travel time for sectors with multiple work sites, action on sleepover hours, protection against workplace surveillance, and extended protections for pregnant workers.

While these proposed changes might seem like a rollercoaster, staying prepared will help keep your business on track. Remember that any changes will take time to implement, so don’t panic.

Feel free to contact us if you need help navigating these potential changes. And who knows? Maybe another party will win, or we could have a coalition to contend with!