Labour’s New Deal for Working People

The Labour party has published its Plan to Make Work Pay: Delivering a New Deal for Working People setting out it plans for reforms to employment laws. If elected, it will introduce an Employment Rights Bill into Parliament within 100 days of entering government to deal with some quick fixes, such as removing the lower earnings limit for Statutory Sick Pay and creating a single enforcement body for employment rights. Other plans include removing the qualifying period for some employment rights, ending fire and rehire practices, reviewing parental leave, banning zero hours contracts and moving towards a single worker status.

Here we look at some of the proposals in more detail. Many of these will be familiar, reflecting recommendations of the 2017 Taylor Review which considered the implications of new models of working, including those used in the gig economy, on the rights and responsibilities of workers.

Basic day one rights

Labour will remove qualifying periods for basic employment rights, including the two year qualifying period for unfair dismissal claims, the qualifying period for parental leave and the three day waiting period for Statutory Sick Pay.

It says that removing the unfair dismissal qualifying period will not prevent employers using probationary periods to assess new hires, but employers will need fair and transparent rules and processes so that new hires are not fired without reason or cause.

Employment tribunals

Labour will extend the time limits for bringing employment tribunal claims from three months to six months and will work to further digitise employment tribunals.

Fire and rehire

Labour will end fire and rehire practices as a lawful means of changing employees’ contractual terms and reform the law to provide effective remedies. It will replace the Dismissal and Re-engagement Code of Practice which is coming into force on 18 July with a strengthened Code of Practice. It recognises the importance of businesses being able to restructure to remain viable where there is genuinely no alternative but says “this must follow a proper process based on dialogue and common understanding between employers and workers.”

Zero hours contracts and one-sided flexibility

Labour plans to ban zero hours contracts and give workers the right to a contract reflecting the number of hours they regularly work, based on a 12 week reference period. Workers will also be entitled to reasonable notice of any change in shifts or working time, with compensation proportionate to the notice given for any shifts cancelled or curtailed.

Workers will continue to have the right to be paid overtime and employers will still be able to offer fixed term contracts, including seasonal work.

The Conservative government passed legislation giving workers the right to request a more predictable work pattern which was expected to come into force in September 2024. Labour’s proposals go further and it is not clear whether Labour would implement this legislation, if elected.

Single enforcement body

A single enforcement body will be established to enforce workers’ rights, with strong powers to inspect workplaces and take action against exploitation. The body will have trade union and TUC representation and will be given powers to undertake targeted and proactive enforcement work and bring civil proceedings upholding employment rights.

Genuine living wage

Labour will change the remit of the Low Pay Commission (LPC) so that alongside median wages and economic conditions, the LPC will also need to take the cost of living into account when advising on the national minimum wage.

Labour will also remove the national minimum wage age bands which provide for different rates dependent on age and work with the single enforcement body and HMRC to ensure they have the necessary powers to enforce the national minimum wage, including powers to impose penalties for non-compliance. It will also work with HMRC and the single enforcement body to ensure that national minimum wage laws on travel time in sectors with multiple working sites is enforced and that workers’ contracts reflect the law.

Sick pay

Labour will strengthen statutory sick pay, removing the lower earnings limit so that it is available to all workers irrespective of how much they earn and removing the three day waiting period before a worker becomes entitled to statutory sick pay.

Unpaid internships

Labour will ban unpaid internships except when they are part of an education or training course.

Pay gap reporting

Employers with more than 250 employees will be required to publish their ethnicity and disability pay gaps, mirroring the requirement to report on gender pay gaps.

Large firms will also be required to develop, publish and implement action plans to close their gender pay gaps, and ensure outsourced workers are included in their gender pay gap reporting.

Menopause action plans

Employers with 250 or more employees will be required to produce menopause action plans setting how they will support employees through the menopause. Guidance will set out measures to consider relating to uniform, temperature, flexible working and recording menopause-related leave and absence.

Flexible working

Labour will build on the recent changes to flexible working which came into force on 6 April and provided the right to request flexible working from the first day of employment. It says it will make flexible working the default from the first day of employment for all workers, except where it is not reasonably feasible.

Parental rights

Within the first year of government, Labour will review the parental leave system and ensure that parental leave is a day one right.

It also plans to make it unlawful to dismiss a woman during pregnancy or within six months of her return to work, except in specified circumstances. This goes further than the additional redundancy protections that came into force in April under which employers must offer any suitable available vacancy to pregnant women and new parents who are at risk of redundancy.

Single status of worker

Labour plans to remove the current three-tier system for employment status, where people are classified as employees, workers or self-employed, with the level of employment protection afforded dependent on their status. It will instead move towards a two-tier framework differentiating only between workers and the genuinely self-employed. It will also strengthen rights and protections for self-employed workers, giving them the right to a written contract, which would benefit freelancers, and extending health and safety and blacklisting protections.

Redundancy rights and TUPE

Currently collective redundancy obligations apply where an employer proposes 20 or more redundancies “at one establishment” in a period of 90 days or less. Labour will strengthen this and ensure that the right to collective redundancy consultation is determined by the number of people impacted across the business, rather than in one workplace or establishment.

Whistleblowers

Labour will strengthen protection for whistleblowers, including by updating protection for women who report sexual harassment at work.

Harassment

Under its New Deal, Labour will require employers to create and maintain workplaces and working conditions free from harassment, including by third parties. As regards tacking sexual harassment, it says it will strengthen the legal duty for employers to take all reasonable steps to stop sexual harassment. This is a reference to the new duty to take reasonable steps (not all reasonable steps) to prevent sexual harassment of employees in the course of their employment. Under the terms of the Worker Protection (Amendment of Equality Act 2010) Act 2023 this duty comes into force on 26 October 2024, but the duty is meant to be supported by an updated statutory Code of Practice from the Equality and Human Right Commission which still requires consultation and Parliamentary approval, so it is unclear whether the duty will come into force as planned.

The Conservative Government had originally planned to re-introduce employer liability for harassment by third parties, such as clients, customers or visitors but dropped these plans as the legislation was going through the parliamentary process.

Carer’s leave

Employees became entitled to one week’s unpaid carer’s leave from April this year. Labour proposes to review this policy and examine the benefits of introducing paid carer’s leave, while being mindful of the impact of any changes on small employers.

Bereavement leave

Labour will introduce the right to bereavement leave for all workers.

New right to switch off

Recognising that flexible and remote working practices have blurred the lines between work and home life, Labour will introduce the “right to switch off”, following models that are already in place in Ireland and Belgium. This means giving workers and employers the opportunity to have constructive conversations and to work together on bespoke workplace policies or contractual terms that benefit both parties.

Technology and surveillance

Labour will work with workers, unions, employers and experts to examine what AI and new technologies mean for work, jobs and skills and how to promote best practice in safeguarding against invasion of privacy through surveillance technology, spyware and algorithmic decision making. As a minimum, it will ensure that proposals to introduce surveillance technologies would be subject to consultation and negotiation, with a view to agreeing them with trade unions or elected staff representative where there is no trade union.

Trade unions

Labour will repeal the Trade Union Act 2016 which placed restrictions on organising lawful industrial action, including increased ballot thresholds, information and timing requirements and legal requirements on unions to supervise picketing. It will also repeal the Minimum Service Levels legislation which came into force in 2023.

It will also allow unions to use secure and private electronic balloting in place of postal ballots, simplify the statutory recognition process, give unions a reasonable right of access to workplaces, introduce a new duty on employers to inform workers of their right to join a trade union, provide increased rights and protections for trade union representatives undertaking their work and modernise backlisting laws.

As always, the devil will be in the detail and at the moment a lot of the detail is lacking. What is clear, however, is that if Labour is elected at the general election on 4 July, there are likely to be significant changes to employment law, both in the immediate and longer term.