New Labour Government: What Does It Mean For Employment Law? 

The Labour Party manifesto proposed numerous changes to employment law and promised to bring in reforms within 100 days of their election. We will update you on the detail of the reforms and the timeframe as matters become clearer. In the meantime, we summarise some of the key proposals.

Day 1 rights for unfair dismissal (subject to probationary period), parental leave and sick pay

Under the current law, an employee in most cases (not all) needs 2 years’ service to claim unfair dismissal. Labour proposes there will be no 2 year qualifying service requirement to claim that the dismissal was unfair, though separate rules will apply during probation periods.

There are also proposed changes for other “day 1 rights”. Parental leave will become a day one right with the one-year qualifying period being removed. Statutory sick pay changes propose to remove both the 3-day waiting period and the lower earnings limit.

Zero hour contracts

New rules are planned to prevent the abuse of zero hours contracts. Worker contracts will have to provide for regular hours over a 12-week reference period. 

Fire and rehire 

“Fire and rehire” occurs where an employer terminates a contract of employment and re-engages the employee on less favourable terms. Labour’s proposal is to only permit firing and rehiring where there is “genuinely no alternative”.

Employment status

Employers and workers are currently distinct categories of employment status, though the lines often blur in practice. Workers enjoy less employment rights than employees.  

Labour proposes that the distinction between workers and employees is abolished, and for workers to assume the same rights as employees. 

Labour proposes to give the self-employed enhanced rights, such as the right to a written contract, extended health and safety rights, and the right to take action against late payments. 

Labour will also review the tax regime applicable to workers and self-employed contractors. 

Redundancy – reversal of Woolworths case and one establishment principle

For businesses proposing redundancies of 20 employees or more within 90 days at one establishment, there are collective consultation rights for employees. 

In the Woolworths case, shops were treated as separate establishments meaning that employees were entitled to no or limited compensation because they did not meet the thresholds for collective consultation. Labour proposes to change this principle so that all individual shops are aggregated, meaning collective consultation will be required in more situations.

TUPE 

Labour has stated that rights and protections for workers transferring under TUPE will be increased. There is little information provided at the moment as to how this will be implemented.   

Flexible working 

The aim will be for flexible working to become a genuine day one right, except where it is not reasonably feasible. The details are not yet clear, but the aim is to expand upon the day one right to request flexible working, and make a day one right to flexible working, where possible.

Right to switch off

A new “right to disconnect” is being proposed, meaning that employers should not be contacting employees outside of their working hours. There may be exceptions where the contact is “legitimate”. 

Enhancement of maternity rights, bereavement leave and carers leave

Pregnant women selected for redundancy currently have enhanced rights in respect of suitable alternative employment. Labour proposes to extend those enhanced rights so that it will be unlawful to dismiss a woman within 6 months of her return to work from maternity leave, except in specified circumstances.

Separately, the right to one week’s unpaid carer’s leave that came in in April 2024 is proposed to be paid leave. Moreover, bereavement leave would become a statutory right.

Equality at work

There are a number of proposals in relation to this. Strengthening of harassment laws in relation to interns and volunteers and to reintroduce protection from third party harassment. The introduction of ethnicity and disability pay gap reporting for employers with more than 250 employees. 

Employers with more than 250 employees will be required to produce Menopause Action Plans setting out how they will support employees.

Summary

Labour’s plans for the future of employment law include some drastic reforms. The changes, if implemented, will mean enhanced rights for employees and workers, which in turn will increase costs for employers. At this stage, many of the proposals lack detail and as this is provided moving forward, we will update you further. 

If you require further information in relation to any of these matters and how they might impact your business, please contact:

Vicky Beattie, email: [email protected], telephone 0161 302 8342

Christina Hill, email: [email protected], telephone 0161302 8364

Paul Stedman, email: [email protected], telephone 0161 302 8380