Is there a “new deal for working people” on the horizon?

With the date for the General Election now being confirmed as the 4th July 2024, we have taken a look at the changes to employment rights and responsibilities which the Labour Government have pledged to make, should they be elected.

Whilst we hadn’t seen Labour’s manifesto at the time of writing, they did produce an “Employment Rights Green Paper” in 2021, which set out their vision for changes to employment rights in the workplace. The pledges contained within the Green Paper are as follows (and we have also covered the manifesto in the podcast with a link in the next section):

“Labour will deliver a social security system that provides a safety net for all”.

This will include raising the amount of Statutory Sick Pay and making this available to all workers, including the self -employed and those on low wages currently cut out by the Lower Earnings Limit for eligibility. There is also a proposal to replace Universal Credit to allow low-income earners on benefits to keep more of their take-home pay.

It has been reported that Labour would remove the current three day waiting period and make SSP payable from the first day of sickness absence, although this does not feature in the Employment Rights Green Paper.

“Labour will use public procurement to support good work”.

Labour plan to use procurement to promote high standards. “We will choose to do business with companies that treat their workers well, recognise trade unions and have provision for collective bargaining arrangements and fair wage clauses; have effective equality policies; adhere to high environmental standards; and are fully tax compliant.”

There also is a proposal to award more public contracts to British businesses and bring the jobs of the future to the UK.

“When workers are empowered to act as a collective, they are able to secure better pay and conditions”.

Labour have stated that “strong collective bargaining rights and institutions at all levels are key to tackling the problems of insecurity, inequality, discrimination, enforcement, low pay and other issues identified in the Green Paper.” This will include Fair Pair Agreements which Labour envisage would be negotiated through sectoral collective bargaining. It does seem however that this commitment has changed slightly, with a promise to consult on a Fair Pay Agreement only in the social care sector.

“Labour will create a single status of “worker””.

There is a pledge to create a single status of “worker” for all but the genuinely self-employed. This would mean that workers will have the same basic rights and protections including rights to sick pay, holiday pay, parental leave, protection against unfair dismissal etc. The aim is to “clamp down” on “unscrupulous” employers who treat staff like regular employees but denying their rights they would have been owed as employees. It is worth noting that it has been suggested that this would now be a promise to consult on a plan to create a “single status” for all workers except the self employed.

“Labour will give all workers day one rights on the job”.

Labour propose to end the qualifying periods for basic rights such as unfair dismissal, sick pay and parental leave. However, Labour have commented that the right to bring an unfair dismissal claim will be a day one right “subject to contractual probationary periods”. A probation period process would need to be fair and transparent. In addition, it seems that there will be a review of parental leave provisions within the first year of a Labour Government.

“Labour will ban zero hours contracts and give workers predictable contracts”.

Within the Green Paper, Labour plan to ban zero hours contracts and contracts without a minimum number of guaranteed hours. Anyone working regular hours for 12 weeks or more will gain a right to a regular contract to reflect those hours normally worked. Workers would also get reasonable notice of any change in shifts or working time, with wages for any shifts cancelled without appropriate notice being paid to that worker in full. It is worth noting that this may now be weakened so this is now a right to a contract reflecting a worker’s regular work pattern over the previous 12 weeks and a worker could still opt to stay on a zero hours contract, with minimum standards to ensure that they are not “abused”.

“Labour will outlaw fire and rehire”.

Labour plan to improve information and consultation procedures, to make employers consult and reach agreements about contractual changes with their workforce. The unfair dismissal and redundancy legislation will also be adapted to prevent workers from being dismissed for failing to agree a worse contract. Labour would also ensure that notice and ballot requirements on trade union activity do not inhibit defensive action to protect terms and conditions of employment in situations where fire and rehire tactics are being implemented.

There is already a new Statutory Code of Practice on fire and rehire that is due to be introduced shortly by the Conservative Government shortly, with a potential uplift of 25% for breach of the Code. However, it is clear that Labour plan to go further than the provisions which are contained in the draft Statutory Code.

“Labour will bring in the “right to switch off” and work autonomously”.

Labour proposes to give workers the right to disconnect from work outside of working hours and not to be contacted by their employer. In addition, Labour will produce a right to protect workers from remote surveillance where any proposals by an employer to introduce surveillance technologies would be subject to consultation and agreement by trade unions or elected staff representatives.

The concept of the right to disconnect from work is already in place in countries such as France and Belgium. The right to switch off is looking at dealing with the blurred lines between work and personal life which has occurred as a result of remote working There may very well be exceptions to this right to switch off, as some roles may need to be available outside of working hours. It is also unclear what would happen if employers breach this right.

There does seem to have been an indication that Labour may introduce this by way of best practice advice or secondary legislation rather than an absolute right.

“Labour will bring about stronger family-friendly rights”

Labour have suggested that they would introduce stronger family friendly rights, whereby they would implement a right to bereavement leave and extend maternity and paternity leave. They would review the Shared Parental Leave system with reforms to “incentivise sharing of leave”. Paid family and carer’s leave would be introduced, as well as a right to flexible working with those with caring responsibilities, which would appear to be distinct from the current right to request flexible working. Whilst no details have been provided as yet, Labour state that there will be “better enforcement” of these rights.

“Labour will update trade union legislation so it is fit for a modern economy”.

Labour plan to repeal anti-trade union legislation to remove “unnecessary” restrictions on trade union activity. They would strengthen trade unions’ rights of entry to workplaces to organise, meet and represent their members and potential members, and to contact remote workers. Labour also want to simplify the process of union recognition and create new rights and protections for trade unions to undertake their work, strengthening protections of trade union representatives against unfair dismissal and union members from intimidation, harassment, threats and blacklisting.

It therefore seems evident, that Labour will adopt an interventionist approach and plan to move quickly to strengthen Trade Unions powers.

“Labour will establish a single enforcement body to protect workers”.

This new body would be able to inspect workplaces and bring prosecutions and civil proceedings on  a workers’ behalf relating to health and safety, minimum wage, worker exploitation and discriminatory practices. Labour also plan to ensure that there is sufficient funding and enough inspectors to undertake unannounced inspections and follow up on anonymous tip offs.

It is worth noting that a single enforcement body has been promised for some time, but this has never materialised and was scrapped in 2022. Instead the Conservative Government said that it would turn it’s attention to ensuring that the bodies already in existence were operating effectively.

“Labour will strengthen the law to enforce workplace rights.”

Labour plan to extend the time period for bringing claims to the Employment Tribunal, with “tougher penalties” for those who break the law or fail to comply with Tribunal Orders, including personal liability for those who were Directors of companies at the time. This would mean that Directors could be sued in a private capacity for the unpaid monies.

There is also an indication that the statutory caps on compensation will be removed so that workers receive full compensation.

“Tackling discrimination and workplace inequalities”.

It seems that Labour will reintroduce the protection from workplace harassment by third parties, and amend the Equality Act to protect interns and volunteers against sexual harassment. Labour will permit equal pay comparisons across employers where men and women carry out comparable work and enforce the requirements to report and eliminate pay gaps. The publication of ethnicity pay gaps will be made mandatory for firms with more than 250 staff, along with mandatory disability pay gap reporting for larger businesses, which was announced by Anneliese Dodds MP, Shadow Women and Equalities Secretary at the Labour Party conference.

 Ethnicity pay gap reporting has been on the agenda for some time. In 2022 the Government reversed it’s original commitment to make it mandatory, but did publish guidance in April 2023 for employers who wished to voluntarily report on their ethnicity pay.

Labour have also confirmed that they will bring in protections for the self-employed, tackle criminal labour exploitation and put mental health on a par with physical health in our workplace. There are also planned TUPE reforms, where Labour plan to oversee “the biggest wave of insourcing of public insourcing of public services for a generation.”

Additional proposed reforms

Whilst not included in the Green Paper, there have been some other suggestions of what may be included in any future manifesto, such as the abolition of the apprenticeship levy for this to be replaced with a “growth and skills levy”, although we haven’t had any details on this as yet. In addition, there may be a requirement for employers with over 250 employers to publish and implement a “menopause action plan” which will set out how they are supporting employees experiencing menopausal symptoms, along with a new Race Equality Act which would be introduced to tackle “structural racism”.

What does this mean for organisations?

We haven’t seen the finalised manifesto as yet but what is clear, is that Labour will have to walk a tightrope between the expectations of the Unions, and the concerns raised by business that the rights given to workers will be prohibitive to business expansion. There has already been a suggestion by some Unions that Labour cannot take their members votes for granted if promises of a new package on rights is weakened.  However, what is clear is that if a Labour Government is elected, there will be a huge impact on institutions and the employment tribunal systems. All aspects of employment law will be impacted, from recruitment to termination, with a plan to bring forward an Employment Bill containing these changes within 100 days of being in office. However, this doesn’t necessarily mean that everything will be in force within 100 days, as this will be subject to Parliamentary scrutiny.