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Thrive’s Insights into Labour’s Proposed Employment Law Changes

Employment Law

The votes are in, and Labour has won the race to become the next UK Government!

In their manifesto the Labour Party has claimed that “Britain’s outdated employment laws are not fit for the modern economy.” This could be the very reason they pledge to introduce new legislation, in the form of an Employment Rights Bill, within the next 100 days.

In this blog we discuss some of the main changes that Labour have proposed and give you some of our insights. Make sure you are signed up to our newsletters to get these updates direct to your inbox as the legal landscape starts to change at pace.

Employment Status

The Employment Rights Act 1996 sets out the three current categories of employment status, namely: employee, worker and self-employed.

While the distinctions have not always been clear in the modern working structure (and largely based in case law which makes it difficult for non lawyers to fully understand which status is most appropriate), the Labour party has proposed to reform the current categories into two distinct categories of “workers” and “genuinely self-employed”. The implication of this means that the rights of an employee as we now know them, will be extended to individuals who would be deemed as “workers” under the current framework.

What should you be thinking about now?

In preparation for this proposed change, employers should conduct an audit of their current workforce to establish how many people fall into each of the current three employment statuses with their legal teams (or us if you need a hand!). From here the organisation  can determine the impact of a single status for all but the genuinely self-employed, which may include the financial impact of any current “workers” gaining additional rights and benefits.

Unfair Dismissal – Day One Right

Under the Employment Rights Act 1996, there are five fair reasons for dismissal

  1. conduct;
  2. capability (including ill health or performance);
  3. redundancy;
  4. illegality, and;
  5. some other substantial reason (“SOSR”).

Currently, where an employee has less than two years’ service, they can be dismissed for any reason (meaning the employer does not need to establish one of the “fair” reasons for dismissal) as long as it is not (either) discriminatory, or in response to whistleblowing or one of the automatic unfair reasons.

Want to understand more about automatic unfair dismissals? – check out our FAQ’s here.

However, the Labour Party have proposed to make this a day one right for all workers, removing the need for two years’ service.

It is not clear if they intend for this to only apply to the current definition of employee or whether they will change the status first to worker and then apply this to the new worker status.

It is likely that the use of probationary periods will take on more significance, but it is currently unclear how this would fit within the revised rules or whether Labour would create guidance or legislate on the reasonable use of such periods.

In theory, this means that employees (and possibly workers) will be entitled to challenge dismissals much earlier, promoting fairer treatment.

However, for employers this would lead to much more management time and the need for specialist legal support to assist in effecting fair dismissals, a rise in potential litigation, or ultimately a reluctance to recruit, given the heightened risks! Overall, this change may be effective in promoting a more balanced dynamic between the employers and employees, potentially enhancing job security and morale for new employees.

How can you prepare for this change?

In preparation for this change, the review of employment status will be helpful. Employers should also review their current use of probationary periods (and approach to ending or extending them) as well as their policies for dismissal procedures. It is advisable to also review current recruitment processes to ensure or improve on the hiring of appropriate candidates. In terms of learning and development, think about providing training for your managers. This will be more important than ever, as getting the process and the communication right is often essential when ensuring a fair dismissal takes place.

Want to understand more about unfair dismissals? – check out our FAQ’s here.

If you want to discuss anything with one of our team, please email enquiries@thrivelaw.co.uk for a no obligation chat with one of our senior team.

 

Flexible working  – Day One Right

Recently, flexible working in the workplace has undergone several changes however this may be subject to further change as Labour propose that flexible working will become the default position, rather than employees being required to request this.

Read here for information about the changes that have already taken place.

What can you do to prepare for this change?

Ensure your flexible working policy is up to date and consider what changes might need to be made. Consider whether other processes are likely to be impacted by this too such as recruitment.

Statutory Sick Pay – Day One Right

The current position is that individuals have to be off sick for four consecutive days before Statutory Sick Pay is paid (the first three days being “waiting days”), however it is proposed to also make this a day one right meaning that workers will be eligible to Statutory Sick Pay from the first day of any sickness absence.

What can you do to prepare for this change?

You will need to review your current contracts and handbooks to account for this change.   Also consider other policies and any relevant insurances as to whether they need reviewing in light of the changes.

Family Friendly Rights

Labour has also proposed to reform the following types of family leave:

  • Parental Leave – Introducing a day one right for parental leave (currently employees must have one year’s continuous service)
  • Bereavement Leave – A right to unpaid bereavement leave (in addition to the current right upon the death of a child).
  • Pregnancy – to make it unlawful, in the six months after a woman’s return to work following pregnancy and maternity leave, to dismiss her “except in specific circumstances”. It is unclear at the moment what the proposed specific circumstances will be.
  • Parental Leave and Carers leave – Labour has also proposed to review these specific types of leave and assess whether it should be legislated as paid leave.

What can you do to prepare?

Again, these changes will impact your contracts and policies so ensure a lawyer looks at this once the changes are confirmed, to ensure you have correctly updated them.

Fire and Rehire Practices

We have previously considered the practice of Fire and Rehire. The Code of Practice on dismissal and re-engagement is due to come into force on 18 July 2024.

However, this could be subject to further change as the Labour Party have suggested that they endeavour to strengthen the Code of Practice and introduce stronger remedies against the abuse of Fire and Rehire.

Unless the Code of Practice is repealed by Labour before it comes into force, employers should follow its principles until such time as it is replaced. If you are unsure in any way, or want to bounce off someone in our team, just reach out.

Increased Trade Union Power

The Labour party propose to repeal The Trade Union Act 2016 and The Strikes Act 2023 in a bid to strengthen the rights and protections of trade union members and officials, and the power of trade unions. The legislation they intend to repeal introduced restrictions on picketing and thresholds for ballots, to name but two. It is also proposed to simplify union recognition, create greater rights for union access to workplaces and place a duty on employers to inform new staff of their right to join a union at the commencement of employment and all staff of this regularly.

How can you prepare for this change?

In preparation for this change, employers should review and update their new starter documentation and consider how they will regularly notify existing staff of their right to join a union.

Extension of Limitation

Labour are also proposing to extend the current three month time limit for most employment related claims, to six months (bringing it in line with the current limitation for equal pay and statutory redundancy pay claims), with the aim of creating greater access to justice and easing pressure on the Tribunal system.

Single Enforcement Body

Labour also intend to introduce a single enforcement body [“SEB”] for worker’s rights, although the enforcement remit this will have is currently unclear. From the limited information provided, it seems their intention could be to create a SEB which may have similar power to the Health and Safety Executive and would enforce all workers’ rights such as national minimum wage, licensing and equality issues. Either way ,this is a huge undertaking and quite a radical change which is likely to take a significant amount of time and resource and is unlikely to be achieved within the first 100 days.

It is also unclear whether ACAS and the current Employment Tribunal would remain, how they will interact with the new SEB, or how directors will be dealt with on a personal liability perspective.

Right to Disconnect

Labour have proposed to introduce a “right to switch off” from work and not have to engage in any work communications outside of working hours. The intention of this is to give workers the right to enjoy their free time away from work without being disturbed or interrupted.

Rather than an outright ban on employers contacting workers outside of their working hours, as was initially suggested, the current proposal is to provide scope for workers to collaborate on a mutually beneficial, bespoke proposal.

How can you prepare for this change?

It is likely employers will need to introduce new practices and systems to remind their workers they do not have to deal with communications they receive outside of their normal working hours.

When we have more detail of what this right is going to look like, we will be putting together a policy to inform employees of their right to disconnect.

As always, as soon as we know more we will update you on how best to prepare and what to think about.

Equality rights enhanced

Labour also plans to enhance workplace equality through several initiatives:

  • Extending protection from harassment to interns and volunteers.
  • Implementing ethnicity and disability pay gap reporting for employers with over 250 employees.
  • Revising gender pay gap reporting and including pay ratio reporting for outsourced workers.
  • Requiring large employers (over 250 employees) to create Menopause Action Plans to support employees through menopause.

How can you prepare for theses changes?

Conducting a status review and assessing if you have any interns and volunteers will be essential, as well as education and awareness raising on important issues like unconscious bias, unacceptable behaviour at work and discrimination at work to create a more inclusive workplace whilst reducing the risk of possible claims for harassment.

If you have more than 250 employees consider: What data do you currently have? How long would it take you to collate the data if you don’t have what might be required? Who will be responsible for this and have they been trained?

Do you have any procedures or policies in plan for Menopause including a Menopause Policy? Please get in touch if you would like to support your employees through menopause, with a vast array of resources we can help you create robust procedures and policies.

Do you know how these changes will impact your business?

As each proposal in the manifesto is actioned and as more details are shared, we will follow these changes through and consider in more detail the implications for both employees and employers, sharing our insights with you as we go.

We know this is a big update but there are a lot of changes likely to come, and some of them very quickly, so don’t forget to sign up to our newsletter or you can book a call with one of our team to help you plan how to navigate these changes effectively on enquiries@thrivelaw.co.uk.

We will also be sharing lots of updates on our socials so click here to connect:

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