What changes will the new Labour government make to employment law?
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The results are in, and we now know that Sir Keir Starmer will be the UK’s new Prime Minister, following a resounding Labour victory at the polls.
But what does this mean for employment law?
Kate Palmer, Employment Services Director at Peninsula, says, “While most employers will be glad to get back to business as usual now we know which party will form the new government, Labour campaigned on a ‘Plan to make work pay’ so employers should be prepared for significant changes to employment law as they look to strengthen employee rights. With more than 60 proposed changes in their manifesto and a pledge to bring in the majority of these changes within 100 days of taking office, now is not the time to relax. We can expect to see a significant rise in the number of employment tribunal claims being brought once these changes come into law, so it’s more important than ever for businesses to ensure they are across all potential changes, updating policies and contracts as needed to ensure they remain fully compliant.
Here are the areas we can expect to see change.
• Day one rights – The qualifying periods for basic rights such as unfair dismissal, sick pay and parental leave will be removed, meaning they become day one rights. There will still be some flexibility for employers to dismiss employees using probationary periods, but this is a huge change that could lead to significant tribunal claims.
• Single status of ‘worker’ - The distinction between employees and workers will be removed, meaning all staff will get the same basic rights and protections.
• Strengthening existing rights - Existing rights and protections, including those for pregnant workers, whistle-blowers, workers made redundant, and workers subject to TUPE processes and those making grievances will be strengthened. Labour has also pledged to reinstate the School Support Staff Negotiating Body.
• Increased wages – Continuing their commitment to raise National Living Wage, they will ask the Low Pay Commission to take cost of living into account when recommending minimum wage rates. Certain unpaid internships will be banned, ‘sleep over’ hours in sectors like social care will be paid as well as enforcing the law on pay for travel time in sectors with multiple working sites.
• Sick pay – Rules around Statutory Sick Pay (SSP) will be strengthened, making it available to all workers without the current waiting period. The rate payable will be increased to represent a ‘fair earnings replacement’.
• Pay gaps – Firms with more than 250 employees will be required to report their ethnicity and disability pay gaps.
• Harassment – Employers will be required to create and maintain workplaces and working conditions free from harassment, including harassment by third parties. Employers will be under a duty to take all reasonable steps to prevent sexual harassment.
• Flexible working – Flexible working will become the default from day one for all workers, except where it is not reasonably feasible.
• Family friendly policies – Making parental leave a day one right is just one of the family friendly policies planned by Labour. We can expect a new right to bereavement leave and it will also become unlawful to dismiss pregnant employees for six months after their return from maternity leave, except under specific circumstances.
• Right to disconnect – Labour will "Bring in the right to 'switch off' so working from home doesn't become homes turning into 24/7 offices."
• Caring responsibilities – A new right to Carer’s Leave came into law on April 6 this year. It is currently unpaid; Labour has said they will examine the implementation of Carer’s Leave and the benefits of making it paid leave.
• Zero-hours contracts –It doesn’t appear that Labour will do away with the practice of zero-hours entirely, but they have promised to ban ‘one-side flexibility. This means that anyone working regular hours for 12 weeks or more will gain the right to a regular contract reflecting the hours they work. All workers will get reasonable notice of any change in shifts or working time, and recompense for cancelled shifts.
• Fire and rehire – Labour pledged to improve information and consultation procedures by replacing the statutory code of practice with a stronger one and adapt unfair dismissal and redundancy legislation to prevent workers being dismissed for not agreeing to a worse contract.
• Trade union laws – The trade union’s right of entry to workplaces will be strengthened along with the protections for trade union representatives. The process of union recognition will be simplified along with a new duty on employers to inform the workforce of their right to join a union in their written contract.
• Enforcement rights - The time limit for bringing Employment Tribunal claims will be extended to six months which, combined with the new day one right to bring a claim for unfair dismissal, could result in more tribunal claims.
• Tips – The law on distribution of tips will be strengthened to ensure that hospitality workers receive their tips in full and workers decide how tips are allocated.
• Menopause – Large employers with more than 250 employees will be required to produce Menopause Action Plans. There will be guidance, including for smaller employers, on the type of measures that should be considered as part of this plan.
• Wellbeing – Employers will be required to support the wellbeing of workers and their long term physical and mental health, raise awareness of neurodiversity, assess whether existing regulations and guidance is adequate to support and protect those experiencing the symptoms of long Covid. Businesses will need to be aware of any new guidance and implement this in their workplace.
• Artificial intelligence – The new government will work with workers, trade unions, employers, and experts to examine what AI and other new technologies mean for work, jobs, and skills.
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