Prime Minister Rishi Sunak has called the next UK general election for 4th July and with polls consistently predicting a Labour government, scrutiny of their employment law plan is key to understanding the practical implications for businesses.
The Labour party has outlined several policy proposals across a series of working papers, most recently publishing Labour's Plan to Make Work Pay on 24th May, which outlines over 30 employment proposals and plans to introduce legislation within 100 days of entering government. There have been some changes to this newest iteration of the Labour plan, sufficient for Sharon Graham to refer to it as a ‘bosses charter’. However, trade unions are at the heart of what is a union-friendly plan.
Proposals to repeal both the Trade Union Act 2016 , and the Strikes (Minimum Service Levels) Act 2023 will remove requirements for organising industrial action, including removing the minimum ballot turnout, two weeks’ notice of industrial action, 6-month time limit on validity of strike ballots and requirements on the wording of the ballot paper.
As well as removing these criteria the Labour party also plan to modernise and simplify ballot processes, allowing electronic and workplace ballots rather than postal, making it easier and less costly to organise industrial action. Further planned simplifications to the law around statutory recognition thresholds will also reduce the criteria Unions need to gain recognition for company-level collective bargaining. Employers will also be required to inform new employees of their right to join a union through their written statement of particulars.
As well as the more specific changes there are proposals which are less clear but equally significant, including the right of access for Unions through ‘a regulated and responsible route for recruitment and organising’. This is likely to enhance rights for unions to enter workplaces to recruit members and organise.
Further headline plans include removing the qualifying period for basic rights including the current 2-year qualifying period for unfair dismissal under which employers can currently operate probationary periods. Labour have updated their original plans assuring, but not providing detail, that this will “not prevent dismissal for fair reasons or probationary periods with fair and transparent rules and processes.”
There also appears to be a softening of proposed bans on some controversial employment practices. The promised ban on zero hours contracts now appears not to be an outright ban but could take the form of the introduction of a rule entitling workers to a contract if they regularly work based on a 12-week reference period. Previous indications of a ban on ‘fire and rehire’ have softened to ‘provide remedies against abuse’ with a strengthened code of practice. The Financial Times quote Rachel Reeves, UK Shadow Chancellor, stating that bosses must retain fire and rehire in ‘very limited circumstances’ indicating Labour are taking a more business friendly stance rather than imposing outright bans.
A further headline proposal is Labour’s wish to create a single status of worker, moving from the current three-tier system where a different balance of rights is afforded to employees, workers and the self-employed. The complexities and practical and financial impacts of this measure have seemingly been recognised at last, with reference now to the need for a ‘transition’ and to ‘consult in detail on a simpler framework.’
Labour also promises a more straightforward suite of family friendly and fair pay rights. These include flexible working as a default from day-one, rather than the current ‘right to request’, and a review of parental, carers, and bereavement leave within the first year of government. In terms of pay, Labour proposes to inform the Low Pay Commission, responsible for recommending the National Minimum Wage, to take account of the cost of living and remove the age bands with penalties for non-compliance. For sick pay they propose to remove the lower earnings limit and the waiting period. Unpaid internships are also to be banned unless part of an education or training course. Many of these changes will have practical and cost implications for businesses who will need to review their policies and practices.
There are specific additional reporting requirements for firms with 250+ employees including reporting on ethnicity and disability pay gaps, publishing and implementing action plans (to include outsourced workers) and menopause action plans.
Labour also plans to create a single enforcement body for workers’ rights, with trade union representation. This will have powers to inspect workplaces and act against exploitation including bringing civil proceedings. This is to be combined with digitising Employment tribunals and increasing the time limit within which employees can make an employment claim to 6 months. They will also establish a right to raise collective grievances with ACAS, a proposal which currently omits raising the issue directly with the employer first.
Finally, there are plans for procurement including insourcing of public services with emphasis on value for money, impact on service quality and economic and social value goals. A new Fair Work Standard created by a new Social Value Council made up of public sector, employer and trade union representatives will be tasked with strengthening social value in public contracts. The Wales Social Partnership Council is cited as inspiration.
This major shake-up of the employment law framework has been confirmed as official Party policy ahead of the General Election. Labour’s plans, if implemented, will therefore have a significant impact on the employment law landscape.
If you have any questions or feedback, please contact employeerelations@eca.co.uk