Insights

Nighat Sahi

Published 3 June 2024
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Proposed Reforms to Employment Law

There seems to be little doubt in most circles that the next Government is likely to be a Labour one. With this in mind, earlier this year, the Labour Party published their Green Paper, A new deal for working people which sets out a raft of key changes that they propose to make to employment law and promising to “strengthen workers’ rights and make Britain work for working people”.

Some of these proposed reforms to employment law are very much scant on detail and as might be expected, have attracted considerable comment.  How realistic the proposals are, how likely they are to be brought into force and exactly how they may be brought into force remains to be seen but there can be no doubt, that employers need to be aware and prepare as much as they can for some of these promised changes.

Summary of the main proposals

Raising wages and reducing poverty

The Green Paper makes the following proposals:

  • Increase the National Minimum Wage to at least £10 per hour for all workers and continue to evaluate what a real living wage should be.
  • Ban unpaid internships except when they are part of an education or training course.
  • Ensure travel time in sectors with multiple working sites is paid.
  • Raise Statutory Sick Pay (SSP) and make it available to all workers, including the self-employed and those on low wages currently cut out by the lower earnings limit for eligibility.

Employee rights

Fair Pay Agreements. Labour proposes the roll-out of Fair Pay Agreements to be negotiated through sectoral collective bargaining. These would be to establish minimum terms and conditions, which would be binding on all employers and workers in the sector and include things like pay and pensions, working time and holidays, training, work organisation, diversity and inclusion, health and safety,

Create a single status of ‘worker’. The proposals include a reform of the current system that provides for three types of employment status (employees, workers and self-employed) and the creation of a single status of ‘worker’ instead.

All workers, regardless of sector, wage, or contract type would then be afforded the same basic rights and protections although a separate category of the genuinely self-employed would be retained.

Rights from day one. The proposals include scrapping the current qualifying time for basic rights, such as unfair dismissal, sick pay, and parental leave.

Ban zero hours contracts. Labour promise to ban zero hours contracts and anyone working regular hours for twelve weeks or more will gain a right to a regular contract to reflect those hours normally worked.

Labour also proposes that all workers should get reasonable notice of any change in shifts or working time, with wages for any shifts cancelled without appropriate notice being paid to workers in full.

Labour will outlaw ‘fire and rehire’. ‘Fire and rehire’ is the practice of an employer making an employee redundant and then re-engaging them on reduced terms and conditions. This common tactic will be banned.

Flexible working rights from day one right. The right to flexible working for all workers will be a default from day one, with employers required to accommodate this as far as is reasonable.

Introduce a right to switch off. Under the proposals, workers will have a new right to disconnect from work outside of working hours and not be contacted by their employer outside of working hours.

Stronger family-friendly rights. Labour set out its commitment to extending statutory maternity and paternity leave, introducing the right to bereavement leave and strengthening protections for pregnant women by making it unlawful to dismiss a woman who is pregnant for six months after her return, except in specific circumstances.

Trade Union reform

Labour is committed to repealing anti-trade union legislation which removes workers’ rights, including the Trade Union Act 2016, in order to remove restrictions on trade union activity.

Labour wants to strengthen trade unions rights and protections, particularly in respect of trade union representatives against unfair dismissal and union members from intimidation, harassment, threats, and blacklisting.

Labour also proposes introducing a new duty on employers to inform all new employees of their right to join a union and to inform all staff of this on a regular basis.

Tribunal reform

Labour proposes the abolition of the statutory cap on compensation payments and extending the time period for bringing claims to Employment Tribunals.

The proposals also provide for workers being able to bring civil cases for breaches of statutory health and safety regulations and to recover legal representation costs from negligent employers.

Discrimination and inequality

Promising a commitment to tackle discrimination and inequality Labour proposes: 

  • That employers be required to create and maintain workplaces and working conditions free from harassment, including by third parties.
  • Those with caring responsibilities be given greater protections and better rights to respond to family emergencies with paid family and carers’ leave, the right to have flexible working, and greater ability for workers to enforce these rights.
  • To end gender, ethnicity and disability pay gaps. Labour promises to enforce the requirement to report and eliminate pay gaps with employers required to devise and implement plans to eradicate these inequalities.

Comment

The above is not a comprehensive list of the proposed reforms to employment law and there is a lot to digest within the proposals. Certainly, more detail is needed. As might be expected, there has been criticism from a number of directions, including from the union Unite who have called the workers’ rights package watered down, unrecognizable and a betrayal, while The Guardian has pointed out a loophole in the zero hours contract ban whereby workers could opt to stay on a zero hours contract which could result in pressure from employers to do so.

Other concerns include the increased litigation if the two-year rule is abolished for claims brought before a tribunal and the impact that many of these reforms could have on hiring and recruitment, and on small businesses with limited resources.

We will bring you further details as they unfold, but if you would like advice on how to prepare for inevitable change under a Labour government,  please contact Nighat Sahi at: nighat@rswlaw.co.uk

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