With a historic majority in parliament, Kier Starmer’s Labour Party are now in control and have a mandate to implement their New Deal for Working People (the New Deal) which was published back in May.
The New Deal states that Labour will introduce legislation within 100 days of entering ?government. This does not necessarily mean it will become law within 100 days of entering government as it will be subject to both the House of Commons and House of Lords passing the proposed legislation and then receiving Royal Assent. Here’s some of the key takeaway points from the New Deal covering what changes employers can expect from this new government.
Employment status:
- Originally in Labour’s green paper of 2021, Labour proposed replacing the current 3 tier system, with just “worker” and “self-employed” status. “Workers” would have all of the same employment rights enjoyed just by employees at the moment.
- The New Deal now states it will consult on how to transition to a two tier system. This is no longer a commitment to introducing the two tier system.
- If it is introduced, we see this having a big impact on the “gig economy” which relies heavily on “worker” status.
- Labour have also said they will strengthen rights and protections for self-employed workers, including the right to a written contract and extending health and safety protections to self-employed workers.
Right to disconnect:
- Originally in Labour’s green paper of 2021, Labour said they would bring in the right to switch off and not to be contacted by an employer outside of working hours.
- However, it looks like this will now be an encouragement to have conversations and work together on workplace policies about disconnecting.
Day 1 employment rights:
- Originally in Labour’s green paper of 2021, Labour said it would expand day one rights to include unfair dismissal.
- However, the New Deal sets out that it will not prevent fair dismissals for conduct, capability, redundancy or dismissal during probationary periods with fair and transparent rules and processes. Essentially, this would prevent dismissals of new hires without reason or cause.
- Our advice would be to introduce robust contractual probationary period clauses and ensure effective recruitment and performance management processes.
Discrimination:
- Mandatory ethnic and disability pay gap reporting for large employers of 250 employees or more (currently we only have gender pay gap reporting for large employers).
- Labour will also require large employers to produce Menopause Action Plans, setting out how they will support employees through menopause.
Tribunal time limits and compensation caps:
- There is a pledge to extend time limits from 3 months to 6 months.
- Labour will also introduce a single enforcement body for worker’s rights.
Ending fire and rehire when trying to change terms and conditions of employment:
- Originally in Labour’s green paper of 2021 this was going to be an outright ban but now Labour says it will “strengthen” the code of practice on fire and rehire.
Banning exploitative zero hours contracts:
- Labour is saying it will end ‘one sided’ flexibility by ensuring everyone has the right to have a contract that reflects how much they work in practice based on an average 12 week period. This does not appear to be very different to the ‘predictable terms and conditions’ which the current government has introduced.
- Labour have said that it will not prevent employers from offering fixed-term contracts, including seasonal work.
Trade unions:
- Labour is committing to consult on fair pay agreements for the adult social care sector, this would mean employers and employee representatives in this sector agreeing a minimum package of terms and conditions and making this binding on all employers in that sector. Originally, they had suggested rolling this out to all sectors.
- Strengthen union rights, such as: remove thresholds for ballots and restrictions on pickets; allow union officials to meet up in workplaces with potential members; expand the way in which workplaces can ballot e.g. electronic rather than just postal; review the process for statutory recognition claims and remove the rule that means unions have to show at least 50% of workers are likely to support their claim before the process has begun and a positive duty on employers to inform all new employees of a right to join a union as part of the written contract of employment.
Pay:
- Labour has said it will change the Low Pay Commission’s remit, so that the minimum wage will reflect the need for pay to take into account the cost of living. Labour have also said they will remove the discriminatory age bands to ensure every adult worker benefits.
- Labour has said it will remove the lower earnings limit to make Statutory Sick Pay available to all workers and remove the waiting period.
Redundancy rights:
- Labour have set out that they will strengthen redundancy rights, for example, by ensuring the right to consultation is determined by the number of people impacted across the business rather than in one workplace. We will see this particularly affect those businesses with multiple geographic locations.
Family Leave:
- Labour will review the current parental leave system and as part of this have said they will ensure that parental leave is a day one right (it is currently only available to those who have been in the company for more than a year).
- Labour have said they will make it unlawful to dismiss a woman who is pregnant for 6 months after her return, except in specific circumstances. We do not yet know what these specific circumstances will be.
Although some of these promises have become diluted, they are still important changes that could alter the shape of employment law and HR.
Interestingly some of the pledges we had expected from Labour’s green paper in 2021 and a previously leaked version of a new green paper prior to the announcement of the general election, have not made their way into the New Deal. For example, Labour no longer appears to be introducing personal liability for directors in relation to tribunal awards and is no longer proposing to remove the statutory cap on compensation.
