What the proposed Labour changes mean for your business

Change almost never fails because it’s too early. It almost always fails because it’s too late

Seth Godin

As we all know, the UK’s very own independence day happened on the 4th of July this year - the Labour government coming into power. After 2 months of getting set up, they have announced what changes they plan to bring in regarding employment law.

There are loads to go through (some of which are unclear on how realistic they are), but I’ve detailed down six areas that I think are particularly pertinent for both employees and employers to keep in mind from a people ops perspective.

A short, sweet and slightly different edition for this week, but I'll be going through:

• 6 proposals that stood out to me, and how they differ from the status quo
• Resources to support you and your team, throughout these changes
• Some solid reading materials that explain the changes in some more detail

1?? Dismissals

At the moment as an employee you can only challenge your ex-employers to unfair dismissal claims when you’ve been working at the company continuously for 2 years. With Labour they are suggesting a change to the employment rights bill which will give employees the right not to be unfairly dismissed from their first day of employment (honestly I think it’s wild that only now is this coming into legislation - feels like a basic human right?!).

Whilst it is of course still possible to end someones employment, it needs to be handled super delicately and respectfully - giving everyone an opportunity to improve instead of cutting your losses too early on.

Of course we know that this leadership behaviour has always led to a better performance culture anyway but now it is mandated so everything must be process driven, written down and communicated impeccably.

So what does this mean for employers?

• Ensure everything is in writing, and that you've clearly given the employee a performance improvement plan, guidance and support, and fair warning.

2?? Zero hours contracts

A complicated topic and one that does interfere with part-time or contract workers largely. Up until now there have been exploitative sides to this type of contract, taking advantage of the ‘zero-hours’ term to overwork the employee.

Labour are proposing a ban on this so that workers are able to request a predictable working pattern, or at least an average set of hours per week. Hopefully then linking closely to the ‘right to switch off’ proposal (below).

So what does this mean for employers?

• You'll probably need to get new contracts drawn up, and secondly you need to honour their working hours and stick to that as much as possible.

3?? Right to disconnect

Similarly to above the government are trying to protect the mental and physical wellbeing of workers nationwide, by limiting the amount of work-related interruption to personal lives.

Of course there are some cases whereby individuals choose to work around the clock, and in some instances it is unavoidable to work outside contracted hours (for example if you have a client call with different timezones) - but this ensures that no one can be penalised for rejecting calls or work outside of their hours (in particular weekends and late in the evening if we are being honest).

Generally you should be able to get the necessary work done, most days, without over indexing on your personal life if you can ensure a culture of great time management.

So what does this mean for employers?

• Pretty simple one - be mindful as a manager of contacting people out of hours on their personal devices (specifically phoning or texting), and working on your bias if you don't get responses outside of the working hours.

4?? National living wage

The plan is hopefully to improve this in line with cost of living - but also to remove the 18-20 age band which currently allows for a lower rate. Biggest thing to raise here for employers is whether your comp plans meet the new living wage standards. Not just this but I’d expect questions from employees around increasing their salaries to reflect inflation.

This is a tricky one as generally I believe salary enhancements should be to reward hard work, as opposed to just matching inflation. It can lead to an expectation setting that will be continually difficult to stick to.

So what does this mean for employers?

• Regular salary and progression reviews - 2-3 times a year is a good aim,
• Introduce wellbeing budgets, or one-off bonus packages to pocket throughout more challenging times instead of just matching inflation.

5?? Parental rights review

I think potentially my favourite of them all! 2 weeks ago I posted about our parental policy offering and how we made the decision to offer mat leave to employees from day 1 as opposed to 6 months in.

This (if they are able to pull it off) would be a monumental change for mothers. The current legislation means that women are often stuck in jobs they aren’t excited by, because they wouldn’t qualify for mat leave if they were to leave.

Even more importantly than this, it levels the playing field (slightly) for when women are job hunting. With legislation dictating from day 1 you’d get statutory support, shows that women are still uber employable and worth the investment.

So what does this mean for employers?

• Assuming the statutory offering is the same 6 weeks at 90% pay, amend your maternity policy to reaffirm that from day 1 of employment pregnant women and new mothers will still get support.

Only thing to improve next is equalling the playing field with paternity leave ??

“The parental leave system has broken and is no longer fit for purpose."

6?? Rights for the self-employed

At Passionfruit this is something that was a huge emulsifier in why we started the business. Freelance and self employed workers often spend months chasing pay-checks, struggle to get written contracts that they are happy with, or don't have health and safety protections. So it’s truly brilliant to see the government getting behind this concept also. How are they going to do this? Not entirely sure yet - but even opening up the conversation further is a great starting point.

So what does this mean for employers?

• A super smooth way to hire self-employed is through a third party like Passionfruit who cover payments and contracts for you.
• Alternatively review all freelance contracts including a payment terms review. This might need to change from your net 60 or 90 day usual terms.

Resources that are helpful to keep in mind

• CharlieHR - HRIS and Advice service - 10/10 purchase for small businesses
• Mind - free guides to support teams mental health
• Vitality - a little more of an investment but awesome offering for relieving the team of worries when it comes to healthcare, dentistry, discounts and other benefits

What we’re reading

• Labour employment law dashboard
• HR compliance guide 2024
• 5 tips for communicating pay rises in times of high inflation