The General Election: What does a new Labour Government mean for employment law?

Zero hours contracts

Labour has committed to end "one-sided" flexibility and ensure all jobs provide a baseline level of security and predictability by:

• banning "exploitative" zero hours contracts and ensuring everyone has the right to have a contract that reflects the number of hours they regularly work, based on a twelve-week reference period;
• ensuring all workers get reasonable notice of any change in shifts or working time, with compensation that is proportionate to the notice given for any shifts cancelled or curtailed. 

Anti-avoidance measures will be implemented where necessary.

Fire and rehire

In addition, the rules surrounding ‘fire and rehire’ (where employees who do not accept contractual changes can be dismissed and re-engaged on the new contract) would be made more difficult, although the practice would not become completely impossible.  Labour recognise that restructuring can be necessary for the business to remain viable and to preserve the workforce, when there is genuinely no alternative.  With the aim of putting an end to poor practices of fire and rehire, Labour has committed to reforming the law to provide effective remedies against abuse and replace the "inadequate" statutory code with a strengthened code of practice. 

Basic day one rights

The Plan announced basic individual rights from day one for all workers including protection against unfair dismissal, parental leave and sick pay.  Making unfair dismissal a day one right is significant for employers.  The detail is not set out in the Plan however it appears that probationary periods will play a greater role in helping to assess new hires with transparent rules and processes.

Single status of worker

There is also an intention to remove the difference in legal status between an employee and a worker.  Going forward, Labour propose to simplify the law surrounding employment status by categorising an individual as either self-employed or a worker.  Presumably this will lead to giving workers the full quota of rights currently enjoyed by "employees" (such as the right to claim unfair dismissal). 

Redundancy

Changes to collective redundancies would be introduced, with the aim of triggering collective consultation rights more easily in circumstances where a certain number of employees are made redundant across a whole business, rather than the current ‘one workplace’ rule.

Flexible working

Labour have gone further than the previous government, in connection to its recent changes to flexible working.  Where the previous government has recently created the right to request flexing working arrangements from day one of employment, Labour have outlined that they expect it to be the default position from the first day (except where it is not reasonably feasible).

Parental rights

Parental leave will become a day one right as set out above. 

Maternity discrimination

Labour has committed to 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.

Carer's leave

Labour will review the new legislation for unpaid carer's leave and examine the benefits of introducing paid carer's leave, while being mindful of the impact of any change on small employers. 

Bereavement leave

Labour will clarify the law and entitlement, introducing the right to bereavement leave for all workers.

Right to switch off

With a commitment to promoting a positive work-life balance for all workers Labour will bring in the "right to switch off" so that working from home does not result in homes turning into 24/7 offices. 

Technology and surveillance

Recognising the benefits new technologies, including automation and AI, have to boost wages, drive up productivity and empower workers, they also pose risks to jobs and livelihoods.  Labour has committed to protect good jobs, ensure good future jobs, and ensure that rights and protections keep pace with technological change – with a particular mention of safeguarding against discrimination.  We will have to wait and see what this means in practice.  

Genuine living wage

Labour has stated that it will ensure the National Minimum Wage ("NMW") is a real living wage that people can live on.  The key steps set out in the plan to achieve this are:

• The Low Pay Commission's remit will be extended to ensure the NMW takes into account increases in the cost of living.
• The "discriminatory" age bands will be removed to ensure every adult worker benefits from the NMW.
• The Single Enforcement Body and HMRC will be given the powers necessary to make sure the genuine living wage is properly enforced, including penalties for non-compliance. 

Fair tips

In the Plan Labour commits to ensuring hospitality workers receive their tips in full and workers decide how tips are allocated.  It is unclear at this stage whether Labour will bring into force the remaining provisions of the Employment (Allocation of Tips) Act 2023. 

Trade unions

Highlighting the extensive strike action over the past decade, Labour has committed to reduce red tape on trade union activity that works against their core role of negotiation and dispute resolution.  Labour will repeal a number of pieces of legislation which it considers has attacked rights at work, including the Trade Union Act 2016 (implemented restrictions on the organisation of lawful industrial action) and the Strikes (Minimum Service Levels) Act 2023 (implemented powers for the government to set minimum service levels in certain industries).

The Plan sets out further extensive amendments to help create "a new era of partnership" that sees employers, unions and the government work together in co-operation and through negotiation.

Equal pay

Labour has committed to tackling the gender pay gap "which is narrowing too slowly", putting in place measures to ensure that outsourcing of services can no longer be used by employers to avoid paying equal pay and implementing a regulatory and enforcement unit for equal pay with involvement from trade unions.

In the Manifesto Labour has committed to introduce the full right to equal pay for disabled people.  

Pay gap reporting

Large firms will be required to develop, publish and implement action plans to close their gender pay gaps. 

The publication of ethnicity and disability pay gaps will also be made mandatory for employers with more than 250 staff.

Menopause in the workplace

Large employers (more than 250 employees) will be required to produce Menopause Action Plans setting out how they will support employees through the menopause.

Gender recognition

Labour has committed to modernising, simplifying and reforming the "intrusive and outdated" gender recognition law in the Manifesto.  They have also stated that it is proud of the Equality Act 2010 and the rights and protections it affords women and that it will continue to  support the implementation of its single-sex exceptions. 

Single Enforcement Body

Labour proposes to introduce a Single Enforcement Body for workers' rights which would "better support businesses who want to comply with the rules, create a strong, recognisable single brand so individuals know where to go for help and lead to a more effective use of resources and coordinate enforcement action."  According to the Plan the Body would not only help enforce workers' rights but would also include strong powers to inspect workplaces and take action against exploitation. 

Time limits

Labour has also proposed an extension to the time period for raising a claim in the Employment Tribunal; changing the current three month time limit to that of six months for all claims.  This will have a substantial impact on risk management for employers.

Collective grievances

The ability of employees to lodge collective grievances through ACAS would also be implemented; giving employees another formal avenue of mediation in workplace disputes.

Harassment

The Plan references tackling workplace harassment, including by third parties.  Labour has committed to strengthening the legal duty for employers to take preventative action to prevent sexual harassment in the workplace.