Although the respective manifestos have not yet been released, we have collated various announcements and policy documents published by both parties, in order to outline their stance on employment law and workers’ rights. Perhaps unsurprisingly, as part of their campaigns to win the keys to Number 10, the approach taken by each party in this key area highlights marked differences in political attitude, particularly towards the balance of power between the individual and business.
Labour
In ‘Labour’s Plan to Make Work Pay: Delivering a New Deal for Working People’ , the title of their employment law plan encapsulates their approach; to enhance employment rights for individuals, thereby encouraging participation in the workforce and benefiting business.
The starting position for Labour is based in its accusation that the Government has failed to ‘get to grips with the challenges Britain faces or update employment protections so that they are fit for the modern economy.'
Their answer to that problem is then outlined in a raft of significant changes to current employment laws, many of which are slated to be introduced within the first 100 days of Labour entering government. It signals an appetite for major reform, although, in practice, it is likely that many of the proposals will take years to come into effect.
Unfair Dismissal and other Day One Rights
The ability to raise a claim for unfair dismissal from the first day of employment is one of the most significant proposals. This noteworthy day one right is coupled with the promise to ‘…ensure employers can operate probationary periods to assess new hires’, which suggests a less stringent test for dismissal may be imposed during such a period.
Given that it appears a new employee’s probationary period will be expected to do much of the heavy lifting, it is disappointing that the practical detail as to how this will operate is unclear. First, it begs the question as to who will be able to determine the length of any such probationary period (presumably there will be a legislative cap) and to what extent the usual law on unfair dismissal will be diluted during such a period. What is clear, however, is that it will have major ramifications for employers, particularly when hiring employees and assessing their performance in the early months of employment.
Similarly, new rights to sick pay and parental leave from day one have been coupled with an immediate right to work flexibly as a default position. Labour have gone further than the Government, in connection to its recent changes to flexible working. Where the 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.
Time Limits
In addition, Labour have 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. Again, this will have a substantial impact on risk management for employers.
Two Tier Employee Status
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; giving all workers the full quota of rights currently enjoyed by ‘employees’ (such as the right to claim unfair dismissal). This will obviously have tax and National Insurance consequences for individuals and will create a larger pool of individuals with more significant employment rights. The much trailed ban on zero hours contracts, used for so-called casual workers, would also be made law.
Reorganisations and Unions
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.
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. The employer would, however, be required to justify the necessity of such an approach by demonstrating that the survival of the business depends on such action.
The ability of employees to lodge collective grievances through ACAS would also be implemented; giving employees another formal avenue of mediation in workplace disputes.
Labour would also introduce Fair Pay Agreements and repeal many of the anti-strike laws, recently implemented by the Government (such as requiring a minimum number of ballots before strike action can be taken and the expiry of a ballot mandate after six months). Although these proposals would make taking collective action much easier, they are understood to have been watered down when compared with initial policy plans, causing Sharon Graham of Unite the Union to comment that they had ‘more holes than Swiss cheese’.
Family Friendly Measures and the Right to 'Switch Off'
Family friendly legislation would also be introduced, including strengthened rights for pregnant women, which would see a ban on dismissing pregnant woman for any reason (except in exceptional circumstances) during pregnancy and up to six months after a return to work. There is also to be a right to bereavement leave for all workers and a right to ‘switch off’ when remote working, so working from home does not become homes turning into 24/7 offices.
Discrimination
Discrimination laws have also been targeted, with disability and ethnicity pay gap reporting on the agenda, similar to the current system of gender pay reporting. There would also be a requirement for menopause action plans to be published by employers with 250 or more employers, together with enhanced protections against sexual harassment in the workplace.
Conservatives
As has been mentioned, although there is no manifesto to scrutinise at this stage, media announcements by the Conservatives signal that they intend to focus on deregulation, by reducing employment rights and having ‘smarter’ regulation to grow the economy. This approach has already been evidenced by their commitment to have a ‘bonfire’ of EU rights through the implementation of the Retained EU Law (Revocation and Reform) Act 2023, which acted to strip back EU regulation and downgrade workers' rights.
Fit Notes
In light of that approach, it seems that there is an intention to introduce a more rigorous process when individuals seek to obtain Fit Notes during a sickness absence from work. The new process would require medical professionals to adopt a more objective approach when sanctioning such absences and there would be a keen focus on support measures, designed to return the individual to work. Overall, the emphasis would be to move away from the idea of the medical professional as simply an advocate for the worker, in terms of describing their health conditions.
Definition of Biological Sex
The Conservatives have vowed to change the definition, contained in The Equality Act 2010, of the protected characteristic of ‘sex’ to that of ‘biological sex’. Indeed, Equalities minister, Kemi Badenoch, has just announced that this is to be implemented to clear up ‘confusion’ among public bodies and institutions about access to female-only spaces. It is, however, unclear precisely what the changes will be and how they will enhance the existing laws.
Employment Tribunal Claims
Whilst Labour intend to make it much easier to lodge a claim with the Employment Tribunal, the Conservatives are to retain the two year qualifying period for unfair dismissal and the three month time limit in respect of the majority of claims. It seems that they are also likely to reintroduce employment tribunal fees, although it is expected that it will be for far more nominal amounts than those levied previously, to avoid any challenge that the fees prevent access to justice.
Contracts
Here, there is a proposal to cap the duration of non-compete clauses in employment contracts, a move no doubt designed to speed up the process of circulating employees back into the labour market.
Further, the Workers (Predictable Terms and Conditions) Act 2023, which gives workers a right to request a more predictable contract, is due to come into force in Autumn 2024, should the government remain a Conservative one.
Finally, depending on the outcome of the consultation, legislation already in the pipeline would be used to confirm that only employees (rather than workers) can transfer and assert rights, under any TUPE transfer.
Comment
Under Labour, individuals will have more employment rights and will likely become more litigious as a result. There is also likely to be less flexibility for employers and increased costs. It seems that Labour’s sop to business is that their package of reforms will result in a larger pool of individuals being attracted back into the workplace, due to enhanced rights and greater job security.
The fact that Labour are still keen to also try to appeal to employers can be illustrated by some of the changes that were notable by their absence, such as the removal of the cap on unfair dismissal compensation (currently at £115,115 or one year’s pay for the individual; whichever is the lower).
By contrast, the Conservatives seem to be largely relying on the status quo and their continued plans for deregulation, to remain attractive to business and stimulate the ever-elusive holy grail of economic recovery and growth.
Ultimately, whatever the outcome of the election, it is clear that there will be plenty for employers to consider in terms of managing their workforce in the coming months and years ahead.
Authored by Julie Sabba, Senior Associate, in the Employment Team.
