Looking at Labour’s workplace pledges as Britain goes to the polls

With pollsters and bookies alike calling the odds in Labour’s favour for the upcoming general election on 4 July 2024, it seems likely that the employment law landscape could shift dramatically.

Labour published its manifesto on Thursday 13 June, which includes a pledge to implement its ‘Plan to Make Work Pay: Delivering A New Deal for Working People’, This ‘New Deal’ promises to introduce legislative reforms; a new ‘Employment Rights Bill’ within the first 100 days of entering government. However, they have also pledged to consult with businesses before passing legislation, and so the majority of any reforms are unlikely to take effect immediately: it is a long path for a pre-election promise to become an enacted law.

Two cornerstone proposals within Labour’s plan are:

Affecting businesses engaging workers: consulting on “Reforming employment law status”

There are currently three categories of employment status in the UK with different associated rights:

1. Employees: gold-plated employment rights, particularly after two years’ service
2. Workers: hybrid rights, including to the National Minimum Wage (“NMW”), paid holiday and working time rights
3. Self-employed: limited employment rights.

Labour’s plan is to consult on amalgamating the first two categories to create a two-tier system of “worker” status and “self-employed” status. Under the proposal, all current “workers” will become eligible for rights to protection from unfair dismissal – including the right to statutory redundancy pay – statutory minimum notice, and family and sick leave. This change is also likely to lead to even greater scrutiny on whether the self-employed are genuinely self-employed, or should fall into the new worker category.

We are advising clients to audit their workforces to map the number of current employees, workers and self-employed contractors. This is something with which we can assist, particularly in light of the complexities of applying the current legal framework, along with forecasting the potential associated costs of the change and to consider making changes to working arrangements.

Primarily affecting businesses using bank work and in the gig economy and in the residential care and hospitality industries: “Banning exploitative zero hour contracts.”

Labour has backtracked on its original proposal to ban zero-hour contracts for workers. Its more recent proposal seems to be to create the right to a contractually-agreed minimal level of guaranteed work based on a 12-week reference period.

We understand that this right will not affect workers who wish to be on a zero hour contract, provided that it is not “exploitative”. If the reforms take effect, we can assist clients to update their contracts and policies to reflect the legislative requirements and best practice.

Alongside ‘Making Work Pay’, Labour has published ambitious intentions for reform in many other areas of employment law. Kier Starmer announced fundamental reform of the qualifying period for unfair dismissal (from three to six months), some form of ban on ‘fire and rehire’ and significant strengthening of union rights / rolling back the changes made by the Conservative Government.