In the lead-up to the election, the Labour Party proposed extensive reforms to UK employment law as part of “Labour’s Plan to Make Work Pay: Delivering A New Deal for Working People.” With the party securing a significant majority, UK employers can expect changes to employment laws and workplace regulations, with legislation expected to be put before Parliament within the first 100 days of Labour’s entry into government. Staying informed and planning ahead will be crucial for maintaining compliance and supporting your workforce, so we’ve pinpointed key proposals that will likely affect UK employers and practical steps to help you adapt effectively.
Anticipated Employment Policy Changes
Strengthened Employee Rights
- Unfair Dismissal and Parental Leave: Protection against unfair dismissal will become effective from day one of employment, eliminating the current one-year and 51-week service requirements. This change is expected to lead to an increase in dismissal claims, necessitating thorough and lawful dismissal procedures from the outset. Parental leave will also become a day-one right.
- Enhanced Maternity Protections: It will become unlawful to dismiss a woman during pregnancy or within six months of her return to work following maternity leave, except under specific circumstances. Employers must review and update their termination policies to comply with these new protections.
Redundancy Consultation Revisions
Labour intends to redefine redundancy consultation requirements to consider the number of redundancies across the entire business rather than at individual locations. This change means that even small-scale redundancies could trigger collective consultation obligations, especially for multi-site employers.
Expanded Pay Gap Reporting
Companies with over 250 employees will be mandated to report on gender, ethnicity, and disability pay gaps. Action plans to address these disparities will also become compulsory, increasing the administrative workload for larger employers.
Zero-Hours Contracts and Flexible Working
- Zero-Hours Contracts: The government plans to restrict zero-hours contracts, giving employees the right to stable contracts that reflect their regular hours over a 12-week period.
- Flexible Working: Flexible working arrangements will be the default from day one of employment, requiring employers to adjust their workforce management and scheduling practices accordingly.
Enforcement and Compliance
A Single Enforcement Body will be established to oversee workers’ rights, including health and safety, minimum wage, and exploitation. This body will have extensive powers to conduct inspections and enforce compliance, necessitating rigorous adherence to employment laws.
Living Wage Reform
- Cost of Living Adjustment: The Low Pay Commission’s remit will include cost of living considerations to ensure that the minimum wage meets workers’ basic needs.
- Uniform Minimum Wage: The discriminatory age bands will be eliminated, ensuring all adult workers receive the same minimum wage. Enforcement will be enhanced, with penalties for non-compliance.
Dismissal and Re-engagement
The Labour government has committed to ending the practice known as “fire and rehire” as a lawful means of imposing unilateral changes to an employee’s contractual terms of employment. The previous government attempted to reform this by implementing a Statutory Code of Practice on Dismissal and Re-engagement, but Labour is expected to replace this with new laws designed to regulate the practice.
Family Leave Rights
- Parental Leave: Parental leave will become available from day one of employment.
- Bereavement Leave: Entitlement to bereavement leave will be clarified and extended to all employees.
- Review of Carers’ Leave: The system of parental leave will be reviewed, and the Labour government plans to examine the potential benefits of introducing paid carers’ leave.
Workplace Harassment and Whistleblowing
The Labour government plans to strengthen protections against workplace harassment and provide women who report sexual harassment with the same protections from dismissal and detriment as other whistleblowers. New mandatory duties to prevent sexual harassment may also be implemented.
Trade Unions and Employment Status
Labour plans to update trade union legislation to make it easier for workers to join unions and for unions to operate effectively. A consultation on employment status will be carried out to simplify the framework and strengthen protections for the self-employed.
Practical Recommendations to Prepare
- Conduct a Proactive Pay Gap Analysis: Begin gathering data on ethnicity and disability pay gaps and create initial action plans to address any inequities. Taking these steps proactively will ensure you are prepared for new reporting requirements.
- Revise Employment Policies: Review and update your employment policies, focusing on areas such as dismissal, maternity leave, and redundancy, to comply with new regulations. Make sure your policies are dynamic documents that are regularly reviewed for compliance.
- Stay on Top of Record-Keeping: Keep comprehensive records of employment decisions, particularly those involving dismissals and redundancies. This practice is crucial for demonstrating compliance and safeguarding against potential claims.
- Invest in Staff Training: Offer training for HR and management teams on the new obligations to ensure smooth implementation and compliance. Having well-informed staff is essential for effectively navigating these changes.
- Adapt to Flexible Work Arrangements: Assess and update your current flexible working policies to make flexible working the standard for new employees. Adjust your workforce management and scheduling practices to support this transition.
By staying informed and proactive, you can effectively navigate these changes, ensuring compliance and maintaining a fair, supportive workplace. If you’d like any advice or support on preparing for these changes, don’t hesitate to get in touch.
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