Contact us today - 0330 094 9338
Contact us today - 0330 094 9338
We are in the final phase of the countdown to the General Election. Each political party presents a distinct approach to employment law, reflecting their broader political philosophies and priorities. As the election date draws near, these proposals have been one area (amongst many) of intense debate and scrutiny.
Traditionally the party of workers, Labour has placed employment law changes high on its agenda. Labour has published an employment specific document, entitled: ‘Plan to Make Work Pay: ‘Delivering a new deal for working people’. This document makes clear Labour’s intention to deliver ‘the biggest upgrade to rights at work for a generation’, promising to ‘boost wages, make work more secure and support working people to thrive – delivering a genuine living wage, banning exploitative zero-hour contracts, and ending fire and rehire.’
Labour proposes significant reforms to strengthen workers’ rights and promote fair employment practices, pledging to ‘back working people to take their voice back, improve their terms and conditions and ensuring protections at work are fit for the world today.’
Labour’s manifesto includes a statement to implement the Plan to Make Work Pay document in full, ‘introducing legislation within 100 days’. Outlined below are some of the key proposals.
Single ‘worker’ employment status:
This is perhaps one of the most fundamental changes which has been proposed. The intention is that a two-tier system (of ‘workers’ and ‘self-employed’) will replace the current three-tier system for employment status (with people classified as either ‘employees’, or ‘self-employed’ or ‘workers’). The three-tier system often causes confusion as to what rights individuals are entitled to. Workers, for example, are entitled to holiday pay and protection from discrimination, but have no protection against unfair dismissal.
The aim of Labour’s proposal is to avoid ambiguity and to give individuals a clearer understanding of what protections they are entitled to. How easy such a system would be to implement remains to be seen, although Labour has announced a consultation ‘in detail’ prior to introducing any changes.
Enhancing family-friendly rights:
Proposals include a review of parental leave and ensuring that workers can benefit from flexible working (which would become a default right unless employers have a good reason to refuse it), as well as introducing a right to ‘switch off’ outside normal working hours.
Day one rights:
In another radical proposal, certain key employment rights will be made available from day one, including accessing rights of protection against unfair dismissal and the right to sick pay and parental leave. Currently, an employee can only bring a claim for unfair dismissal (with limited exceptions, for example whistleblowing), on completion of two years’ service.
Living wage:
Labour has pledged to introduce a ‘real living wage’, including the abolishment of age bands which set different minimum wages for those between the age of 16 and 21. Under these plans, we would see the introduction of a single National Living Wage for all workers aged 16 and over.
Zero-Hours contracts:
Labour pledges to ‘ban exploitative zero hours contracts’. The intention is to phase out zero-hours contracts, with the stated aim to ensure all workers receive ‘security and predictability’.
Fire and rehire:
Labour will end fire and rehire (the practice of an employer making an employee redundant and then re-engaging them on reduced terms and conditions). Fire and rehire will only be possible when the business might not survive without it.
There are also various other proposals, which may impact businesses and individuals, including a right for employees to have a contract which reflects the hours they regularly work (based on a twelve-week reference period), an extension of tribunal time limits for bringing all claims from three months to six months, a requirement for employers with more than 250 employees to have a menopause action plan, new duties on large employers to produce ethnicity and disability pay gap reports, and introducing a right to unpaid bereavement leave (currently only available following the death of a child).
It is important for employers to consider the impact of the proposals, to prepare for potential change, and to undertake an early review of business procedures and processes to stay one step ahead of likely changes. This is a good opportunity for a review of documentation, irrespective of which party is elected.
We suggest the following steps are taken to prepare for potential changes:
Stay informed: keep up-to-date with Labour’s proposed policies and any developments in their agenda (watch this space!).
Undertake an audit of contracts and policies: evaluate your current employment contracts and policies to see whether they align with Labour’s anticipated changes.
Review current contractual probationary clauses in particular to ensure that there is a clear probationary period with the right to extend it.
Enhance employee relations: encourage open communication with employees about potential changes and seek their input on improving workplace practices. This might include a shift towards more flexible working arrangements, such as remote working and flexible hours.
Consider your recruitment practices and ensure that performance management and disciplinary policies enable you to deal effectively with unsuitable new hires.
Plan for the financial impact of changes: assess the financial implications for your business of potential changes (such as increased wages or enhanced employee benefits) and budget accordingly. Check whether you have insurance protection against the legal costs of defending Employment Tribunal claims.
If you are planning any changes which might be affected by the proposals, for example fire and re-hire, act sooner rather than later.
If you have more than 250 employees, audit your reward mechanisms and consider whether any changes to remuneration structures are needed.
For strategic advice and support on employment law matters please contact Boardside on 0330 0949338