The Labour Government’s planned changes to employment law

Tue 9th Jul 2024

With the Labour Party having taken power following the General Election last week, there are important implications for employers. Prior to their election, Labour had pledged multiple changes to UK employment law as part of their plan “Labour’s Plan to Make Work Pay: Delivering A New Deal for Working People”.

We are expecting several employment law changes to be put before Parliament within the first 100 days of taking over Government. These changes focus around the law on dismissals, redundancy and fire/rehire, and employment contracts to name a few.

Steph Marsh, Head of Coodes’ Employment team, examines these changes and what they could mean for your business.

Dismissals

Of the policies previously suggested by Labour, we are expecting:

  • Removal of the two year length of service requirement before an employee can bring a claim for unfair dismissal
  • Right to not be unfairly dismissed to become a “day one” right
  • Dismissal will still be allowed for failing probation but only if a fair process has been followed

What this will mean for employers:

  • Will remove the ability to dismiss new hires so employers will have to tighten their recruitment process to ensure the best candidates are hired
  • Potential for an increase in claims due to lack of length of service requirement
  • Probation process will need to be robust to ensure dismissals will be fair

Fire and rehire

We can expect tighter processes around the “fire and rehire” practice. This is to stop employers from dismissing workers and offering to re-engage on new, and usually more unfavourable terms.

A new code of practice was due to come into play on 18 July, but Labour would like to make the terms stronger. They are proposing to require employers to have more than a “substantial reason” to make any changes to terms and conditions of employment.

Redundancy and TUPE

Businesses and employers can expect the following changes to redundancy and TUPE under Labour:

  • Collective consultation requirement will come into play based on redundancies across the whole business, rather than a specific site or workplace
  • Rights for those TUPE transferring to be increased, but with more detail on that to come

This will mean that employers may need to carry out more collective consultations. This is because the requirement to consult will be for the amount of redundancies across the whole business, so employers will need to keep track of structural changes/plans closely.

Employment contracts

Employers can expect to see several changes to employment contracts:

  • Average hours contracts to be introduced, reflecting hours that are regularly worked and giving workers more certainty of their hours and pay
  • Zero hours contracts which are heavily in the employer’s favour to be banned
  • Employers will need to give sufficient notice if any shifts are to be cancelled at short notice

What will this mean for employers:

  • Flexibility for employers may be reduced as they will not be able to rely solely on zero hours contracts
  • Potential for staffing costs to increase due to the decrease in zero hours contracts

Employment status

One of the more drastic changes proposed is in relation to employment status. Currently, the UK has three levels of employment. However, Labour plan to create a single tier for workers and employees; so you are either a worker or self-employed.

Further details are to be considered, such as the tax implication and employment rights as workers currently have fewer rights than employees and so this will need to be balanced.

Those that are self-employed are to be given additional rights. This is in relation to trade unions, written contracts and health and safety protection.

Family rights and sickness

Whilst women on maternity leave already have enhanced protection from redundancy, Labour is wanting to extend this. They aim to prevent those returning from leave from being dismissed unless there is an exceptional circumstance. Although more information will be given on what that exactly that might be.

There are also four other expected changes:

  • Bereavement leave to be made a statutory entitlement
  • Potential for a week’s carer’s leave, which is currently unpaid, to be a paid entitlement
  • Statutory sick pay (SSP) to become payable from the first day of absence rather than after the fourth
  • Lower earnings limit for SSP to be removed

General principles

There are several other general changes we can expect to see:

  • Right to request flexible working will still remain a day one right unless it is not reasonably feasible for employers to grant
  • Right to disconnect to be created, allowing workers (especially those that work from home) to switch off out of hours and not be contacted
  • Employers already have a duty to take reasonable steps to prevent sexual harassment, but allegations may now be protected under whistleblowing legislation
  • Extension of time limit to bring an Employment Tribunal claim, from 3 months to 6 months

Next steps

If you are concerned about how any of the above employment legislation changes could impact you as an employer and are looking to get prepared, our Employment Team can help. The Employment Team always stay at the forefront of any upcoming legislative changes and can offer the most up-to-date advice and get to know your case fully.

For more information, you can contact Steph Marsh from our Employment Team via email or by calling 01579 324017. Alternatively, you can find all of our contact information and online contact form here.

Tue 9th Jul 2024

Steph Marsh

Head of Employment

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