The General Election | Anticipated Employment Law changes if Labour win

A General Election is to be held on 4 July 2024. If the polls are correct and Labour is to win, then it is likely that some major changes are to be made to Employment Law. 

The Labour Party have set out their proposals for employment rights within “Labour’s Plan to Make Work Pay: Delivering a New Deal for Working People” and have committed within their general election manifesto to introduce legislation to implement the plan within 100 days of taking office. Below our Employment Law solicitor, Katie Bowen Nicholas, explores some of the key changes 

Basic individual rights from day one

Labour has proposed as part of their “New Deal” to end the qualifying periods for basic rights, such as unfair dismissal, sick pay and parental leave. This is a significant change as presently, to bring an ordinary unfair dismissal claim an employee must have been employed continuously for two years. 

Labour has stated that this change “will not prevent fair dismissal, which includes dismissal for reasons of capability, conduct or redundancy, or probationary periods with fair and transparent rules and processes”. However, this change is likely to lead to an increase in Employment Tribunal claims and employers will need to adjust how they currently manage employees in the first few months of employment to best protect themselves. For instance, employers should have robust policies in place e.g. performance policies and attendance policies, and demonstrate that they are following them. Employers may also want to consider introducing probationary periods or increasing the length of probationary periods. 

Zero-hour contracts

Labour intends to ban, what it terms “exploitative” zero-hour contracts, by ensuring that a baseline level of security and predictability is provided. Labour has confirmed that as part of their “New Deal” everyone should have the right to a contract that reflects the number of hours regularly worked, based on a twelve-week reference period. With regard to shifts/working time, Labour has committed to ensuring that all workers receive reasonable notice of any change, with compensation being provided that is proportionate to the notice given for cancelled or reduced shifts. 

Of note, Labour have confirmed that their plans will not affect fixed-term contracts, including for seasonal work or overtime.

Fire and rehire

The practice of 'fire and rehire', involves an employer terminating a contract with an employee and then re-engaging them on new terms, which tend to be less favourable.

Labour has stated that whilst “it is important that businesses can restructure to remain viable, preserve their workforce and the company when there is genuinely no alternative…this must follow a proper process based on dialogue and common understanding between employers and workers”. 

Labour has committed to reforming the law to ensure effective remedies are in place to prevent abuse and to replace the present statutory code with a strengthened code of practice is in place. 

Single status for worker

Currently, a three-tier system for employment status is in place within the UK, with individuals classified as employees, self-employed or workers. The level of employment rights and protections that an individual is entitled to differ depending on their classification, with employees currently afforded the most protection. 

Labour is of the view that the current three-tier system “has contributed to the rise of bogus self-employment, with some employers exploiting the complexity of the UK’s framework to deny people their legal rights.”

Labour intends to move towards a single status of worker and replace the three-tier system with what they deem to be a simpler two-part framework. Under the framework, workers and employees would have the same level of protection. 

How can Hegarty help?

Whilst the result of the election is not guaranteed, employers should bear in mind the significance of the changes proposed by Labour and consider what adjustments would need to be made. 

If you have any questions or concerns about the potential upcoming changes, please contact our Employment team today.