The Labour Party's Proposed Changes to Employment

By Laura Davies and Jennifer Marsden-Lambert

For the first time in over a decade the UK has a Labour government. Now their position in office has been confirmed, it’s important to understand what may be to come.

The party has set out several changes, with Liz Kendall, the newly appointed Secretary of Work and Pensions, being openly critical of the Conservatives’ approach to employment. In a recent speech she stated that over 850,000 people under the age of 24 are not either in education, employment, or training, adding that currently there are more food banks than police stations in the UK. This information has been seen as validation for Labour’s extensive “Plan to Make Work Pay”. This white paper outlines their plans are for the future in regards to employment.

Here’s an insight into the changes it seems the new Labour government are proposing to make:

Genuine living wage

In an attempt to tackle the increasingly poor living standards across the UK, Labour have suggested an increase to the minimum wage. The motivation to do this is to create a standard of pay that reflects the cost of living today. Labour have also proposed to ensure all workers over the age of 16 are entitled to £10 per hour. To calculate the new minimum wage, the cost of living will be considered in addition to the median wage and economic conditions of the UK. Critics have suggested that another solution could be to raise the basic threshold for income tax - which would lift many out of poverty instantly - rather than putting the onus entirely on employers to pick up the bill, at a time when they, too, are often squeezed due to inflation.

Ending ‘one-sided’ flexibility

Labour has previously suggested it is particularly keen to end ‘one-sided’ flexibility and provide all workers with a degree of security. Their viewpoint that zero-hours are a tool for exploitation and that workers have a right to a contract explains the parties desire to ban the working style altogether. However, proponents of of zero hours - on both sides of the employment relationship - frequently point to the benefits such arrangements can have for certain employees by offering the benefits of employment without the commitment to work fixed hours.

If Labour proceed, the change may be characterised by an expectation for all workers to have a contract that reflects the number of hours they regularly work, based on a twelve-week reference period. Employers could also be required to provide reasonable notice of any change in shift and working time. If a shift is to be cancelled, compensation which is proportionate to the notice given is required. However, there is no indication the proposal would prevent employers from offering fixed term contracts, annualised hours or seasonal work which might be alternative solutions employers look to implement if the proposal comes into play.

Fire and Rehire

Like the Conservatives, Labour seem set on ending the practice of ‘fire and rehire’ by reforming the law. Labour party sources have called this practice a form of bullying and that they aim to implement a reformed code of practice to replace the current statutory code. Proponents of the change say that this change means workers can feel comfortable in the fact that their negotiated terms and conditions cannot be taken away due to the threat of dismissal.

However, Labour has recently seemed to recognise the importance of businesses being able to restructure. While they stand firm that there must be a defined process based on communication and common understanding between employers and workers, it seems this wouldn't be a blanket ban on imposing any changes.

Equality at work

More than 50 years on from the Equal Pay Act, the party is still driving efforts to end pay discrimination at work. One such example is by putting measures in place to prevent outsourcing of services, which aid employers in avoiding paying equal pay. Labour have also recognised that the current equal pay framework is inaccessible, they are intending to implement a regulatory and enforcement unit for equal pay with involvement from trade unions, and also strengthen the Equality Impact Assessment for public sector bodies. Proposals also include extending Pay Reporting to other protected characteristics for large employers.

Flexible working

The pandemic revealed how flexible the UK workforce and industry can be. Notwithstanding the critics of flexible and home working, many continue to argue that our approach to employment should reflect our ability to adapt and that, on balance, this is beneficial. In keeping with the growing extension of flexible working rights, Labour are also committed to making flexible working available in all industries where it is possible. In addition, there has been discussion of implementing flexi-time contracts and hours which are intended to accommodate school terms, thus making working more parent friendly.

The Right to Switch Off

Following the decision to promote flexible working, Labour recognised the potential for risk of homes becoming 24/7 offices. To minimise the effect of constant access to a workspace, Labour have backed the ‘right to switch off’. This could take the form of the right for employees to raise a request, or recommendations for bespoke workplace policies that encourage the worker to disconnect when needed. However, it seems likely that this will be implemented pragmatically, to allow both employer and worker to set boundaries and create a positive work-life balance.

Single status of worker

Currently in the UK there is a three-tier system for employment status - self-employed, employee, or

worker. The category determines access to various employment rights. The distinction between the role of employee and worker has notoriously been blurred, which often results in individuals, employers and even HMRC being unsure of how to treat workers and what they are entitled to - Labour have proposed a transition to a simpler two-part framework: self-employed and worker. We are awaiting further details on this proposal.

Basic day one rights

Labour are aiming to extend day-one rights to all workers. A few examples of the day-one rights are protection against unfair dismissal, sick pay, and parental leave. This could mean that the current two-year qualifying period for unfair dismissa; rights would be removed. Previously, the unfair dismissal period has been 1 year and 6 months, but not a day one right.

This policy does allow employers to continue to offer probationary periods with clear and fair rules, which provide the grounds for fair dismissal, allowing for a period of time to assess new hires appropriately.

Self-employment

To improve the experience of self-employed individuals, Labour have proposed that they have the right to a written contract. Their plans to strengthen trade unions will also benefit self-employed workers, perhaps due to the rise of the 'gig' economy through companies such as Uber. Again, we are awaiting further details on how this could take shape, and this could face revision following consultation with industry.

Employment tribunals

Labour has said it will improve employment tribunals to make them quicker and more effective resolutions, this is to minimise the strain that currently exists on the civil courts. Another proposed change is the time limit within which employees are able to make an employment claim which could be increased from three to six months. This would mean the time limit for all claims is in line with the time for statutory redundancy and equal pay.

Maternity discrimination

The party has also said it will look to strengthen the rights of pregnant women by making it unlawful to dismiss a woman who is pregnant for six months after her return to work, except in specific circumstances.

Whilst the details of these circumstances have not been fully outlined, we can infer some possible

exceptions based on existing employment law and information the Labour party has provided. Some specific circumstances could be gross misconduct, redundancy or serious performance issues. It is unclear how this could differ specifically from existing rules or how it could work alongside the the recent redundancy protections introduced under the Conservatives.

Menopause in the workplace

Employers with more than 250 workers could be expected to produce a Menopause Action Plan, which will outline how they will support each worker through menopause. To support this, Labour has said it will release guidance on measures that employers can consider (i.e., uniform, temperature, recording menopause related leave).

Labour are proposing big changes to the UK employment landscape, in many different forms. It will be interesting to see what actually gets implemented in the proposed form, given the manifesto did not give as much detail as their previous white paper.

If you would like some support in understanding these proposals and what this means for you and your existing company policies, then get in touch with us here at Second Chapter and we’ll be happy to help.

About Laura Davies

Laura is currently studying sociology at Loughborough University and is working as HR Assistant here at Second Chapter in order to gain an invaluable insight into the industry.

Her degree and wider interests have always been centred around people, so starting her career in a people focussed industry seemed like the right choice.

Outside of work and university Laura's interests are painting, reading, shopping, travel and socialising with her friends.