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Labour’s plans for UK employment law – briefing for employers

It’s all change….so what really are Labour going to do with employment law now?

Some months ago during conference season I published an article on Labour’s proposals for employment law, enshrined in their Green Paper ‘A New Deal for Working People’.

Version 1 of that paper read like a Trade Union manifesto, not surprising as its author was Angela Rayner, Deputy Leader appointed by Labour’s biggest backers, the Trades Unions themselves. The Green Paper talked about the introduction of day 1 rights for things like unfair dismissal, the harmonisation of employment status into one single category of ‘worker’; the banning of zero hours contracts; and the banning of fire and rehire practices.

As the weeks rolled by & Labours victory in the polls began to look possible, the Party’s narrative evolved towards being a ‘Party for business’ and many of these proposals have been considerably watered down to make them more palatable to employers.

So, what’s left of Labour’s employment proposals, what actually will they do now that they have the keys?

The trade union landscape

Traditionally Labour is the union-friendly party, and so we would expect that a Labour government, whose primary funder is the trade union movement, to take steps to provide additional opportunities for unions to develop their reach.

The revised green paper, A New Deal for Working People, (now rebranded, ‘Labour’s Plans to Make Work Pay’) contains various references to improving access for unions, with simpler recognition procedures, modernisation of voting practices (moving from post to electronic) and improved access to workplaces for the purposes of recruiting new members.

Many of the proposals in the paper are now subject to consultations with employers and trade unions prior to implementation, meaning that many of the changes I will go on to describe will be some way off, if indeed they ever take effect.

The new paper does require employment particulars (and contracts) to include information on an employee’s right to join a trade union, and a new duty on employer to remind employees of this right ‘regularly’.

Fair pay agreements’

Deputy Labour leader Angela Rayner has championed sector by sector “fair pay agreements”, under which representatives of workers and employers would negotiate minimum standards for pay and terms and conditions for their particular sector.

These European-style ‘Social Plans’ would determine pay levels and termination compensation payments for each sector within the economy, and would be a major change for UK employers, who are currently used to setting their own pay and termination payments on national statutory standards, such as for the Living Wage and redundancy pay.

The new paper limits the first two such arrangements to the Social Care sector, with a similar sounding arrangement for Schools, the “School Support Staff Negotiation Body”.

Unlike the first version of the paper, the latest one stops short of suggesting that Fair Pay Agreements should then roll out to all other sectors, saying instead that [Fair Pay Agreements] are “not necessarily the best solution where existing collective arrangements at employer level are already working well and are supported by trade unions”.

The new paper heavily waters-down previous statements and now says that consultations would be required as to how Fair Pay Agreements could benefit other sectors. Our interpretation of this is that we shouldn’t expect these agreements in sectors other than care and schools any time soon. Employers will breathe a sigh of relief!

Repeal ‘anti-union’ laws and increase union access to UK workplaces

Labour have repeated their promise to repeal several anti-trade union laws, including the Strikes (Minimum Service Levels) Act 2023 passed earlier this year and the Trade Unions Act 2016, which introduced minimum turnout requirements for votes on industrial action.

In addition, the Labour Party have promised to introduce a new right for trade union officials to meet, represent, recruit and organise members, and to and give trade unions the right to access workplaces for the purposes of union activities.

Day 1 unfair dismissal and other employment rights for workers and employees

In the first version of the Green Paper, Labour stated it would provide all workers – except the genuinely self-employed – to the same rights including protection against unfair dismissal from their first day in employment.

Currently only ‘employees’ have full employment protection rights (including to unfair dismissal and redundancy pay etc), and even then they need 2 years continuous service to bring an unfair dismissal claim.

The latest paper says that harmonisation of worker and employee status will take time and require extensive consultation on the ramifications, and so changes in this area are, for the time being at least, confined to employees.

Further, the paper accepts that employers should have the right to test suitability of new employees via a probation period (within which standard unfair dismissal claims would be prohibited) and, in a further clarification, the paper expressly permits the use of fixed term contracts.

How long could a probation period be? We assume it won’t be allowed to be as long as 2 years, and are expecting further guidance on employer’s right to require a successful probation from new employees. If we were to place a bet, we think probation will be allowed to be a maximum of 1 year, but don’t quote us on that!

Statutory sick pay

SSP will be available for all workers (with the new paper excluding the previous express reference to the self-employed) and the lowest paid, confirming that this will mean the removal of the lower earnings thresholds and the current 3-day waiting period, representing an additional cost for employers.

Flexible working

Other than saying that flexible working should be a default day-1 right unless employers can show it to be impractical; Labour adds little to existing rights in this area, so no major changes here – the right to request flexible working from day-1 has already been introduced by the last Tory government.

Minimum wage

Previous commitments to increase Living and Minimum wages to particular pay levels have been replaced by a requirement for the Low Pay Commission to take into account the cost of living.

Elsewhere in the paper the Party commits to strengthening enforcement of the payment of the NMW/NLW for travel between workplaces – already a legal right, but a right perceived to be being dodged by some employers.

Ending “fire and rehire” practices

Previous commitments to ending these practices (which would have been almost impossible to enforce) are now focussed on strengthening the relatively recently introduced ACAS code on the practice, which encourages employers to consult fully to try to gain employee’s agreement to proposed changes to their contracts… basically not much change here.

Banning zero-hour contracts

The new paper now talks about banning ‘exploitative’ zero hours contracts rather than banning zero hours contracts all together. Effectively one-sided zero hours contracts were already banned by the Tories some years ago, so this is more about sticking to a left wing narrative than any meaningful change.

Workers will have a new right though to contracted hours based on a 12 week average of hours worked, and a right to compensation for cancelled or curtailed shifts ‘proportionate to the notice given’, the implication being that sufficient notice of cancellation would attract less or no compensation.

We need more detail from Labour before assessing any real impact of this beyond the existing protections, which already included a forthcoming right for variable hours employees to request a stable work pattern.

Other changes set out in the new Green Paper

The time limit to bring employment tribunal claims will increase from the current 3 months for most ET claims, to 6 months

Redundancy collective consultations (which apply when making 20 or more job reductions in a 90 day period) will in future be triggered if the reductions take place in one organisation, rather than in one location.

Whistleblowing legislation will be updated to protect workers reporting sexual harassment.

Employees will be able to raise collective grievances via ACAS.

Self employed people will have the right to a written contract.

Unpaid Carers leave may be paid in the future (presumably at the normal statutory rate for these types of leave).

A new Right to Switch Off may be introduced along the lines of Belgium legislation (we’ll publish more on this in a future article).

Unpaid internships will be banned, unless they form part of an established course or study programme.

A new single enforcement body will be established for the purposes of equal pay, with new legislation to enable better enforcement.

A single enforcement body will also be established for ensuring worker’s rights are being respected, with greater powers to investigate employers, focussing on sectors where low-compliance is common.

Larger organisations with 250+ employees will be required to publish ethnicity and disability pay gap reporting, in much the same way as Gender pay gap reporting, and will be required to have a menopause action plan in place to support women suffering from menopause symptoms in the workplace.

Health and safety legislation will be tightened in particular to regulate working in high temperatures; to ensure H&S legislation reflects diversity; and ensuring that adequate support is provided for mental and physical health; and to support long Covid sufferers.

Support with employment contracts and HR policies

Many of Labour’s intentions, if enacted (we know some already will be) will require changes to employment contracts and HR policies.

JCHR and myHRdept clients with HR outsourcing packages in place will have their policies and contracts updated automatically for them in a timely manner as a standard part of our services.

‘Hours only’ or ‘HR On-demand’ customers should contact us to arrange for necessary updates to be made.

If you’re thinking of outsourcing your HR, payroll or employment law needs, why not contact myHRdept? Call us on 01628 820515, email us at to discuss your requirements, or contact us via our website and we’ll call you back.

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