What Would a Labour Government Mean for Employment Law?
Rishi Sunak is expected to call a general election in the second half of 2024, the media and the polls are indicating a Labour Party victory but if they are victorious what is the plan for Employment Law?
The Labour Party have proposed radical reform of the current law as part of a promised “New Deal for the Working People” so whether or not these proposals make their way to employees and employers, you will need to consider how they’ll impact you and your business.
Unfair Dismissal
As the current law stands an employee must have two years’ service (qualifying period) before they can bring an unfair dismissal claim, unless in specific circumstances of automatic unfair dismissal. This limitation has been changed over time including most recently in 2012 by the Conservative government who set the current level.
Labour’s most radical proposals will apply to unfair dismissal claims, the party intends to remove limits on bringing an unfair dismissal claim by removing the qualifying period altogether. The right to bring an unfair dismissal claim would be a day one right available for all, including an extension of the right to apply to workers.
Labour also intends to remove compensation limits, currently there is a compensatory award cap of £105,707 due to increase to £115,115 and a basic award is currently capped at £19,290 due to increase to £21,000 on 06 April 2024. The Green Paper states: “Labour will ensure that workers will receive full compensation, without statutory limits, if they suffer loss because of employers’ breaches of the law”. The position would bring this in line with discrimination claims where there is no cap on the amount an employee can receive.
The party have also commented on their position with fire and rehire tactics outlining that the practice will be outlawed completely. The effect of these changes would mean greater rights and protections for all workers but could have serious consequences for businesses who need to change their terms of employment but receive no agreement, some businesses could go bust if they are unable to honour previous contractual terms.
The already stretched Tribunals are likely to feel the effects of these changes which would allow a greater influx of claims.
In order to prepare for effects of these proposed changes, employers should:
- Adopt a detailed recruitment process.
- Review and make use of probationary periods.
- Review policies and procedures, including performance management procedures.
- Manage staff thoroughly and invest into training.
- Adopt a full and fair process for all decision making.
Ban on Zero-Hours Contracts
Labour’s proposed changes for zero-hour contracts include:
- Banning zero-hour contracts
- Ensure that anyone who works regular hours for 12 or more weeks will gain a right to a contract reflecting their regular working hours; and
- Ensuring workers get reasonable notice of any changes in shifts and are entitled to their pay if shifts are cancelled without appropriate notice.
The law on zero-hours contracts has been in contention for some time and whilst some see them as a negative others welcome the flexibility that comes with the contracts. If you use zero-hours contracts you likely need flexibility in the workforce and employee those who also welcome this route including young people working alongside their studies who might be able to work longer hours in peak summer periods and take no hours during critical examination periods.
If you are any employer who uses zero-hour contracts, you might consider taking some steps to prepare:
- Review your workforce, are there staff who are on zero-hours contracts who do not need to be or would rather have a regular hours contract which the business can allow for.
- Can different working arrangements be considered, for example agency work.
Other proposals:
In addition to the above, Labour have given additional proposals in relation to:
- The balance of work and home life, including the right for workers to disconnect and give flexible working.
- The reform of employment status to create a single worker status; and
- The expansion of trade union rights.
We will of course keep you updated following the outcome of the general election. If you do have any queries regarding any of the points above and what they might mean for your business, or if you have a query on another area of employment law, our friendly and professional team are here to help. Please speak with one of our Employment Law team on 01246 555 111 or contact:
Amy Hallam
Head of Employment
t: 0114 3496989
e: amy.hallam@brmlaw.co.uk
Ellie Leatherday
Associate
t: 01246 564002
e: ellie.leatherday@brmlaw.co.uk
Jade Taylor
Trainee Solicitor
t: 01246 560587
e: jade.taylor@brmlaw.co.uk
