Labour’s Plan to Make Work Pay: Delivering a New Deal for Working People

“Britain’s outdated employment laws are not fit for the modern economy!” That is the line from the Labour party’s manifesto which includes a new deal for working people.

Its plans indicate huge changes ahead for businesses in the UK following Labour’s election win last Thursday. 

So, what are the headlines? Within this article we take a deep dive into Labour’s Plan to make work pay: Delivering a new deal for working people and what the key changes mean for businesses. 

Key changes

📋 Give all workers employment rights from day one on the job. This would end the qualifying periods for basic rights like unfair dismissal, sick pay, and parental leave. Labour have made clear that although the current two-year qualifying period will be removed, the use of probationary periods will be permitted (subject to fair and transparent rules and processes). Further emphasising the importance of ensuring businesses have probationary review processes in place. 

📋 Increase wages for workers.  This would have  an immediate increase for all adult workers earning less than £10 per hour under NMW to have their wage increased to at least a minimum of £10 an hour regardless of age.

📋 Trade Unions. Labour are keen to strengthen the collective voice of workers by enhancing union’s rights of access to the workplace and imposing a duty on employers to inform their staff of their right to join a union. Written statement of particulars must inform staff of their right to join a trade union and to inform staff of this regularly.

📋 Ban exploitive zero hours contracts and contracts without a minimum number of guaranteed hours. Furthermore, anyone working regular hours for 12 weeks or more will gain a right to a regular contract to reflect those hours normally worked.

📋 Increase Statutory Sick Pay (SSP) making it available to all workers, from day 1 of sickness by removing the current 3 day waiting period.

📋 Discrimination and Harassment: Strengthening women’s protections from maternity and menopause discrimination and sexual harassment (by imposing a duty on employers to take all reasonable steps to prevent sexual harassment: something already due to come into effect in October. In addition, Labour proposes to introduce a Race Equality Act to enshrine in law the right to equal pay for ethnic minorities, and strengthen protections against dual discrimination.

📋 Introduce Fair Pay Agreements to establish minimum T&C’s, negotiated through sectoral collective bargaining which would be binding on all employees and workers in each sector. Things like pay and pensions, working time, holidays, training, work organisation, diversity and inclusion, health & safety, and the deployment of new technologies.

📋 Ending Fire and re-hire (the practice of dismissing and then rehiring employees under new, often less favourable, contractual terms), where a business has no alternative option to remain viable and where a proper process has been followed. Whilst the proposal falls short of an absolute ban, this reflects Labour’s views that the recently updated Code of Practice on Dismissal and Re-engagement (due to come into effect on 18 July 2024), is not sufficient.

Other proposed headline changes 

  • Increase the time limit for bringing employment tribunal claims to six months from three months.
  • Right to switch off, so working from home does not become homes turning into 24/7 offices. 
  • Amend the threshold for collective redundancy consultation obligations to apply to the number of affected individuals across the business rather than at each separate establishment.
  • Ensure flexible working is “a genuine default” from day one for all workers except where it is “not reasonably feasible”.
  • Introduce a right to bereavement leave for all workers and the possibility of paid carers’ leave.
  • Permit collective grievances to be raised “to Acas”. It is currently unclear exactly what is meant by this proposal as grievances are made to an employer and not to Acas. It is possible that the intention is for Acas early conciliation to be permitted on a collective basis, but more likely that the intention is to allow for the possibility for collective grievances to be raised with employers.
  • Make it unlawful to dismiss a pregnant worker for six months after their return to work “except in specific circumstances” (yet to be defined).
  • Strengthen the rights and protections for workers subject to TUPE processes.
  • Ban unpaid internships except when they are part of an education or training course.

When will changes to be implemented?

Labour has reiterated its proposals to introduce legislation within 100 days and proposes to consult fully with employers, trade unions, experts and stakeholders before secondary legislation is passed. 

The New Deal document acknowledges that some proposals will take longer to review and implement than others. Ensure you are always up to date with any changes by subscribing to the shrewd HR newsletter here.

If you would like to discuss the implications for your business and to ensure you’re protecting your business, and your people reach out to shrewd HR today. 

The full details of Labour’s plans for change can be accessed here new deal for working people.