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Employment Law Changes: What to Expect if Labour Win the 2024/25 General Election

It might feel to some of us (if not many), that the last General Election was not that long ago, but the Prime Minister, Rishi Sunak, has recently decided that the next election will be on Thursday 4th July.

So, what might a General Election mean for employment law? Perhaps unsurprisingly, it is the Labour Party that have had the most to say on the matter so far.

The Conservatives and Liberal Democrats have not yet made formal announcements regarding Employment Policies in the event that they are re-elected/elected (other than the Liberal Democrats announcements on Parental Leave).

Accordingly, this article focusses on the policy announcements made by the Labour Party. If the opinion polls are right, these are also likely to be the most significant.

What are Labour’s employment policy plans and how would they impact workplace practices?

The Labour Party originally published a green paper in October 2022, “A New Deal for Working People“, which was subsequently republished on Labour’s website on 1st January 2024 (New Deal green paper).

The New Deal green paper sets out a considerable number of proposed wide-ranging reforms to employment law.

Speaking at the TUC annual conference on 12th September 2023, Angela Rayner MP, promised that Labour would introduce an Employment Rights Bill within the first 100 days of entering office.

The Bill is reportedly already in draft form, although within the past few weeks it has been suggested that the timeline for actually implementing some of the changes might slip.

What are the key changes to employment law proposed by Labour?

Day One Rights

Some “basic rights” would be provided from day one. These would include unfair dismissal protection and entitlement to sick pay and parental leave.

While this suggests that the current two-year qualifying period for claims of ordinary unfair dismissal would no longer apply, it has been reported that Labour does not intend such a change to qualifying periods to prevent employers from applying probationary periods with fair and transparent rules and processes.

What we don’t know yet is how long will the permitted probationary periods be?

Discrimination and Diversity, Equality & Inclusion

A number of commitments have been made in the areas of discrimination and diversity, equity and inclusion (DEI). In particular:

  • The Equality Act would be amended to introduce a duty on employers to implement measures to “stop sexual harassment before it starts”, together with a new statutory code of practice setting out the obligations on employers.
  • Employers would be liable if they were informed of any sexual harassment and did not take appropriate steps or had not taken measures to prevent it in the first place.
  • It is not clear whether the proposed duty would go further in other respects than the new mandatory duty to prevent sexual harassment in the workplace which is expected to come into force in October 2024.

Employment Tribunal Proceedings

The time limit within which to commence an employment tribunal claim would be increased from the usual time limit of three months to six months.

There would be tougher penalties on employers who break the law or fail to comply with tribunal orders. This would include introducing personal liability for company directors,

Labour has also indicated it would remove any caps on compensation payable to workers following an employer’s breach of the law.

If enacted, the existing statutory cap on unfair dismissal compensation and the cap on a week’s pay for the purposes of calculating certain compensatory payments, would cease to apply.

Family Friendly Rights

Labour has committed to extending statutory maternity and paternity leave, introducing a statutory right to bereavement leave and urgently reviewing the shared parental leave framework.

It would also make it unlawful to dismiss a woman during pregnancy or within six months of her return to work, except in specified circumstances.

Statutory Sick Pay

The level of statutory sick pay (SSP) would be increased and made available to all workers, including the self-employed and those earning less than the Lower Earnings Limit who are currently excluded.

Other areas that Labour has suggested will be subject to changes if they are elected include:

  • Apprenticeship Levy – This would be abolished and replaced with a growth and skills levy.
  • Dismissal and Re-engagement – Labour has committed to end the practice of “fire and rehire” as a lawful means of changing an employee’s contractual terms.
  • Employment Status – The New Deal green paper states that Labour would create a single status of “worker” for all but the genuinely self-employed, to replace the current three-tier structure of employment status (employees, workers and self-employed).
  • Ending one-sided Flexibility – Labour had initially committed to a ban on zero-hours contracts. However, it was reported on 1st May 2024, that this commitment may be watered down with employees retaining a right to opt for a zero-hours contract.
  • Health & Safety – Health and safety enforcement to be overhauled.
  • Modern Slavery – Labour would introduce joint and several liability between companies in a supply chain to ensure accountability if slavery or other criminal labour exploitation is discovered.
  • Right to Disconnect and Work Autonomously – A new “right to switch off” would be introduced. Workers would have the right to disconnect from work outside of working hours and not be contacted by their employer.

Summary of Labour’s employment policy plans

Overall, the proposed changes are hugely significant and have the potential to fundamentally impact the way in which businesses operate with respect to their employees.

If introduced, the changes will need to be given serious consideration by employers in terms of recruitment, general day to day operations and policy implementation.

We will provide further updates on the proposals of both the Conservative Party and the Liberal Democrats if/when policy announcements are made.

How can Morr & Co help?

If you have any questions or would like further information on the content of this article, please do not hesitate to contact our Employment team, by email [email protected] or by calling 01737 854500.

Disclaimer

Although correct at the time of publication, the contents of this newsletter/blog are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Please contact us for the latest legal position.


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