Labour’s proposed employment law reforms

With the general election fast approaching, the Lodders Employment team outlines the Labour Party’s proposed employment law changes.

The Labour Party published its manifesto on 13 June 2024, ahead of the 4 July General Election. Whilst we at Lodders are not in the business of predicting the outcome of elections, Labour’s poll leads remain high. Clients are asking us – should Labour form a government – about the impact of their plans on the workplace.

Here, we outline some of Labour’s key employment-related policy commitments, contained both within its manifesto and its separate “New Deal” document.

Reform to employment law status

Labour will consult on a move towards a single status of worker, incorporating all but the genuinely self-employed. If enacted, this is likely to lead to a significant extension of statutory employment rights to a larger proportion of the workforce.

Day one rights

Currently, many statutory employment rights are only triggered once employees accrue certain minimum periods of qualifying service. Labour proposes to provide certain key rights from day one of employment, including the right to claim sick pay and parental leave.

Most significantly, it will introduce day one unfair dismissal rights, albeit with employers still being able to dismiss fairly during probationary periods by satisfying certain criteria. Day one unfair dismissal rights will represent a big shift away from the current legal requirement for two years’ service.

On previous occasions when the qualifying period for unfair dismissal claims has been reduced (under Tony Blair’s Labour government, for instance), the number of unfair dismissal claims has increased.

Extended limitation periods

Currently, employees have three months to initiate most claims to the employment tribunal. Labour proposes to increase this time limit for all relevant claims to six months, bringing them in line with the time limits for claims for statutory redundancy pay and equal pay.

Collective consultation rights

Collective consultation obligations on redundancies will become dependent on the number of redundancies being proposed across the whole business, rather than the current dependency on the number of proposed redundancies at each “establishment”. This is likely to lead to collective redundancy consultation being a required feature of a greater number of redundancy exercises.

Ending ‘fire and rehire’

Labour intends to end the practice of so-called “firing and rehiring”. This typically refers to employers dismissing employees and then re-engaging them immediately, upon the termination of their original contracts, but on different terms and conditions of employment. The New Deal document stops short of an outright ban – the devil will be in the detail.

Flexible working from day one

Labour has proposed a day one right to flexible working as a “default right” except where this is not reasonably feasible. This contrasts with current law which provides only a right to request flexible working.

Right to ‘switch off’

Labour’s plans include the introduction of the right for workers to ‘switch off’ (i.e. go offline) outside of working hours, following similar models in place in Ireland and Belgium. How this will work in practice remains to be seen. Some commentators are already referring to a right only for employees to “discuss switching off” with their employers, rather than an absolute right to switch off.

Section 1 statements

There will be a requirement for the section 1 statement issued to all new starters to inform staff of their right to join a trade union.

Menopause in the workplace

Labour proposes to require large employers with more than 250 employees to produce Menopause Action Plans.

Zero hours contracts

Banning exploitative (but not all) zero hours contracts.

Next steps

This is not an exhaustive list of all the changes Labour are proposing. Furthermore, it may take some time before the precise scope and impact of any such changes are properly understood.

Nonetheless, it is clear that, should Labour form a new government, interesting times lie ahead. There will be significant changes to workplace rights and responsibilities in the UK that will require employers to make changes to their employment contracts, their policies and procedures, and their working practices.

Help and advice

For advice on how these proposals may affect you or your business, please get in touch with Lodders’ expert Employment team who will be happy to help.