Touted to introduce an employment law bill within their first 100 days in office, should they ascend to power, Labour’s plan aims to craft a “New Deal for Working People”. This ambitious agenda promises significant transformations in employment law, which could notably impact small and medium-sized businesses (SMBs) and their HR teams.

As the political landscape of the UK braces for potential shifts with the upcoming general election on 4th July, HR Optimisation is keenly observing the Labour Party’s proposals.

 

Unifying Worker Status: A Single Umbrella for All

A core element of Labour’s proposal is the redefinition of ‘worker’ status, effectively merging ’employee’ and ‘worker’ categories into a single, inclusive framework. This change aims to standardise employment rights across the board, simplifying the complex legal landscape that currently distinguishes between employees, workers, and the self-employed.

Robert Burden from Kane HR Consulting outlines that this shift will provide broader protections for those in casual or gig economy roles, granting them rights such as unfair dismissal protection and sick pay, which were previously reserved for employees. However, he cautions that this expansion could increase operational costs for businesses and necessitate overhauls in contract management and training programs to accommodate the new legal standards.

Enhancing Job Security from Day One

Labour proposes to allow employees to claim unfair dismissal from the very start of their employment, removing the current two-year waiting period. This policy is designed to offer immediate protection against unjust termination, fostering a more secure and loyal workforce.

While the intent is to promote fairness and stability, Robert Burden points out potential drawbacks for employers, including heightened legal risks and possibly more cautious hiring practices, particularly affecting the growth and flexibility of SMEs.

Restricting Zero-Hour Contracts and Promoting Regular Employment

In response to the precarious nature of zero-hour contracts, Labour aims to abolish them, offering rights to regular hours for anyone consistently working for 12 weeks or more. This move could improve job security and workers’ rights, potentially boosting morale and productivity. However, it might also reduce flexibility for businesses that rely on such contracts, especially in sectors like hospitality and retail, leading to higher operational costs.

Curbing ‘Fire and Rehire’ Practices

Labour’s agenda includes banning the controversial ‘fire and rehire’ tactics, where employees are dismissed and then rehired on less favourable terms. The party plans to enhance consultation procedures to ensure that changes in employment contracts are handled more ethically and consensually, potentially reducing workplace conflicts and fostering a fairer negotiation process.

Introducing the Right to Disconnect

Reflecting a growing international trend, Labour wishes to establish a legal ‘right to disconnect,’ allowing employees to unplug from work communications outside of working hours without repercussions. This policy aims to support a healthier work-life balance, potentially increasing overall job satisfaction and reducing burnout. Yet, the specifics of how this would be implemented remain to be clarified, especially regarding potential exemptions and enforcement mechanisms.

Extending Employment Tribunal Deadlines

Lastly, Labour intends to extend the timeframe for bringing claims to an employment tribunal from three to six months. This adjustment would give more time for employees to prepare their cases, particularly beneficial in situations involving complex issues like discrimination.

Conclusion

The Labour Party’s prospective employment law reforms suggest a significant shift towards enhancing worker protections and simplifying employment statuses. While these changes promise increased security and fairness for employees, they also pose challenges for employers, requiring adaptations in administrative practices and possibly leading to increased operational costs.

HR teams, especially within SMBs,  need to stay agile, preparing to update their policies and practices to align with the new legal framework. The potential changes underscore the importance of proactive HR planning and consultation to navigate the evolving employment landscape effectively.  If HR Optimisation can help you in these steps please don’t hesitate to get in touch on hello@HROptimisation.co.uk