What Labour’s Employment Plans Could Look Like

During the recent party conference, Labour outlined its intentions in a Green Paper titled A New Deal for Working People. Initially drafted by Deputy Leader Angela Rayner, a strong supporter of trade unions, the first version of the paper included proposals such as granting workers rights from day one of employment, merging employment statuses into a single ‘worker’ category, banning zero-hours contracts, and putting an end to fire-and-rehire practices.

However, as Labour’s chances of winning the election increased, their proposals were modified to appeal to businesses. So, what remains of their plans now that they hold the reins of government?

The Role of Trade Unions

As the traditional party of the trade unions, Labour is expected to strengthen their role. Their revised document, Labour’s Plans to Make Work Pay, includes measures aimed at increasing union access to workplaces and streamlining recognition processes. The introduction of electronic voting for union elections is also on the table, potentially making it easier for unions to gain support.

Labour plans to require employers to inform workers about their rights to join a union and to regularly remind them of these rights. However, many of these proposals are subject to ongoing consultations, so any changes could take time to materialise.

Fair Pay Agreements

A significant element of Labour’s proposals is the introduction of ‘fair pay agreements’. These sector-specific agreements would involve negotiations between worker and employer representatives to establish minimum standards for pay, terms, and conditions within particular sectors.

For now, Labour plans to introduce these agreements in the social care sector and within schools. Despite earlier ambitions to extend these agreements across various industries, the updated paper acknowledges that existing collective arrangements in some sectors may be working well, so a wider rollout is not guaranteed anytime soon.

Repealing Anti-Union Laws

Labour has reaffirmed its intention to repeal certain laws seen as anti-union, including the Strikes (Minimum Service Levels) Act 2023 and parts of the Trade Unions Act 2016. They also aim to give union officials enhanced rights to organise, recruit, and represent members in the workplace.

Employment Rights and Unfair Dismissal

Earlier versions of Labour’s Green Paper proposed extending unfair dismissal protections to all workers from their first day of employment. This would have been a radical shift, given that current laws only offer these protections to employees after two years of continuous service. However, the new version suggests these changes will take time, and employers will still be allowed to use probation periods to assess new hires.

Statutory Sick Pay and Flexible Working

Labour’s proposals include expanding statutory sick pay (SSP) to all workers by removing the lower earnings threshold and scrapping the current three-day waiting period. This will increase costs for employers, but Labour has not proposed extending SSP to the self-employed.

Regarding flexible working, Labour continues to support the right to request it from day one, though this has already been introduced under the previous Conservative government.

Minimum Wage and Zero-Hours Contracts

Labour has toned down its earlier commitment to significantly increase the minimum wage, opting instead to instruct the Low Pay Commission to factor in the cost of living when setting wage levels.

They have also shifted from banning zero-hours contracts entirely to focusing on banning exploitative ones. Workers on these contracts would gain the right to request contracted hours based on a 12-week average of hours worked, as well as compensation for cancelled shifts, depending on the notice given.

Other Key Changes

Labour also plans several additional changes, including:

• Extending the time limit for employment tribunal claims from three to six months.
• Revising whistleblowing legislation to protect those reporting sexual harassment.
• Updating health and safety laws to address issues like working in high temperatures and supporting workers with long Covid.
• Requiring larger employers to report on ethnicity and disability pay gaps and implement menopause action plans.

What This Means for Employers

If these proposals are enacted, employers will need to make adjustments to their HR policies and employment contracts. JCHR’s clients with outsourcing packages will receive these updates automatically. Other businesses are advised to review their policies in light of the potential changes.

Labour’s plans are ambitious, but many are still in the consultation stage, and it remains to be seen how many will be implemented. For now, employers should stay informed and be prepared to adapt.