Ahead of the general election, Labour’s manifesto proposed a raft of employment law changes as the party made strengthening workers’ rights a key ambition for its first 100 days in office.
Now the party is in government, which of these changes are likely to be implemented first and how should employers prepare?
Reform of employment status
Currently, English law recognises three types of employment status: employees, workers and self-employed. Employees have extensive statutory rights and protections, workers only benefit from some – for example, the right to holiday pay and a minimum wage – and self-employed people do not benefit from any of the statutory protections provided to employees or workers.
Labour intends to consult on creating a single status of worker for all but the genuinely self-employed. They suggest that doing this will help to clamp down on “bogus” self-employment and create a much simpler framework for workers and employers alike.
What’s the impact on employers?
Employment status is complex and the proposals would align employment law with tax law principles, where individuals are either classified as employees or self-employed. However, the last time there was a consultation on reforming employment status, as part of the Taylor Review in 2017, it was abandoned due to complexities.
Employers should consider carrying out an audit of their workforce to determine the number of people in each of the current three status categories and the impact of having a single status of worker for all but those that are self-employed.
Impacted employers should consider contributing to the consultation when it is launched so they can have input and attempt to influence any law reform in this area.
Unfair dismissal
Labour wants to make unfair dismissal a day-one right. Currently it is a claim only permissible to employees which, in law, refers to those with two or more years of continuous service.
What’s the impact on employers?
This will undoubtedly fuel the number of unfair dismissal claims in employment tribunals, which are already struggling to manage the volume of claims presented to them.
Employers will face more cases as the right to bring a claim is extended. I suspect the courts may decide to instigate a screening system to only allow those cases with a reasonable chance of success to go through and the mooted payments to bring a claim may become more likely given the upshot of this extended right.
Ban on zero-hours contracts
Labour has proposed banning zero-hours contracts and giving workers “predictable” contracts instead. It claims this will provide all workers with a baseline level of security and ensure they get reasonable notice of any change in shifts or working time.
What’s the impact on employers?
Employers should consider their use of zero-hours contracts and what terms they currently have in place. Many employers are already moving away from zero-hours contracts but there are certain sectors, such as hospitality, where they are used more regularly.
Increased trade union rights
Labour has committed to repealing anti-trade-union legislation which removes workers’ rights, including the Trade Union Act 2016, in order to remove what it claims are unnecessary restrictions on trade union activity.
What’s the impact on employers?
Employers who are already involved with trade unions should monitor any proposals. In addition, employers in the adult social care sector should monitor discussions regarding fair pay agreements.
What’s still to come?
There are other proposals that have been discussed by Labour but which are yet to be confirmed. Employers should remain aware of them and their potential impact on the workplace:
- Outlawing the procedure of fire and rehire. Employers are currently permitted to consult and then dismiss their employees in order to rehire them and offer new – often worse – terms and conditions. It is presumed that banning this will be achieved by increasing protections under the unfair dismissal legislation.
- A ban on unpaid internships has also been suggested. This could mean that those seeking work experience would have the right to be paid the minimum wage.
