Political landscape change

Labour have certainly landed with a bang when it comes to employment legislation. Employers would be well-advised to closely monitor developments to avoid getting caught out by some potentially significant changes. Of course, the implementation will take time, nevertheless the outcomes could fundamentally change the HR landscape.

On the to-do list, we currently find the following:

Outlawing ‘exploitative’ zero-hours contracts and consultation on worker status

We haven't yet been given details on what the definition of ‘exploitative’ is in relation to zero-hour contracts. Labour have made it clear that they are looking to protect workers' rights and steer us towards more commitment when it comes to employment contracts (they call this ‘Securonomics’).

It is unlikely that casual contracts will be eradicated altogether, but it may mean that employers are required to justify such an arrangement to a greater extent.

In their manifesto, Labour state that contracts should reflect typical hours worked over a 12-week reference period.

Reform of the confusing employment status landscape is part of this promise, which would give us one category of ‘employee’, irradicating the grey area of workers who are self employed but should really be subject to PAYE.

For employers this means a clear decision: is this person employed by me – with all the rights and responsibilities that this brings – or not?

Removal of age ranges on National Minimum / Living Wage

Unsurprisingly, the new government call the current staggering of minimum wage rates exploitative and discriminatory, and most of us would agree.

However, some industries will be hugely affected by having to pay everyone what is deemed to be a Living Wage, so consultation is currently under way to find a less painful way of implementing the changes. Of course, this may impact the rates of employment of younger, less experienced workers, which could provide us with skill-gap issues further down the road.

Apprenticeship focus

Hopefully counteracting the above, apprenticeships are back in focus and will receive additional backing.

Those of us remembering the last Labour period may recall more hands-on placement support by highly qualified NVQ assessors and funding options that mean employing apprentices pays – we’re awaiting details on what this will look like in practice over the coming years.

So far, the only definite statement we have received is that the government are committed to fundamentally reforming the apprenticeship levy.

A reform of ‘fire and rehire’

Already a controversial topic, ‘fire and rehire’ applies when employees are dismissed and then offered a new contract, typically on less beneficial terms. The practice is already frowned upon so a ban wouldn’t come as a complete surprise.

This does not, of course, remove the right to consult over changes or make employees redundant, should a role change fundamentally.

Day one rights for unfair dismissal (subject to a probation period), sick pay and parental leave

One of the more significant change proposals, this would mean that all employees would have access to SSP from day one of their employment.

In addition, being able to claim unfair dismissal from day one would put more pressure on employers to manage conduct and performance immediately and within a set probation period.

Currently, probation periods don’t in legal terms carry much weight, since employers have the right to dismiss at any point during the first two years, as long as they follow a fair process and don’t dismiss for reasons that would be automatically unfair (i.e. discrimination, whistleblowing etc.)

Under the new proposal, it is vitally important to implement probation reviews, conduct them on time, document them and make a decision on the employee’s suitability much earlier than many of us currently do.

Removing the lower earnings limit for Statutory Sick Pay (SSP)

This, alongside day one rights to SSP, will have a huge impact on employers, particularly those who cannot reclaim SSP.

Reform of collective consultation to count all employees across every location

To a degree, this is already something employers must consider, following the disputes surrounding the Woolworths closures around 10 years ago.

To establish if collective consultation of 90 days applies in cases of redundancy, restructure and TUPE, employers must consider if their different locations count as ‘one establishment’.

Hopefully, the promised reform will make it clearer what the threshold for this definition is.

In addition, expect a drive to unionise! Labour have promised to support unionisation and strengthen collective bargaining rights.

Enhancing redundancy protections relating to maternity

In April this year, we saw the introduction of the Protection from Redundancy (Pregnancy and Family Leave) Act 2023.

Pregnant employees and those on maternity leave already had the right to special consideration when it comes to redundancy consultations. This may include being offered opportunities for redeployment, trial periods and upskilling to maintain their contracts of employment.

Under the new rules, the protected period has been extended to begin when an expectant mother informs their employer of their pregnancy and ends 18 months after birth, if they tell their employer the birth date before their maternity leave ends.

The same applies to adoption leave but instead equates to 18 months after a child’s placement date or entry date into the UK, if adopting from abroad.

It is unlikely we will see any major changes to this recently introduced legislation, but the government are certainly driving the enforcement of the rules.

Right to switch off

Already adopted by many other countries, the right to switch off officially gives employees the right to not work beyond their contracted hours.

Realistically, this new legal right only enforces rules already in place and arguably won’t have a huge impact on a company’s culture when it comes to working outside of work. However, it sends a clear message that the government are focused on.

Ramping up mental health support

The new government are promising more support, particularly for young people, which should hopefully mean reduced time off for mental health related issues.

The modernisation of the Mental Health Act predicts a positive impact on NHS waiting times, lower unemployment rates for those off work due to poor mental health and less bureaucracy when it comes to accessing help.

Positive action to help people get back into work

No details on this shopping list item so far, other than that the current system isn’t working. While initial indications were that disability benefits will be reviewed and tightened, current plans focus more on encouragement to rejoin the workforce by increasing support and workplace flexibility.

Ensuring flexible working is a genuine default

Huge show of commitment to flexible working and the application of technology! We are being told that flexible contracts, particularly when it comes to workplace location, should be a default and only changed where absolutely necessary.

Ensuring outsourced workers are included in gender pay gap reporting

It remains to be confirmed if this includes agency workers and subcontractors. If so, many more organisations could be required to report on their gender pay gap.

There has also been discussion around the reporting of ethnicity pay gaps but this has so far not been confirmed.

Consulting on whether carer’s leave should be paid

Despite new legislation only having been introduced earlier this year, the detail will now be under scrutiny. The Government are aware of the potential impact paid carer’s leave could have on small employers, so will tread carefully.

Technology and surveillance

The message here is clear: utilise technology but don’t use it unlawfully! We can expect greater clarity on the use of AI in the workplace, in particular relation to work rate monitoring and surveillance, fundamentally re-enforcing elements of the Human Rights Act.

Aside from these big ticket items, talks have also begun to decide on changes to the tribunal system, the eradication of workplace discrimination and menopause support.

As always, we will keep you posted on developments as soon as we know more details.

More than ever, it is important to contact your assigned HR consultant, should you be unsure about a particular process or procedure.

We have a turbulent few months ahead of us during Labour’s 100-day plan, but your ADVISOR team is here to support you!