What Labour’s ‘New Deal’ for workers could mean for your business.
After 14 years of Conservative rule, the Labour Party swept to a landslide victory in a historic general election last week. And regardless of your personal political persuasion, if you're a business owner, people leader, or HR professional, this change may have raised some questions for you. So - what will this mean for businesses and workers?
In May, as part of their manifesto the Labour Party announced their "Plan to Make Work Pay: Delivering A New Deal for Working People" - proposing some of the most significant changes and updates to UK Employment Law that most of us will have encountered in our careers.
Here's a quick breakdown of the key changes that are on the horizon:
Reform of employment status: At present, there are three types of employment status: employee, worker, and self-employed. Labour have proposed a single status of "worker", giving everyone the same basic rights and protections from day one.
Unfair dismissal: Currently, within the first two years of employment, it is not possible to bring an unfair dismissal claim (under most ordinary circumstances). Labour have proposed to make protection from being unfairly dismissed a right from day one. Furthermore, they have committed to removing the cap on compensation for unfair dismissal.
Statutory sick pay: At the moment employees have to wait for three days before they are entitled to statutory sick pay; Labour have proposed to change this to a day one right for all employees, including the self-employed.
Zero hours contracts: Labour have promised to eradicate contracts without a minimum number of guaranteed hours for anyone working regular hours for a 12-week period or more.
Minimum wage: Labour will increase the national minimum wage to at least £10 per hour for all workers (i.e. irrespective of age), and ensure it is continuously reviewed in line with the cost of living.
The right to ‘switch off’: In recent months, several countries in Europe, as well as Australia, have introduced the right to disconnect from work, and not be contacted outside of working hours. Following suit, Labour has proposed to introduce similar legislation in the UK, complemented by proposals to reform family rights, including parental and bereavement leave.
Banning fire and rehire: Whilst not considered the most ethical approach, some companies engage in the practice of dismissing employees who decline proposed contractual changes, and then rehiring them on new terms. The Labour Government plans to make this illegal and improve information and consultation procedures instead.
Tribunal claim time limits: At the moment employees only have three months from the date of an incident occurring to bring their claim to an employment tribunal. The Labour government intends to extend the timeframe to six months.
In summary
The Labour government has made promises to deliver a fairer deal for working people, and the effect on businesses may be significant.
Employers could face increased costs and time in dealing with these changes, and if the proposals come to fruition many facets of employment law will be affected, including talent acquisition, employment contracts and terms, approach to dismissals and the power of trade unions.
With Labour promising to deliver their first employment bill within 100 days of the election, get in touch with our expert team at hrteam@theinkgroup.co.uk if you’d like to discuss how we can help your business to ensure that your policies, handbooks and contracts are compliant as and when these changes occur.