Upcoming Changes in Employment Law under the Labour Government

29th Jul 2024

Author: Mohammed Balal

Following the General Election on 4 July 2024, the UK now has a Labour-led government, guided by a manifesto published on 13 June 2024.

This manifesto pledges substantial reforms aimed at strengthening workers’ rights and conditions, aligning with Labour’s previous commitments outlined in Labour’s ‘Plan to make work pay: Delivering a new deal for working people’.

Key proposed reforms include the removal of the qualifying period for unfair dismissal claims, extending the time limits for bringing employment tribunal claims, and significant changes to trade union laws. In this article Employment Law specialist, Mohammed Balal analyses these proposed changes and their potential implications for employers and employees.

Removal of the Qualifying Period for Unfair Dismissal Claims

Current Law – Under the current legislation, employees must complete a two-year qualifying period to be eligible to bring an unfair dismissal claim. This provision aims to provide a balance between employer flexibility in managing their workforce and the protection of employees from arbitrary dismissal.

Proposed Change – The Labour government proposes to abolish this qualifying period, allowing all employees to bring unfair dismissal claims from the first day of their employment. This change aims to strengthen job security and provide immediate protection against unfair dismissal for all workers.

Implications:

For Employers: Employers may face a higher risk of unfair dismissal claims, necessitating a more attentive approach to performance management and disciplinary procedures. Additionally, HR departments will need to ensure they have fair dismissal procedures in place which may potentially increase administrative workload.

For Employees: With the ability to bring unfair dismissal claims from day one of employment, employees should benefit from a fairer and more just workplace environment.

Extension of Employment Tribunal Time Limits

Current Law – Currently, employees have three months from the date of the incident to bring forward claims to an employment tribunal. This timeframe includes claims related to unfair dismissal, discrimination, and wage disputes.

Proposed Change – Labour plans to extend this time limit to six months, providing employees with a longer period to start a claim. This extension is intended to give employees more time to seek legal advice and prepare their cases.

Implications:

For Employers: Businesses may experience prolonged periods of uncertainty regarding potential claims, which may impact workforce planning and financial forecasting. Businesses will also be required to maintain detailed employment records for longer to defend against claims effectively.

For Employees: There will be more time for employees to consider their legal options and gather evidence, potentially leading to more successful and well-prepared claims. The extended period may mean there  is less pressure to act quickly resulting in reduced more thoughtful and less stressful decision making.

Reforms Relating to Trade Unions

Current Law- Trade unions in the UK have the right to organise and represent employees, but are subject to strict legal requirements and restrictions. These include requirements for strike ballots and limitations on picketing.

Proposed Change – The Labour government has pledged to introduce significant reforms to trade union laws, aimed at strengthening their role and influence.

Specific proposals include:

• Easing Ballot Requirements: Simplifying the process for strike ballots, potentially including electronic voting.
• Enhanced Collective Bargaining: Expanding the scope and enforcement of collective bargaining agreements.
• Protection for Union Activities: Strengthening legal protections for union activities and members against discrimination and victimisation.

Implications:

For Employers: Due to the easier strike ballot procedures industrial action is likely to become more frequent. This means companies will need suitable preparation and contingency planning. Furthermore, increased scope and enforcement of collective bargaining agreements may shift in negotiation dynamics leading to higher wage demands and improved working conditions.

For Employees: There will be stronger representation for employees due to enhanced legal protection resulting in demands such as improved wages and working conditions being raised.

Strengthening Workers’ Rights in the Gig Economy

Current Law – The gig economy, characterised by short-term contracts and freelance work (for example zero-hour contracts), is governed by a complex mix of employment law and regulations. Many gig economy workers lack basic employment rights, such as sick pay and holiday pay, due to their classification as independent contractors.

Proposed Change – Labour intends to strengthen workers’ rights in the gig economy by reclassifying many gig economy workers as employees or workers with entitlements to basic employment rights. This includes the right to holiday pay, sick pay, and a guaranteed minimum wage.

Implications:

For Employers: Businesses operating in the gig economy may need to change employment models and will likely face increased costs due to providing employee benefits. Contractual agreements will also need to comply with the new legislation.

For Employees: Employees will benefit from access to essential employment rights resulting in better job security and working conditions. The right to sick pay will also prevent unnecessary stress, allowing people to take time off when required.

Enhanced Rights for Part-Time and Temporary employees

Current Law – Part-time and temporary employees currently enjoy certain protections under UK employment law, but these rights are often less comprehensive than those afforded to full-time employees.

Proposed Change – Labour aims to enhance the rights of part-time and temporary employees, ensuring they receive equal treatment and pay compared to their full-time counterparts. This includes measures to prevent discrimination and ensure pro-rata benefits and entitlements.

Implications:

For Employers: There may be increased costs for employers due to providing equal benefits, Employers will need to review and update their policies to reflect these additional benefits.

For Employees: There will likely be an increase in job satisfaction and loyalty among part time and temporary staff due to fairer treatment and improved working conditions.

Expanding Parental Leave and Flexible Working

Current Law – Current provisions for parental leave and flexible working are relatively generous but can vary significantly between employers. Statutory entitlements include maternity, paternity, and shared parental leave, with the right to request flexible working available to employees with a certain length of service.

Proposed Change – Labour plans to expand parental leave entitlements and make flexible working a default right for all workers. This includes extending the duration of maternity and paternity leave, increasing statutory pay rates, and removing the qualifying period for requesting flexible working arrangements.

Implications:

For Employers: Employers will need to accommodate longer parental leave periods and increased requests for flexible working. This will impact workforce planning and may be costly for employers. HR departments will also need to ensure compliance with new legislation.

For Employees: Expanded parental leave and flexible working rights will enable employees to better balance work and family responsibilities which will likely result in higher job satisfaction and retention rates.

Addressing Workplace Discrimination and Harassment

Current Law – The Equality Act 2010 provides a legal framework to protect individuals from discrimination and harassment in the workplace. However, enforcement and effectiveness vary, and many workers still experience discrimination based on age, gender, race, disability, and other protected characteristics.

Proposed Change – Labour intends to strengthen the enforcement of anti-discrimination laws and introduce new measures to tackle workplace harassment. This includes mandatory reporting of pay gaps, enhanced protections for whistleblowers, and stricter penalties for employers who fail to address discriminatory practices.

Implications:

For Employers: Businesses will have to implement policies and procedures to prevent discrimination and harassment if they are not already in place as well as ensuring compliance with reporting requirements. Employers face greater liability if they fail to address workplace discrimination requirements.

For Employees: Employees should see a safer and more inclusive working environments due to the enhances protections. There will also be enhanced protections for whistleblowers empowering employees to speak out about unfair treatment.

Timeline for Implementation

The Labour government has committed to introducing employment legislation within the first 100 days of the new parliament emphasising the priority of these reforms, suggesting prompt legislative changes.

Expected Legislation Milestones

• Initial Drafting: Early drafts of the proposed laws are expected to be presented within the first month.
• Parliamentary Debate: Subsequent debates, readings and revisions are anticipated to occur in the following months.
• Enactment: Final enactment of the legislation (Royal Assent) is likely to be achieved within the 100-day timeframe, ensuring prompt implementation of the new rules.

The Labour government’s proposed changes to employment law represent a significant shift towards enhancing worker protections and strengthening the role of trade unions. In addition, the new proposed changes reflect an extensive strategy to enhance workers’ rights, improve working conditions, and promote fairness in the workplace.

Employers will need to adapt to these changes by updating their policies and procedures to ensure compliance, while employees stand to benefit from increased job security and stronger representation. As the legislative process takes place, stakeholders will need to stay informed and engaged to navigate the evolving legal landscape effectively.

How can Butcher & Barlow Assist?

Navigating the complexities of employment law can be challenging, especially with the significant changes proposed by the Labour government. At Butcher & Barlow, our experienced Employment Law Solicitors are here to guide and support you in every aspect of HR and Employment Law.

For tailored guidance on how these changes may impact you or your business, contact our Employment Law Specialist, Mohammed Balal, at mbalal@butcher-barlow.co.uk or call him on 0161 764 4062.

Keep an eye out for our next article, which will focus on the changes announced in the King’s Speech.