There's a lot in Labour's manifesto to sift through. Deciding what is wheat and what is chaff comes down to trying to imagine what will feel ‘really new’ for businesses on the ground, rather than a tweak to existing rights, in the event that Labour gets into power. A couple of things to note: the 'Make Work Pay' slogan trails the economic benefits of work (for the individual, for the country) as well as acknowledging that in-work poverty is a relatively new phenomenon that needs tackling. Labour promises the "biggest upgrade to rights at work for a generation" but anyone who remembers the introduction of the Employment Rights Act 1996 and the National Minimum Wage Act 1998 knows that the upgrade we saw in the late 1990s will be a hard act to follow. However, we can expect an Employment Bill in the first 100 days in office.
In reality many of the changes proposed in the manifesto will require consultation and the passage of legislation through Parliament. An Employment Bill in the first 100 days in office is not the same as legislation actually coming into force within that timescale. Leaving aside public sector clients, businesses should be most immediately alerted to the following significant proposals described in the manifesto:
- Unfair dismissal – remove the qualifying period (but still allow for dismissal during or at the end of a probationary period). Labour has now dropped the reference to lifting the cap on unfair dismissal damages, as referred to in a post last month on a ‘New Deal for Working People’ (a policy paper which the manifesto largely adopts). Increase time limits for claims in the Employment Tribunal from three to six months. The removal of the qualifying period (and the increase in time limits) will lead to an increase in claims and tribunal traffic. Arguably, it could lead to a decrease in unmeritorious discrimination or whistleblowing claims.
- Fire and rehire – end the practice of employers being able to dismiss workers and then rehire them on lesser terms. However, the manifesto acknowledges employers should be allowed to adopt this practice where there is no alternative in order for the business to survive, so clearly an absolute ban is not envisaged. The Acas 'code of practice on fire and rehire' (coming into force on 18 July 2024) is described as weak and will be replaced. The practice of fire and rehire has been described by Labour as a 'scourge' and the vehement language suggests this is a key manifesto promise that will be acted on quickly to establish a change of business culture.
- Gig economy/contingent workforce - end one-sided flexibility – which will consist of banning exploitative zero hours contracts (presumably some contracts will be characterised as non-exploitative) as well as entitling workers to regular contracts after 12 weeks. Note that we already have the Predictable Terms and Conditions Act 2023, with regulations due to come into force in the autumn, so this idea is not revolutionary.
- Create a single enforcement body which will ensure protection for vulnerable workers. Although this sounds distant and administrative, enforcement action is a game-changer and can force a business to conduct audits and consider reputational damage more seriously than when a single worker brings a claim.
- Remove the lower earnings limits for statutory sick pay (SSP) and make it a day one right, also reviewing the level it is paid at.
- Introduce a ‘real living wage’ and get rid of ‘discriminatory age bands’ for National Minimum Wage (NMW).
- 'Move toward a single status of worker' (getting rid of the employee/worker distinction).
- Strengthening trade unions and promoting collective bargaining in all workplaces, including for gig workers.
- Redundancy rights - reform the law on redundancy consultation so that the right to collective consultation is determined by the number of people impacted across the business rather than in one workplace or site. This would circumvent the current 'numbers game' (ie are there 20 or more proposed dismissals at one establishment?), whereby the collective consultation requirements are not triggered where there are say eight proposed dismissals at one site and 12 at another site on the basis that the two are separate 'establishments'.
- Pay gap reporting (gender and other) - make gender pay gap reporting more effective by requiring employers to have an 'action plan' to tackle the gap. Make it mandatory for employers with more than 250 staff to report on the pay gap for ethnicity and disability. This would be hugely complex (here are some thoughts from a couple of years ago on the challenges of ethnicity and disability pay gap reporting).
- Making flexible working default from day one for all workers, expect where it is not reasonably feasible. This is what could be described as a ‘tweak’ to current rights.
- Right to switch off – 'look at' other EU countries which have introduced the right to disconnect (eg Ireland and Belgium).
