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Employment law shakeup under new Labour government

Updated: 6 days ago

UK Houses of Parliament
Labour promises full consultation with businesses before any new legislation is passed

The election of a new Labour government raises the question of what lies ahead in terms of UK employment law.

In the lead up to the General Election on 4 July, the Labour Party proposed extensive reforms in its 'Plan to Make Work Pay'. New legislation is expected to be put before Parliament within its first 100 days in office.

Traditionally, Labour leans towards a workers-first approach which can mean extra legal and administrative obligations for businesses, not to mention further costs. The Party says it will consult fully with employers and workers on how to implement the changes before legislation is passed, promising a balance between being pro-business and pro-worker.

Some of the key changes outlined in the manifesto include:

  1. Ending 'one-sided flexibility' by banning 'exploitative' zero-hours contracts and protecting workers against unfair dismissals. Clarity is still needed here, but businesses would be wise to prepare by auditing their workforce and assessing the use of zero-hours contracts.

  2. Cracking down on 'fire and rehire' practices, where employers dismiss employees and promptly rehire them under different or often less favourable terms and conditions. Exceptions might include where a business would otherwise be unviable and have no alternatives for its survival.

  3. Ensuring basic employee rights from day one, removing the two-year qualifying period for certain protections. Labour has emphasised that the plans will not prevent fair dismissals for reasons such as capability, conduct, or redundancy.

  4. Simplifying employment status into a two-tier system of worker or self-employed. Currently, an individual can be an employee, worker or self employed, which can make it difficult for workers to know their rights and for businesses to comply with legal obligations.

  5. Strengthening redundancy rights by ensuring the right to redundancy consultation, with trade unions or other employee representatives, is based on the total number of people affected across the entire business rather than in a single workplace

  6. Introducing the right to 'switch off' from work to help employees stay motivated and resilient. Labour says flexible and remote working practices, which evolved from the pandemic, blurred the lines between work and home life, and measures are needed to avoid homes being turned into 24/7 offices.

Clarification is still needed for employers and employees on how these proposed new laws will apply and any exceptions to the rules. The full proposals can be found in 'Labour's Plans to Make Work Pay: Delivering a New Deal for Working People'.

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