UK: Labour's Employment Reform Pledges

The Topline

What is this likely to mean for employers?

Labour's proposals are currently at headline rather than detail stage. One thing is clear however, and that is that strengthening trade union rights and protections will be front and centre of their reform agenda should they take office. Set out below are the key pledges that Labour have made so far.

The Labour Party pledges to:

Strengthen trade union rights

• Giving trade unions a new legal right to access workplaces.
• Repealing (within 100 days of office) the Conservative government's 'anti-TU' laws limiting the right to ballot for industrial action.
• Simplifying the statutory union recognition process to help gig economy and remote workers organise through trade unions.

Our comment

Any detail on these pledges is yet to be confirmed but the clear take-away is that a Labour government would adopt an interventionist approach and would move quickly to introduce legislation strengthening trade union rights and powers.

Provide a day one right to claim unfair dismissal (subject to contractual probationary periods)

Our comment

If unfair dismissal becomes a day one right, all employers (large or small) are going to need to have really solid and effective performance management processes in place for staff on probationary periods. Selection and recruitment processes will need to be even more rigorous and effective than at present. Day one unfair dismissal rights will present a new business risk and preparedness will be key.

End 'fire and rehire' practices

This to be achieved by enhancing information and consultation obligations and amending legislation around unfair dismissal.

Our comment

As set out in Section B [link to this] this is an area of reform currently under consultation with the proposal to introduce a new Statutory Code of Practice and a potential compensation uplift of 25% for breach of the Code. Labour's proposals are likely to go even further than this.

Introduce a new right to 'switch off' (from email, calls and messages) outside working hours

Our comment

Labour has said that working from home should not become homes turning into 24/7 offices. Few employers would disagree as blurred boundaries between work and home don't benefit anyone. A right to disconnect may well assist employers with staff wellbeing and in maintaining a happy and productive workforce.

Ban zero-hours contracts and introduce a right to request a contract which reflects actual hours worked after 12 weeks.

Our comment

This pledge reflects changes already due to come into force in 2024 under the Workers (Predictable Terms and Conditions) Act 2023 [link to article on this in Section A] but Labour's proposals will go further, for example, by banning zero-hours contracts altogether.

Make ethnicity pay gap reporting mandatory for firms with more than 250 staff

Our comment

Ethnicity pay gap reporting has been on the agenda for some time. In 2022, the current Government reversed its original commitment to make it mandatory. It published guidance in April 2023 for employers who wished to voluntarily report on their ethnicity pay Introduction and overview – GOV.UK (www.gov.uk)

In summary

Labour's pledges certainly demonstrate its intention as to the direction of travel it would take in government but there is little in the way of detail at this stage. This is underlined by the response of Unite the union to the TUC speech – that the "devil will be in the detail".

Save perhaps for the repeal of 'anti-trade union legislation', nothing will happen overnight. Employers can rest assured that they will have time to prepare. The "cast iron commitment" to introduce an Employment Bill within the first 100 days of office is only to introduce the Bill to Parliament. The cogs and wheels of the normal parliamentary process still have to turn.

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