Understanding the impact of the new Labour Government for employers
The results of this year’s UK general election are in, and it was a Labour win with a significant majority. This shift in political power is set to bring about substantial changes, particularly for employers.
In the King’s Speech, it was confirmed that the “Government is committed to making work pay and will legislate to introduce a new deal for working people to ban exploitative practices and enhance employment rights [Employment Rights Bill]”.
Whilst we wait to see further details on exact timescales and plans, we’ve provided a quick overview of some of the changes we could expect from the Labour government, based on their manifesto pledges.
Key Labour Manifesto Pledges for Employers and Employees
Day-One Rights Labour has committed to removing qualifying periods for basic rights such as unfair dismissal, sick pay and parental leave. This means that employees will be protected from day-one of their employment.
Single Status of Worker Labour pledged to implement a single worker status (unless someone is genuinely self-employed). They pledged to remove the distinction between employees and workers, ensuring all workers receive the same basic rights and protections. This includes sick pay, holiday pay, parental leave and protection against unfair dismissal.
Strengthen Rights Another key pledge was to strengthen existing rights and protections for various groups including pregnant workers, whistle-blowers and those made redundant. In addition, Labour plan to encourage employers to sign up to the “Dying to Work” charter to support workers with a terminal illness.
Self-Employment Rights Self-employed individuals will gain the right to a written contract, providing more security and clarity in their working conditions.
Wage Reforms Labour aims to remove age bandings in the current wage system and require the Low Pay Commission to consider the cost of living when recommending rates. Additionally, they plan to ensure paid travel time in sectors with multiple working sites and address unpaid internships. These changes are designed to promote fairer wages, which can improve worker satisfaction and retention.
Statutory Sick Pay (SSP) SSP will be made available to all workers without a waiting period. The rate will represent fair earnings replacement, ensuring workers are supported during illness.
Tip Allocation New laws will ensure hospitality workers receive their tips in full and have a say in how tips are allocated. This will increase transparency and fairness in the hospitality sector.
Closing Pay Gaps A mandatory publication of ethnicity and disability pay gaps for firms with over 250 staff will be required.
Tackling Harassment Employers will be required to create and maintain workplaces free from harassment, including third-party harassment.
Flexible Working Flexible working will become the default from day one for all workers, unless it’s not reasonably feasible. This will appeal to candidates seeking work-life balance and could make companies offering this an employer of choice.
Family-Friendly Policies Parental leave will become a day-one right, and new rights to bereavement leave and better protection for pregnant employees will be introduced.
Caring Responsibilities Labour will review the implementation of carer’s leave and examine the benefits of introducing paid carer’s leave. This could lead to more inclusive workplace policies, supporting employees with caring responsibilities.
Zero-Hours Contracts Another pledge is to remove ‘exploitative’ zero hours contracts. This means that one-sided flexibility in zero-hours contracts could be banned, and regular hours for 12 weeks will entitle workers to a regular contract.
Fire and Re-Hire Practices Labour plans to improve consultation procedures and replace statutory Code of Practice with a stronger one.
Wellbeing and Health Labour plans to support the long-term physical and mental health of workers and assess regulations for those with Long COVID.
Menopause Action Plans Large employers are expected to be required to produce Menopause Action Plans. This highlights the need for inclusive health policies in the workplace.
Right to Switch Off A new right to disconnect will protect workers from remote surveillance. Employers will need to respect this right and adjust remote working policies.
Artificial Intelligence (AI) Labour will examine the impact of AI and new technologies on jobs and skills, working with various stakeholders. This could lead to new regulations and practices in the tech sector.
Trade Union Laws Strengthening trade union rights and simplifying recognition processes will be a focus. Employers should prepare for increased union activity and collaboration.
Enforcement Rights Labour plans to extend the time limit for bringing employment tribunal claims to six months, simplify equal pay enforcement and establish a single enforcement body. This will enhance workers' ability to seek justice and require employers to maintain high standards of compliance.
What This Means for Employers
These changes may require a review of current HR policies and practices to ensure compliance with new regulations. The increased worker protections and rights have been implemented to improve employee satisfaction and retention, ultimately benefiting the business.
For candidates, the strengthened rights and protections should provide greater security and attractiveness in various roles. Flexible working conditions and fairer pay structures are likely to draw more talent into the workforce, making it a competitive market for top positions.
