Further to our blog following the announcement of an election, we now have some more direction from the Labour Party should they win power on 4 July 2024.  

They released their latest document, Labour’s Plan to Make Work Pay. The language is laced in ‘campaign speak’ so inevitably big on promise and low on practicality. But we can still ask the ‘What questions’.

• What are the main headlines?
• What will be the time frame for any change

What are the main headlines?*

Securonomics is key to Labour’s plans; giving working people security in their day-to-day lives, and removing what they deem the current one-sided flexibility in favour of employers.

Zero hours contracts - there has been flip-flopping on this recently, but this paper confirms the ‘banning of exploitative zero hours contracts and ensuring everyone has the right to have a contract that reflects the number of hours they regularly work, based on a twelve-week reference period’.  We don’t know for certain whether all zero-hours contracts are considered exploitative or whether some will survive the cull but our strong expectation is that the use of the word 'exploitative' is to enable the continued use of zero-hours contracts where the worker has genuine choice about working under a zero hours contract. Workers will be entitled to compensation for cancelled or changing shifts. We do know that seasonal and fixed-term contracts will remain lawful.

Fire and rehire - whilst Labour notes that businesses need to restructure and remain viable, they continue to drill down on their intention to ban this practice, introduce remedies against abuse and toughen up the present government’s code of practice. It's still unclear exactly how this will work in practice.

Day one rights - giving workers day one rights to unfair dismissal, parental rights and statutory sick pay, will provide more flexibility to move more readily from their roles into higher paying ones secure in the knowledge that they will be protected from day one. As we noted in our blog, probationary periods will still be permitted although we wait to see whether there will be some curbs on their abuse if employers try and introduce long periods so as to counteract the qualification periods.

Single status for employees - there will be no distinction between worker and employee. The proposal is that those currently treated as workers will be entitled to the rights and benefits accorded to employees. There is also an intention to give the genuinely self-employed specific rights, including the right to a written contract. This will need some more thought as the notion appears to cut across the concept of self-employment.

Family friendly rights - a review of the parental leave system is promised and provides that parental leave is a day-one right. Alongside this, flexible working will become the ‘default’ – we need more detail on that to tease open exactly what that means.

Pay - the minimum wage will going forward take account of the cost of living and will be a set amount regardless of the age of the worker being paid. Alongside this, statutory sick pay will no longer have a lower earnings limit and will be available from day one; the waiting period will be removed.  

Adult social care - the Fair Deal makes the bold claim of ‘fixing adult social care’ promising a new deal for social care workers. This fixing will start with a new Fair Pay Agreement (FPA) for the sector ‘empowering workers and the trade unions that represent them’ to negotiate on fair pay and conditions. This rather assumes that the social care workforce is unionised. The reality is somewhat different so it’s hard to see how this FPA will be brokered. More recently, the Liberal Democrats announced their solution to pay in the sector. A carer’s minimum wage which is £2.00 above the national minimum wage. A regulated rate would bring some certainty and remove the need for regular re-negotiation as the rate would increase alongside NMW.  

Trade Union rights - not surprisingly ‘strengthening the rights of working people by empowering workers to organise collectively through trade unions’ is a key Labour message. They will do this by updating trade union legislation and removing what they deem unnecessary restrictions on TU activity. They will simplify the process of union recognition, especially in the gig economy and what they deem precarious sectors. They will also review the process for statutory recognition claims and address current thresholds.

Discrimination - ethnicity and disability pay gap reporting will be introduced for organisations with over 250 employees, third-party harassment provisions will be re-instated, and large employers with over 250 employees will be required to provide a menopause action play.

And finally… Tribunal limits… for those of you who have suffered from the creaking of the tribunal system with hearings cancelled and delayed for months even years, the announcement that the time limit for bringing a claim will extend to six months for all claims will not necessarily be a welcome one. This will inevitably lead to more claims within the tribunal system but there is a promise of more digitalisation of tribunals to speed up the workflow. This increase in claims will be compounded by the fact that employees will be able to bring an unfair dismissal claim from day one as per the removal of the qualifying period we noted above.  

What will be the time frame for any change?

Labour’s intention to introduce an Employment Rights Bill within the first 100 days of office has been clear for some time. They reiterate their commitment to be both pro-worker and pro-business and their commitment to a proper parliamentary process and implementation period. So, whilst the Bill might be presented before Parliament within 100 days, it might be two years post-election before some of its provisions take effect. 

What we don’t know, however at this stage is what changes they will introduce through the Bill and what will trickle through other secondary legislation which does not require the lengthy discussion and debate within Parliament.

Changes to the national minimum wage will not require lengthy debate and the removal of the qualification period for unfair dismissals is an easy change to make. 

How they will ban ‘exploitative zero-hours contracts’ is unclear – in 2016 the Conservative Government of the day used regulations to prohibit exclusivity clauses in zero-hours contracts. However, the present government introduced the Workers (Predictable Term and Conditions) Act 2023 last year in their attempt to regulate this area. (NB whilst this Act received Royal Assent the regulations bringing into force were not agreed at the time of the election so we do not think it will come into force post-election).

One aspect we will not see in the Bill is the single status of workers; the New Deal notes a detailed consultation process which recognises this will not be done within the first 100 days of office.

Please continue to follow our blogs and our podcasts for more updates and information.  

In the meantime, please contact me if you would like any specific advice for your organisation concerning what we have covered above.

*our headlines are not an exhaustive list of Labour’s New Deal but rather highlight salient issues for our clients and sectors.