Labour's Employment Laws: What Might Change and How it Affects Your Business
Reforming employement law status
Labour have proposed to change the ways in which workers are represented under law. Previously, “employees” and “workers” have been different classifications under employment legislation, with different rights within their contracts.
However, Labour is proposing to change this classification to a single “worker” status. This means that both will be afforded the same rights, under law. This change doesn’t apply to “self-employed” workers, who will keep their separate status.
Whereas before workers could have less legal right to sick pay and other forms of working benefits, these proposed changes will mean that employers will be required to provide the same rights to all workers within their business. Outdated contracts which fall outside of these legal requirements will be unlawful upon the changes.
Day one right to unfair dismissal
Another substantial change that Labour proposes to introduce is the right to unfair dismissal from day one. Unfair dismissal, under the current employment law, is a right of workers who have surpassed two years within your business. However, Labour wants to make this a day one right – meaning that employees will be able to make a claim of unfair dismissal anytime during their contract.
This is an important change for businesses to be aware of, as it will impact the ways in which you can dismiss workers. While this could discourage many businesses from hiring new, instead relying on self-employed worker contracts, this change puts a higher focus on the importance of hiring the right workforces. This can reduce the need for dismissal, as well as reduce the likelihood of lengthy legal processes and compensation payouts (which Labour also propose to remove the cap on).
Statutory sick pay
Another day one right that Labour wants to introduce is statutory sick pay. The current law means that workers don’t receive statutory sick pay as a day one right, however they want to amend this to ensure that everyone can benefit from sick day throughout their entire contracted employment. This will also apply to self-employed contracts – meaning that every working status under law will be affected by this change.
This change could increase the chance of absenteeism within your workforces. Maintaining high retention rates and reducing absenteeism is important for your business productivity and success. By implementing workforce strategies that benefit your employees, you can offset the increase in absenteeism and improve productivity.
See our case study on reducing absenteeism here.
Banning zero-hour contracts
Labour have promised a ban for zero-hour contracts, as well as contracts without a guaranteed minimum number of hours. This means that workers with these flexible contracts will need to be placed on a regular contract. Any employee working regular hours for 12 weeks or more will be placed on regular contracted hours.
This change removes the uncertainty of unpredictable working hours. However, it also removes the flexibility that many workers within industries, such as hospitality and logistics, prefer. These changes mean that many businesses which rely on zero-hour contracts will need to reconsider how they’re hiring and employing workers.
Increase in wages
Labour also proposes a change to the national minimum wage. The national minimum wage currently sits at £8.60 per hour for employees aged 18-20, £6.40 for employees aged 16-17, and £6.40 for an apprentice rate. However, Labour proposes a minimum of £10 per hour for all ages. They also propose to review this regularly, in line with the cost-of-living crisis.
This increase in wages can be difficult for businesses, especially those with a tighter budget. Preparing for this change early can ensure that your business is in a place to comply when the national minimum wage does change. This might also impact your recruitment practices, with apprentices and younger workers no longer offering a cheap alternative to employment.
Fire and rehire practices
Labour plan to put a stop to ‘fire and rehire’ practices, which currently allow employers to fire workers who don’t agree to contractual changes and rehire them under new terms. This practice, at present, isn’t illegal, however it can be damaging to your businesses reputation and impact your employee relations.
By banning this, Labour wants to encourage better consultation procedures. Businesses should consider aligning with a trusted recruitment partner to ensure the compliance and success of contractual changes, as well as the wellbeing of employees.
Right to 'switch off'
The right to switch off is not a new concept within employment, with many countries including France and Australia already having similar legislation in place. This change in employment law will give workers the right to disconnect from work and not to be contacted outside of their contracted working hours. This comes alongside a shift in parental and bereavement leave, in which Labour intent to improve the rights of workers.
Businesses will need to take into consideration these changes when it comes to scheduling and fulfilling work demands. By building a workforce which is optimised for demand, you can ensure that your business doesn’t suffer from a loss in productivity, while maintaining high employee morale and good working relations from complying with these basic employment rights.
Tribunal claim periods
Labour also proposes to change the time in which employees can raise a tribunal claim against employers. The current time is up to three months. However, Labour intends to extend this period to six months.
This extended liability is important for businesses to know, as you might have to adjust your risk management strategies, HR practices, and record keeping. This could also mean your business might experience a higher volume of claims.
