The New Labour Government and Employment Law Reforms

Having won the general election last week (4 July 2024) by a landslide, the Labour Party is now in pole position to implement the significant employment law reforms previously pledged.

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On 24 May 2024, the Labour Party published: “Labour’s Plan to Make Work Pay: Delivering A New Deal for Working People”. Its manifesto followed on 13 June 2024, with a stated intention to implement the “New Deal”. A high-level summary of some of the more significant proposals and potential reforms include:

  • Introduce Day One Unfair Dismissal Rights – introduce protection against unfair dismissal from the first day of employment. Currently, there is a two-year qualifying period for unfair dismissal protection. It is thought that rather than scrap the qualifying period entirely, there will instead be tighter and more transparent rules around probation periods and the reasons for dismissing from day one.
  • Reform Fire and Rehire – limit the use of fire and rehire as means of changing terms and conditions of employment. While not proposing an outright ban, seemingly recognising there may be occasions where such a practice could be necessary to enable a business to restructure and remain viable, Labour appears to want to reform the law to provide more robust remedies and sanctions against those who abuse the practice.
  • Reform Threshold for Redundancy Consultation – extend the existing obligations so that collective consultation would be triggered by looking at the number of redundancies made across the business as a whole, rather than focusing solely on individual workplaces. Currently, consultation is only triggered if an individual workplace is considering making twenty or more employees redundant within a ninety-day period. This means that an employer could make a significant number of redundancies across several workplaces without triggering collective consultation, as long as each workplace makes less than twenty redundancies. 
  • Introduce Day One Statutory Sick Pay – introduce statutory sick pay from day one of sickness. Currently, there is a three-day waiting period, with statutory sick pay from day four onwards.
  • Introduce Menopause Plans – introduce a requirement for employers with more than two hundred and fifty employees to produce menopause action plans, detailing how they will support employees through the menopause. It is thought that the plans will be similar to existing gender pay gap actions plans.
  • Increase Employment Tribunal Time Limits – increase the time limit to bring a claim at the Employment Tribunal from the current three months to an extended six months.
  • Ban Zero Hours Contracts – ban zero hours contracts and ensure that workers have the right to a contract which reflects the hours they regularly work, which will be based on a twelve-week reference period. Employers will also be required to provide reasonable notice of any change in shifts or working time, with proportionate compensation given for cancelled shifts.
  • Extend Pay Gap Reporting – introduce a requirement for employers with more than two hundred and fifty employees to produce disability and ethnicity pay gap reports. It is thought that these will mirror the existing gender pay gap reporting requirements. 
  • Introduce a Right to Disconnect – introduce a right to switch off meaning that employees would have the right not to be contacted by their employers, and would have the right to disconnect from work, outside of normal working hours.
  • Ban Dismissing Maternity Leave Returners – ban the dismissing of maternity leave returners, except in specific circumstances, which are yet to be confirmed. This could be a significant extension to the existing redundancy protection rights.

Labour’s manifesto stated that legislation would be introduced to implement the “New Deal” within one hundred days of Labour entering office, so it seems reform could be imminent. We will update with more detail once it becomes available.

If you have any questions about the employment law reforms or would like to discuss how these Labour proposals will affect you and your organisation, please contact our specialist Employment Law team.

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The New Labour Government and Employment Law Reforms

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