Employment law under Labour: what does the 'new deal' look like?

How could employment law change under Keir Starmer if Labour go on to win the general election?

With a general election looming, and polls leaning toward the UK having a Labour government, employers might be wondering how working life might change following the vote on 4 July.

Labour’s proposals for employment law reform are rather substantial, and could have significant legal and practical implications. Although how things would change in practice remains to be seen, it’s useful for employers to have one eye on the possible landscape.  Here are some of the key things Labour’s ‘New Deal for Working People’ (supplemented by the newly-released ‘Labour’s Plan to Make Work Pay’) sets out.

A single status of worker

At present, staff can be classed as either ‘employee’, ‘worker’ or ‘self-employed’, depending on the circumstances of their engagement. Employees have access to more employment rights than both other categories, with self-employed people having access to the fewest.

Labour proposes to move towards a single status of worker and transition towards a simpler, two-part framework for employment status. How those categories will be defined is not yet clear.

All workers to have day one rights

Labour proposes that all ‘workers’ – as they will be newly defined, presumably – will have access to ‘basic individual rights’, such as unfair dismissal, sick pay and parental leave from day one of employment. It is not clear, but it stands to reason that things like the right to statutory redundancy and TUPE rights could be included.

This is perhaps the most significant change proposed by Labour, because, if the qualifying period for unfair dismissal rights are removed, it will dramatically impact the way in which employers can tackle dismissals of short-term employees and alter the way tribunal claims are approached.

Employers may be expected to follow ACAS dismissal procedures from day one, which would be very challenging from a time and resource standpoint, and would increase legal risk. Labour have clarified that they will not prevent the fair dismissal of employees for reasons of “capability, conduct or redundancy, or probationary periods” and have stressed that they will ensure employers can operate probationary periods to assess new hires, but there is no further detail on how this will look.

Ending ‘fire & rehire’ and zero hours contracts

Labour have said they will end controversial fire and rehire practices and strengthen the statutory code of practice. Although initially stating they would also ban zero hours contracts, the implication now appears to be proposing, instead, that employers would be required to offer a regular-hours contract, but that a worker could opt out.

Extend time to make tribunal claims

In line with the Law Commission recommendation in April 2020, Labour have promised to increase the time limit within which employees are able to make an employment claim from three months to six months.

Redundancy rights and TUPE

Labour have pledged to strengthen redundancy rights and protections, for example, by ensuring the right to redundancy consultation is determined by the number of people impacted across the business rather than in one workplace.

Other proposed employment law changes

Other key proposals include:

• the ‘right to switch off’ and work autonomously
• updating trade union legislation to fit a modern economy
• further protections for self-employed workers
• strengthening statutory sick pay.

Of course, we are watching this space for further details as the election campaigns progress.

In the meantime, if you have any questions or queries regarding employment law, please don’t hesitate to get in touch.

Our Legal 500-rated employment law & business immigration team are experts in guiding businesses of all sizes and backgrounds through a range of issues that may arise, including those related to updated legislation.