Labour landslide – what does that mean for employment rights?

Following Labour’s historic victory last week, our attention swiftly turns to the changes to employment law which Labour proposes to implement within the first 100 days of its ascension to office under a new Employment Rights Bill. In an interview with Laura Kuenssberg on Sunday 7 July, cabinet minister Jonathan Reynolds confirmed that the new government was already “getting started on the process”.

Our most recent insight ‘What is Labour Proposing?’ considers some of these proposals in more depth. However, taking into account the proposals in Labour’s 2021 Green Paper ‘A New Deal for Working People’, the leaked amended Green Paper of May 2024 and their subsequent Manifesto of June 2024, we envisage some movement on the following proposals in the fairly immediate future.  

1.      Introducing Day One Employment Rights

Arguably the most significant proposals are those that will see basic rights afforded to all workers from the first day of employment.

Labour suggests it will move quickly on abolishing the three-day waiting period for statutory sick pay by including it within the Employment Rights Bill. Furthermore, Labour suggests it will give day-one rights for parental leave, though it is unclear whether ‘parental leave’ means all statutory family leave rights or just unpaid ‘parental leave’ of up to 18 weeks per child.

Of particular interest is Labour’s proposal to remove the two-year qualification period for unfair dismissal claims, effectively providing a day-one right to employees to claim unfair dismissal. The Labour Manifesto did not elaborate on this point, however, the suggestion in the leaked amended Green Paper is that it will not prevent the use of probationary periods with fair and transparent rules and processes. Although, there is no detail yet on how the probationary exemption would work in practice.

2.      Ban on ‘Exploitative’ Zero Hours Contracts

Labour intends to remove ‘one-sided flexibility’ by giving workers who are on zero-hours contracts, but who work regular hours, a right to contract with guaranteed minimum hours, reflecting the hours they regularly work over a twelve-week reference period.

3.      Tightening Restrictions on Fire and Rehire

Labour intends to tighten restrictions on the practice of firing employees only to re-engage them on less favourable terms and conditions. Whilst not an outright ban, it is suggested that employers will only be permitted to follow fire and rehire practices in genuine restructuring where consultation has taken place and alternatives have been considered.

4.      Increasing Minimum Wage

Labour has confirmed that it will adjust the minimum wage to reflect the cost of living by providing what it describes as a genuine minimum wage. Furthermore, Labour intends to remove age bands on the national minimum wage to ensure all adults receive the same minimum wage.

5.      Introducing the ‘Right to Disconnect’

Whilst not specifically outlined in their Manifesto, Labour has pledged to assist autonomy in the workplace and improve the lives of working people.

It is unclear whether Labour intends to follow the likes of France and Belgium and implement a statutory right to disconnect or whether they will simply encourage employers to have “constructive conversations” about disconnecting as suggested in the leaked amended Green Paper.

6.      Strengthening Trade Unions

In the 2021 Green Paper, Labour suggested it will repeal recent Conservative trade union laws and implement statutory recognition of unions as well as enhance union rights of access to the workplace and impose a duty on employers to inform staff of their right to join a union.

The Labour Manifesto echoes its pledge to strengthen trade unions and we would therefore expect some of, if not all, the proposals in the Green Paper to take effect.

7.      Increasing Employment Tribunal Limitation Period

Under the current system, most tribunal claims must be brought within three months of the act complained of. In the New Deal, Labour proposed extending this from three months to six.

8.      Increasing Women’s Equality in the Workplace

In its Manifesto, Labour states that Women’s equality will be at the heart of its missions by transforming the lives of working women, including strengthening rights to equal pay and protection from maternity and menopause discrimination and sexual harassment.

9.      Enforcing Equal Pay and Pay Gap Reporting for Disability and Ethnicity

Labour has confirmed that it will introduce a landmark Race Equality Act, to enshrine in law the full right to equal pay to cover the protected characteristics of race and disability, whilst also strengthening protections against dual discrimination.

Furthermore, Labour intends to introduce mandatory pay gap reporting for ethnicity and disability for employers with more than 250 staff.

10.  Strengthening Rights Regarding Workplace Whistleblowing and Sexual Harassment

Labour states it will strengthen protection for whistleblowers, including by updating protection for women who report sexual harassment at work.

Following its commitment to create and maintain workplaces free from harassment, Labour also proposes to reintroduce third-party harassment provisions. If reintroduced, these provisions would require employers to take active steps to prevent their customers, suppliers, visitors – basically anyone – from harassing their staff on the grounds of any of the protected characteristics under the Equality Act 2010.

Excluded from Labour’s Manifesto…

Interestingly, despite it being discussed at length in the 2021 Green Paper and the leaked amended Green Paper of 2024, Labour’s Manifesto excludes reference to their plan to move towards a ‘single status of worker’. If introduced, the plan would see the current three-tier system of employee, worker and self-employed replaced by a new two-tier system of just worker and self-employed.

The effect would see the creation of a new status of ‘worker’ encompassing both employees and workers where both would benefit from all employment rights currently enjoyed by employees.

Whilst its exclusion from the Manifesto may suggest a potential abandonment of the proposal, rather ambiguously, Labour has pledged in its Manifesto to implement all of its proposals set out in the New Deal. This would, in theory, include, at the very least, some consultation on the proposed two-tier system. Nevertheless, its exclusion from the Manifesto does place a question mark as to whether Labour intends to proceed with this proposal or not.

When will these changes take effect?

Should Labour follow through on its promise to introduce an Employment Bill within the first 100 days, then we could see draft legislation as early as Autumn this year. Employers are therefore encouraged to review their policies to ensure they are prepared for any immediate change.

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If you have any questions or you would like support or further advice, please do not hesitate to contact the Employment Team below.