The Stirring Debate Over Labour’s proposed Suite of Workers' Rights Reforms

The Stirring Debate Over Labour’s proposed Suite of Workers’ Rights Reforms

“We are not going to be content with just the soup and the pudding, we want the full three course meal.” said John Hendy KC sharing his views in the wake of current discussions around Labour’s green paper, A New Deal for Working People.  The green paper was originally published in October 2022 and recently publicised on Labour’s website.

Labour’s new deal proposes a ban on zero hours contracts, an end to fire and rehire, and stronger flexible working rights among other drastic shifts to the Employment landscape. In autumn 2023, Labour promised to bring these changes through an employment bill in its first 100 days, if elected.

In contrast to John Hendry KC’s words of support for Labour’s ambitious promise, it appears that business leaders have a differing view on these proposals and are lobbying the current Labour leadership to water these down.  Alex Hall-Chen, of the Institute of Directors, told the Times: “The concern we have is that if Labour went ahead with the ”full fat” version of some of these proposals they will impose very significant costs on businesses at a time when many companies are struggling with a difficult trading environment”.  Similar fears have been disclosed by other business leaders that such changes may risk British businesses becoming uncompetitive internationally.

 A fuller picture of Labour’s proposed reforms to employment law is set out below:

  • Raising the national minimum wage to cover the cost of living, paying travel time in sectors with multiple working sites, banning unpaid internships, raising the rate of statutory sick pay and making it available to all.
  • Strengthening collective bargaining, including establishing “fair pay agreements”.
  • Creating a single “worker” status (rather than the current distinction between “worker” and “employee”), with the same basic rights to sick pay, holiday pay, parental leave and unfair dismissal protection.  This would mean a great many individuals who do not currently have unfair dismissal rights, gaining that protection. 
  • Removing qualifying periods for these rights, including unfair dismissal.  Unfair dismissal rights would, however, be subject to “contractual probationary periods”.  This gives rise to a number of questions including how long a probationary period an employer would be entitled to use.
  • Extending statutory maternity and paternity leave, reviewing shared parental leave, introducing bereavement leave.
  • Making it unlawful, except in specific circumstances, to dismiss a woman in the six month period after returning to work following pregnancy.
  • Banning zero hours contracts and “fire and rehire” practices
  • Introducing a new right to “switch off” from digital devices, and to protect workers from remote surveillance.
  • Repealing the Trade Union Act 2016, simplifying the recognition process, allowing electronic balloting and establishing a single enforcement body.
  • Extending the time limit for bringing employment tribunal claims, removing statutory compensation caps and introducing personal liability for company directors if tribunal awards are unpaid by the company.
  • Requiring employers to maintain workplaces that are free from harassment, including by third parties, and making ethnicity pay gap reporting mandatory for employers with more than 250 staff.

Local election results earlier this month have further increased expectations that the Labour Party will return to power after 14 years, in a general election that will take place in the coming months. It remains to be seen, if Labour does return to power, whether these proposals will be implemented in full, or whether business leaders will succeed in their push for watered down reforms. Nonetheless, it is difficult to overstate how far-reaching some of these changes would be.  The changes would have a radical impact on Employment law and would require employers to significantly overhaul their policies and procedures to take account of these legislative shifts.

If you have any questions on this topic, please contact a member of BTO’s Employment Law Team.

This update contains general information only and should not be construed as providing legal or other professional advice.

Laura Salmond, Partner & Accredited Specialist in Employment Law: / 0141 225 5315 Connect with Laura on LinkedIn

Kimberley Tochel, Trainee Solicitor: / 0141 221 8012 / Connect with Kimberley on LinkedIn