General Election 2024: Labour proposals for employment reform

Following the surprise calling of a General Election by the Prime Minister on 22 May, the Labour Party has issued an updated version of its ‘New Deal’ green paper, which was last published in January 2024 (see our previous article for more details of the earlier publication). 

Now titled “Labour’s Plan to Make Work Pay” this latest version of the publication sets out in detail the proposed reforms that would be introduced in the event a Labour government takes power on 5 July 2024. Some have criticised the proposals as a ‘watering down’ of Labour’s previous commitments to workplace rights, but they represent a significant number of major changes for employers to grapple with under a future Labour government. 

The finer details of how these changes will actually work in practice will depend on the outcome of future consultation exercises, and it is highly likely that any eventual legislative changes will differ at least to some extent from the ambitious proposals set out in the green paper.    

Key proposed changes for employers to note are as follows: 

• Day one rights: providing “basic individual rights” from day one of employment for all workers, including rights to claim unfair dismissal, subject to the ability for employers to operate fair and transparent probationary periods. 
• Flexible working: making flexible working the default from day one for all workers, unless it is “not reasonably feasible”. This suggests a strengthening of the current right to request flexible working from the first day of employment, which took effect from 6 April 2024. 
• Fire and rehire: ending the practice of ‘dismissal and re-engagement’ as a lawful means of changing an employee’s contractual terms and conditions. This will include replacing the new “inadequate” statutory Code of practice (due to take effect on 18 July) with a strengthened one, providing effective remedies against abuse. 
• Diversity, equity and inclusion: introducing statutory protections for trade union equalities representatives. Increasing measures designed to achieve equal pay, plus introducing mandatory ethnicity and disability pay gap reporting for large firms. Employers will be required to create and maintain workplaces and working conditions free from harassment, including by third parties. Large employers will be required to produce menopause action plans, setting out how they will support employees through the menopause, and it will bring into force the socio-economic duty for certain public bodies (section 1 Equality Act 2020). 
• Employment status: moving towards a single status of ‘worker’ and a simpler two-part framework for employment status, by consulting on combining the existing ‘employee’ and ‘worker’ statuses. 
• Employment tribunals: increasing the time limit for an individual to bring a tribunal claim from three to six months. 
• Zero-hours contracts: banning “exploitative” zero hours contracts and giving workers the right to a stable contract, reflecting the hours they regularly work based on a 12-week reference period. Workers will also have the right to be given “reasonable notice” of any change in shifts or working time. 
• Family leave: parental leave will become a day one right and the current system of parental leave reviewed within the first year of a Labour government. It will be unlawful to dismiss a woman during pregnancy or within six months of her return to work, except in specified circumstances. The introduction of paid leave for carers will be considered, and entitlement to bereavement leave extended to all workers. 
• Health and safety: a review of current health and safety guidance and regulations with a view to modernisation. Working with employers, trade unions and other stakeholders to support the wellbeing of workers and their long term physical and mental health. 
• Redundancy: strengthening existing redundancy rights and protections, including the right to collective redundancy consultation determined by the number of people impacted across the business, rather than in one workplace. 

• Right to disconnect: providing workers with a new right to disconnect from work outside of working hours and not be contacted by their employer. Proposals by employers to introduce new surveillance technologies will be subject to an obligation to consult with the workforce. 
• Single enforcement body: a single enforcement body (SEB) will be established to enforce workers’ rights, including strong powers to inspect workplaces and take action against exploitation. This will include health and safety and national minimum wage enforcement. 
• Sick pay: statutory sick pay (SSP) will be strengthened, with the removal of the current lower earnings limit to make SSP available to all workers, as well as removing the current three-day waiting period. 
• Trade unions: significant changes to existing legislation are proposed, including the repeal of the Trade Union Act 2016, which placed restrictions on the organisation of lawful industrial action, and repealing the Strikes (Minimum Service Levels) Act 2023, which introduced powers to set minimum service levels in certain key public services. Trade unions will also be given access to electronic balloting, and the statutory recognition procedure will be strengthened.  
• TUPE: the existing TUPE rights and protections for workers will be strengthened. Labour also proposes to end the presumption in favour of public sector outsourcing and the oversee the “biggest wave of insourcing of public services for a generation”. 
• Wages: ensuring the national minimum wage (NMW) is a “real living wage”, taking into account the cost of living and removing the current age bands to ensure that every adult worker benefits from the NMW. Unpaid internships will be banned, other than as part of an education or training course, and the rules on sharing of tips will be (further) strengthened.  

The Birketts view 

Note that Labour has previously committed to introducing a new Employment Rights Bill within 100 days of entering office, but this does not mean that any of the proposed changes will take effect within that period. Any new legislation will still be subject to the usual consultation process, so it is likely that we will only see the publication of new consultation papers within that period. In addition, some of the proposed changes will be more straightforward to implement than others and a new government is likely to look for some ‘easy wins’ in the first few months of taking power. Other proposals, perhaps most notably the proposals relating to employment status, have already been the subject of previous consultations and will be much more difficult to implement in practice.