Labour

On 24 May, the Labour party published a Plan to Make Work Pay: Delivering A New Deal for Working People (New Deal). The party’s manifesto, published on 13 June, reaffirms their commitment to implement the New Deal.

Labour’s key proposals are:

• Remove unfair dismissal qualifying periods. The right to not be unfairly dismissed is currently generally subject to a qualifying period of two-years’ continuous service. This is disapplied in some cases, for example if the reason for dismissal was that the employee blew the whistle. Labour proposes to remove this service criterion in all cases, making this a day-one right. The only exception they mention is for probationary periods: they will still be permitted but be subject to fair and transparent processes.
• Amend the threshold tests for collective redundancy consultation. The threshold for the duty to collectively consult will be assessed by looking at the business as a whole rather than one workplace. By way of reminder, the duty is triggered when an employer is “proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less”. There has been significant case law on the meaning of “establishment”, with the result being that it currently denotes the local unit or entity to which the workers are assigned. Labour would broaden this to the whole business.
• Strengthen and expand collective rights. This encompasses several proposals:
  • Repealing the Strikes (Minimum Service Levels) Act 2023;
  • Allowing electronic balloting;
  • Ensuring workers in precarious and gig economy sectors have a meaningful right to organise through trade unions;
  • Simplifying trade union recognition process (e.g. by reducing thresholds and bringing in simple majority voting);
  • Allowing union officials to meet, represent, recruit and organise members, provided they give appropriate notice and comply with reasonable requests of the employer; and
  • A duty to notify new employees of their right to join a trade union and to regularly remind existing staff of this right. The information will also need to be contained in the written statements of particulars which employers must give new employees.
• Restrict fire and rehire. This is sometimes billed as banning fire and rehire, but Labour would continue to allow it in some, limited circumstances; namely, where the business needs to restructure to remain viable, preserve its workforce and the company when there is genuinely no alternative. However, this will have to follow a proper process based on dialogue and common understanding between employers and workers.
• Create a Single Enforcement Body (SEB). The SEB would be tasked with enforcing workers’ rights. It would have powers to inspect workplaces and bring civil proceedings to uphold employment rights. The SEB would have trade union and TUC representation.
• Banning “exploitative” zero hours contracts. This appears to mean that workers on zero hours contracts will be able to force a minimum number of hours: the New Deal refers to giving a right to have a contract reflecting actual hours over a 12-week reference period.
• Protections from dismissal for returning mothers. It would be unlawful to dismiss a returning mother in the six months following return from maternity leave, subject to yet-to-be-specified exceptions.
• Equal pay in outsourcing.  Labour would put in place measures to ensure that outsourcing of services cannot be used by employers to avoid paying equal pay, including for work of equal value, to women. The New Deal does not specify how this would be achieved.
• Introduce a Race Equality Act.  This would include the introduction of race equal pay claims and strengthen dual discrimination protection.
• Gender pay gap action plans. Large firms (which is not defined) would be required to develop, publish and implement action plans to close their gender pay gaps. Outsourced workers would need to be included in their gender pay gap and pay ratio reporting too.
• Ethnicity and disability pay gap reporting. This would be required for employers with more than 250 members of staff.
• National minimum wage to be a real living wage, and age bands removed. To achieve this, Labour would change the Low Pay Commission’s remit so that, alongside median wages and economic conditions, it would take into account the cost of living. Labour also proposes to remove the age bands for the national minimum wage.
• Statutory sick pay a day-one right. Labour would also remove the lower earnings limit.
• Reviewing parental leave, and make it a day-one right. This would be subject to a review in the first year of government.
• Right to disconnect. This would follow existing models in Belgium and Ireland.
• Single status of worker. There are currently three categories of employment status for employment rights purposes: employee, worker, self-employed. There have long been proposals on moving to a binary classification of just employee and self-employed (as exists for tax law purposes). Labour proposes to consult again on moving to such a model.
• Six-month time limit for all employment tribunal claims.
• Legislating on proposals within 100 days. Labour commits to legislating within 100 days of taking office. However, they also commit to consulting fully with businesses, workers, and civil society on how to put their plans into practice before legislation is passed.