UK General Election: What changes does Labour have in store for employers?

05 July 2024

Out of all of the parties rallying to be the new UK Government, Labour proposes significant changes to employment legislation.

Labour promises to implement some changes within 100 days of being in power, many of which will impact UK employers.

ZEDRA London’s HR Assistant Manager, Amie Crowther-Bali outlines some of the headlines below.

Unfair dismissal rights

The new UK Government intends to introduce unfair dismissal rights from day one of employment. As this is one of the largest amendments proposed by Labour to employment rights, it is likely to take longer than 100 days to be implemented,

Under the previous rules, unfair dismissal rights kick in after two years of service, but this change would mean that a fair reason will be required to dismiss an employee in the UK from their first day in employment. Employers will be required to follow a fair process to carry out the dismissal from the start date.

This will mean a complete policy and process overhaul to adhere to the revised unfair dismissal rights rules. It will also be a stark reminder for employers to really use probationary periods to assess the candidate’s suitability for the position which could perhaps mean a probationary period management review with the potential to extend probationary periods to a minimum period of six months to give more flexibility to employers.

Firing and rehiring

Where an agreement cannot be reached concerning the change of terms and conditions of employment (usually where they are less favourable), the process of ‘firing and rehiring’ is often used to dismiss employment on the previous terms and then engage on new terms and conditions.

There are many risks associated with this approach and it isn’t generally recommended. Risks could include a breach of contract, unfair dismissal, wrongful dismissal and discrimination.

Labour has announced as part of its manifesto that it will seek to ban the use of the firing and hiring procedures where employers abuse this process.

Worker status

Under the existing regime, the UK has three employment status classifications; employees, workers and the self-employed.

Labour plans to engage in consultations to move towards a single status of worker within the first year in power, which would see employees and workers being grouped together into one single classification.

Employers will need to reclassify workers to employees, giving workers additional rights including benefits, redundancy and unfair dismissal.

Zero-hour contracts

As part of Labour’s ‘New Deal for Working People’, the Government is expected to seek to ban “exploitative” zero-hour contracts in a bid to end what Labour describe as ‘one-sided flexibility’ to ensure  a certain level of security including predictable working arrangements.

This change would likely result in an additional administrative burden on employers who will be required to review zero-hour contracts and potentially offer workers a permanent contract following 12 weeks of regular work and hours.

Ease of raising collective grievances with ACAS

In an effort to combat issues within the workplace that may be impacting more than one employee, Labour plans to simplify the process of raising a collective grievance with the UK’s Advisory, Conciliation and Arbitration Service (ACAS).

Increasing the time limit to raise a claim against an employer

Currently, an employee can bring a claim to the employment tribunal in three months, minus one day from the date of the problem occurring at work.

Labour will look to increase this to six months which will provide more consistency with the time limit to claim for statutory redundancy and equal pay. This could be implemented to allow for more time to complete internal procedures more efficiently, in turn, reducing the number of claims – again, this would encourage employers to ensure that their policies are fair, consistent with UK legislation and up to date.

Strengthen collective bargaining and trade unions

Labour has announced plans to strengthen trade unions and collective bargaining in a bid to keep people in work for longer and to remove restrictions on trade union involvement to ensure that issues are tackled such as discrimination, pay rights and equality.

How ZEDRA can help

All of the above changes were announced prior to the UK General Election taking place. Time will tell whether they are successfully implemented, and what other measures may be announced in the coming months.

We know that 2024 has already seen a lot of change in UK legislation and the election of a Labour Government will certainly bring more.

Our team of experts will be keeping a close eye on changes being implemented, and we are ready and available to advise you on what the impact will be for your organisation. For more information, contact Amie Crowther-Bali.

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