Employment law – What will the impact of a Labour government be?

Ranjit Dhindsa, Head of Employment at law firm Fieldfisher, comments on the major changes in employment law that the new Labour Government could introduce.

“Ahead of the General Election, the Labour Party laid out a ‘new deal’ for workers under its ‘Make Work Pay’ plan. At the heart of the plan is a prioritisation of focus on workers’ rights in relation to pay, security, inequality and discrimination. 

A new Employment Bill is expected within 100 days of the Election, including a number of radical changes to existing employment law. Organisations of all sizes will be affected and employers need to start planning ahead.

 
 

On pay, the national minimum wage is set for reform, with a proposal to remove the current age bands for adult workers. The national minimum wage has increased each year and it will be interesting to see how those sectors of the economy that are struggling will cope with the removal of different rates of pay.

In the area of job security and much debated zero hours contracts, the Labour Party wants to create a single status of worker, removing the confusion between an ‘employee’ and a ‘worker’. Interestingly, zero hours contracts are unlikely to be banned entirely but employers must offer regular hours after 12 weeks.

Labour has also put a focus on strengthening Equality Law. On 26th October this year, a new obligation on employers to prevent sexual harassment in the workplace is coming into force. Labour has proposed strengthening the obligation further by requiring employers to take ‘all’ reasonable steps to prevent sexual harassment, including the obligation to prevent harassment by third parties, and explicitly stating that complaining about sexual harassment is whistleblowing.  

 
 

There is also an indication that dual discrimination will be introduced, which could create up to 20 new dual protective characteristics.  For example, someone who is older and female could bring a discrimination claim based on this combined characteristic.  

At the moment, Equal Pay claims can only be brought on the basis of gender.  In its election manifesto, the Labour Party proposed that this right be extended so that different ethnic groups and the disabled can also bring equal pay claims.  

Whilst employers with more than 250 employees already have to report on gender pay gaps, the Labour Party would like to introduce similar obligations for pay gap reporting in relation to ethnicity and disability, and introduce menopause action plans.

 
 

Work-life balance is another area of focus, with Labour looking to make flexible working a default right from day one.  Following a trend set by some European countries, Labour is also looking to introduce the right to disconnect outside of normal working hours.

Labour wants to introduce the right to raise collective grievances and make unfair dismissal a day one right.  The number of disputes may increase as a result and it is unclear what the impact on probationary periods will be.

The Labour Party is looking to simplify the law relating to collective redundancies.  Currently, employers can count different establishments separately, which can avoid the obligation to collectively consult.  The Labour Party plans to introduce collective consultation where 20 or more employees are affected across the business.  This would cover redundancies over multi sites and different groups of employees. Employees will also have six months to bring claims rather than the normal three months.  

 
 

In summary, Labour’s proposals will see increased employment rights, job security and flexibility for individuals, and it will be easier for employees to seek redress from their employers.   

Employers will need to ensure legal compliance and consider how to deal with employees who will want to enforce their rights. Dispute resolution strategies may be needed. 

To date, Labour has made no reference in this area to EU directives, such as the Pay Transparency Directive or the EU directive on whistleblowing.  It will be interesting to see if the Labour Party will move closer to shadowing EU laws and regulations now it is in power.”

 
 

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