Labour Party Employment Law Proposals – Promises of further consultations and a softer approach

Recent leaks appear to suggest that the Labour Party’s proposed ‘New Deal for Working People’ will be somewhat diluted and/or delayed, when compared to the original proposals.

The Party is finalising it proposed employment reforms in order to brief its members to prepare for the upcoming election. It has briefed union officials and will balance their interests with those of business groups before arriving at a final policy position.

In 2021 the Party made promises to introduce a wide range of policies under the ‘New Deal’ umbrella within the first 100 days of taking office, which included a ban on zero-hours contracts, a ‘right to switch off’, a day-one right to protection from unfair dismissal for all employees, protection for union representation and fundamental changes to the structure of employment status in the UK.

The Labour Party and unions have already publicly stated that the consolidation of the current employment status system into either the genuinely self-employed and a single ‘worker’ status will take time to implement, starting with a detailed consultation. The leaks appear to suggest that similar consultations will take place for the New Deal as a whole, not just the employment status question, which will give employers more time to prepare and may soften the impact of the changes.

The protection from unfair dismissal appears likely to be made contingent on a worker’s contractual probation period, which itself must be implemented fairly and transparently. This would provide security and flexibility for Employers to assess new hires but is still a significant departure from the current position, where the protection from standard unfair dismissal only kicks in after two years of continuous employment.

The ban on zero-hours contracts has also changed form. The Labour Party appears to be suggesting that, rather than a full ban as proposed in 2021, workers will have a right to switch to a contract that more accurately reflects the hours that they regularly work, as assessed over a twelve-week period. Workers would also have the right to reasonable notice for any change in shifts or working time, and compensation for shifts that are cancelled or curtailed. This concept of compensation is yet to be clarified and will be of interest to employers and employees alike.

The ‘right to switch off’ may also be less forceful than it initially appears, and similar to the current position in Ireland and Belgium. It is expected that staff will have the right to constructive conversations on the topic with management to develop approaches that work for the business, rather than a blanket right such as that in Germany.

However, it is expected that the Labour Party will commit to repealing laws implemented by the current government restricting the right to strike and will ban the practice of “fire and rehire”, both of which will be on a shorter timeframe than the more significant changes.

We expect more developments in this policy area as the Labour Party take on the views of unions and business groups, ahead of a final manifesto announcement.

If you need any advice on any of these areas of employment law, please contact our employment lawyers.