The Labour party made a long list of pledges around employment rights in its manifesto. Now it is in government, is it realistic to expect those changes to take effect soon? And what does this mean for employers while laws are drafted and passed? Beverley Sunderland considers some of the issues.
Before it secured its landslide victory in last week’s general election, Labour clearly set out in its manifesto a sweeping plan to update employment law.
And in an interview with Laura Kuenssberg on Sunday 7 July, Labour cabinet minister Jonathan Reynolds confirmed the new government was “getting started on the process” within the first 100 days.
However, whichever you look at it, Labour has set itself a huge challenge in what is a complex area of the law.
To recap, its biggest proposals are:
- Outlawing zero-hours contracts
- A ‘reform’ of ‘fire and rehire’ but not an outright ban (although Jonathan Reynolds did use the word ‘ban’ on Sunday…)
- Day one rights for unfair dismissal (subject to a probation period), sick pay and parental leave
- Consultation on worker status
- Reform of collective consultation to count all employees across every location
- Strengthening rights in TUPE
- Strengthening protection for whistleblowers
- Ensuring flexible working is a genuine default
- Consulting on whether carer’s leave should be paid
- Enhancing redundancy protections relating to maternity
- Right to switch off
- Removing the lower earnings limit for Statutory Sick Pay (SSP)
- Repealing curbs on unions
- Ensuring outsourced workers are included in gender pay gap reporting
- Menopause action plans for employers with more than 250 staff
This is a long shopping list, and anyone expecting these to be on the statute book in 100 days is likely to be very disappointed.
Complex reforms
There is the starting point of who exactly will do the drafting – this is a hugely complex area of the law and as the Conservatives discovered when trying to impose third-party liability for harassment, absolutely rife with difficulties.
Labour government
Labour ministers begin work on employment issues
Labour government sets out to deliver bold employment agenda
It is also quite easy to make sweeping promises when some of those making them may not have had any exposure to the actual challenges facing businesses. Should reform all be one way? Should a government perhaps be relieving pressure from employers in relation to matters such as tactical subject access requests by aggrieved employees?
The danger is that at the same time as promising to cut red tape, Labour potentially risks wrapping employers up so tightly in employment legislation that they cannot actually go about growing the economy.
And then there is the practical problem of how law is made or changed. The reality is that introduction of, or changes to, both primary legislation (acts of Parliament) and secondary legislation (regulations) take time.
Primary legislation must be debated by the House of Commons, and pass through the House of Lords. Even if Labour makes the changes through secondary legislation, this will have to be consulted on.
State of flux
The devil is in the detail and one word out of place in legislation and employers will be in a state of flux for years as the cases escalate up to the Supreme Court for a definitive answer.
At least we no longer have to factor in decisions handed down by the Court of Justice of the European Union, but when tribunal cases are taking over a year to get to the first hearing, it is not realistic to think that definitive answers will be coming any time soon.
After all, it only took from April 2012 (Lock v British Gas) to October 2023 (Chief Constable of Police Service of Northern Ireland v Agnew) for there to be some element of certainty in relation to how the wording in the Employment Rights Act should be interpreted when it came to what a worker was paid when on holiday and how far back claims could be made.
There is also the problem of what employers do in the meantime and will we see unintended consequences. If the law is changed to include day one employment rights (subject to a probationary period) then there is the very real possibility that all those employees currently under two years’ service, where the employer is undecided about them, will be dismissed before any new laws come in.
Those companies currently able to flex their workforce to meet demand using zero-hours workers may look at a completely different business model – automation, AI, outsourcing abroad? Or just shutting down completely.
Following the process
We do not yet have the details of exactly what the new day one unfair dismissal protection will look like, it does at least seem that an employer will be permitted a probationary period to decide.
Perhaps this is no bad thing, it will help employers to focus their minds on the probation period and put in place a proper process for deciding if the employee is right for the organisation.
The devil is in the detail and one word out of place in legislation and employers will be in a state of flux for years.”
But can there be a one-size-fits-all in terms of the length of a probationary period?
It does however seem that once an employee has passed their probation then employers will still be able to dismiss for the same fair reasons: conduct, capability, redundancy, illegality and some other substantial reason.
This is of course provided they follow a fair process – a series of warnings for capability or conduct (other than gross misconduct), and consultation in redundancy.
Although some businesses may cynically regard HR professionals as a cost, the next few years will highlight once and for all the importance of HR expertise and the consequences of not taking proper advice.
A silver lining perhaps – or just another 30 items for HR’s ‘to-do’ list.
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