Now that Sir Keir Starmer and Labour have the keys to government, the first time that Labour has been in this position since 2010, it’s clear that employment law is to change radically.
Any discussion ought to start with A New Deal for Working People, published by Labour in May. This document outlines various reforms and pledges.
Albeit in a list-like form, the document proposes many changes, including new protections from unfair dismissal, sick pay and parental leave as day-one rights; the banning of zero-hour contracts; contracts that reflect the number of hours actually worked based on a 12-week reference period; the banning of “fire and rehire” practices; amending collective redundancy consultation thresholds based on the number of people impacted across the employer’s whole business; and the merging of employee and worker status.
However, Labour also wants to reform many other areas of employment law, too. It’s proposing to strengthen the rights and protections for whistleblowers and those who transfer from one business to another under TUPE; protect interns and volunteers from sexual harassment; introduce the right to switch off and work autonomously; strengthen the rights and protections for workers and the self-employed; bring in rules for new employees to inform them of their right to join a trade union; change statutory maternity and paternity leave; introduce “Fair Pay Agreements” negotiated through sectoral collective bargaining; bring in mandatory ethnicity and disability pay reporting for larger employers (those with more than 250 staff); introduce a menopause action plan for larger employers; change health and safety law and enforcement; and increase the timeframe for filing claims with Employment Tribunals from three months to six months.
That’s quite a list, and consequently, not everything has made the two employment law bills announced during the King’s Speech in mid-July.
But regardless of when the changes listed above are introduced, they will have a significant impact on employers – even if only some of them become statutes.
Consider the right to protection from unfair dismissal. Presently, employees need to have two years of service before they can bring a claim for unfair dismissal. If that were made a day one right, the whole landscape would be changed overnight, with employers far more exposed to Employment Tribunal claims.
Employers will have to be more circumspect in how they dismiss and ensure that they have followed fair procedures. Notably, the unfair dismissal right has never been a day-one right; it previously had a one-year service period until April 2012, when it was changed to two years.
Similarly, if the definitions of worker and employee are merged, the pool of individuals who can claim unfair dismissal will be greatly enhanced; at present, this right applies only to employees, not workers. The same risk applies if the timeframe within which employees can bring tribunal claims is doubled – more will have the option to bring claims.
But back to the employment status framework, currently there are three categories of employment status: employee, worker, and self-employed. It’s important to understand that they differ in the way that employment protections work and the obligations they place on employers. Beyond unfair dismissal protection, only employees benefit from statutory minimum notice periods and redundancy payments. Likewise, many statutory family-related and time-off entitlements only apply to employees. If the definitions of employee and worker are merged, many of these workplace rights could then apply to many more people within an employer’s workforce.
As a result, if the rules change as expected, employers will likely spend more time and financial resources responding to claims.
The saving grace is that Labour has mentioned making the rules applicable after the end of a probationary period. Unsurprisingly, employers will no doubt look to lengthen the time probationary periods run for.
Only time will tell how this all plays out, but one thing is certain, employers are going to have a tougher time of it.