What does Labour have in store for employment law in the UK if it is elected?

It has outlined an ambitious set of proposed reforms to employment law which could be implemented, dependent on the result of the potential general election in July. These reforms aim to address various issues faced by workers in today’s economy and they offer significant changes that impact both employees and employers.

Labour’s proposals include furthering employees’ day 1 rights, including the right to not be unfairly dismissed, (currently two years’ service is required to be able to bring a claim) although probationary periods will still apply, and also the right to statutory sick pay (SSP). Currently, employees have to wait 3 days before receiving SSP, but the reform sets to allow SSP from day one to all employees including anyone who is self-employed.

The reforms also includes introducing a right to switch off. This means workers will have the right to disconnect from work and not be contacted by their employer outside of their working hours. However, many are unsure on how this would work in practice.

Labour also proposes to extend the limitation periods on bringing a claim to the Tribunal to six months,  as they believe 3 months is not long enough. Although this expects to deliver a fairer deal to employees, this  impact not only businesses but the Tribunal system could be significant, causing  potentially increased congestion.

One of the stated primary goals of Labour’s reforms is to enhance job security for workers. The proposed ban on zero-hour contracts is intended to ensure that all workers have predictable and stable hours. For employees, this means greater financial stability and the ability to plan their lives more effectively. Reclassifying gig economy workers as employees rather than independent contractors would extend benefits such as sick pay, holiday pay, and minimum wage protections, thereby improving their overall job security and quality of life.

For employers, especially those who rely on flexible work arrangements, these changes could present challenges. Banning zero-hour contracts and reclassifying gig workers may lead to increased labour costs and administrative burdens. Employers might need to adjust their business models to accommodate more stable, long-term employment arrangements. While this could lead to higher operational costs, it might also result in a more motivated and loyal workforce.

Addressing pay inequities is another key aspect of Labour’s reforms. Extending mandatory pay gap reporting to cover ethnicity and disability, in addition to gender, aims to promote transparency and accountability. For employees, this could mean a fairer workplace where pay disparities are identified and addressed. Stricter enforcement of equal pay laws would help ensure that all workers are compensated fairly, regardless of their background. Labour argues that promoting pay equity can enhance the company’s reputation and attract a diverse talent pool. It says that it leads to a more inclusive and satisfied workforce, which can positively impact overall performance.

For employers, the increased requirement to report pay gaps and ensure compliance with equal pay laws could involve additional administrative work and potential costs.

The Labour Party’s proposed reforms to employment law will bring about some sweeping changes in this field. Whilst these changes promise significant benefits for workers, they also pose some challenges for employers  in terms of potential increased costs and administrative burden.