How would the UK employment law landscape change under a Labour Government?

Change, change, change

Should employers be shaking in their boots at the thought of wholesale change to the workplace if the Labour Party moves into Number 10? It is too early to tell. Most of the detail is still under wraps so the impact is difficult to assess. What is clear though is that the package of reforms in Labour’s Manifesto and New Deal for Working People is transformational and spans individual and collective rights, as well as creating a new infrastructure in the shape of an enforcement body for workers’ rights. 

To help you navigate through the raft of changes, we have produced tables on some of the key proposals with our initial thoughts on their impact for employers, relating to:

• more secure work and basic employment rights
• family-friendly rights and equality
• collective and trade union rights

Give with one hand and take with the other

Even without the detail, we can say that a number of the headline issues generated by Labour’s 2022 Green Paper have been watered down or have gone altogether. Designating an unfair dismissal claim as a day one right remains but woven into the narrative is the ability for employers to operate probationary periods to assess new hires. Employers have always been able to do this, but it serves as a nod to reassure businesses that fair dismissals can still take place.

The promise to remove the cap on unfair dismissal compensation has also not materialised. The right to switch off would be introduced along the lines of the models used in Ireland and Belgium, which means the right would not be absolute.  The practice of “fire and rehire” would not be outlawed but there would be stricter conditions to use it and effective remedies against abuse.

Swiss cheese and bad bosses

The reaction from one of the unions, Unite, was to say that the New Deal has more holes in it than Swiss cheese, and was in danger of becoming a bad bosses’ charter. It is certainly fair to say that, throughout the new proposals, there are new or enhanced rights which are employee-friendly at first glance, but that carve-outs or caveats bring a kind of even-handedness to the reform package. So, employers need not be overly alarmed. 

Busy year ahead

This does not mean that employers can sit back and relax. These changes would be high maintenance, requiring new thinking and new policies, practices and arrangements. They would undoubtedly cost time and money and, in some areas, increase litigation risk. And they would come quickly. Labour have promised to hit the ground running, and to introduce legislation in Parliament within 100 days of entering government. However, they have committed to consult fully before changes are made, and hopefully there will be transitional arrangements built into the timetable, leaving adequate time to prepare for the new employment landscape.