All Change? Labour’s New Deal for Working People, the clock is already ticking

Labour has promised a radical shake up, when it comes to employment law, and committed to an ambitious timetable to introduce its legislation into Parliament.

One of the first actions that Labour will be taking, now they are in Government, is to launch consultation on their employment law changes, albeit this will be consultation on ‘how to’ not ‘whether to’ because the commitment that they will be making certain changes has already been made. However, there will be a lot to learn from the consultation on the ‘how to’ because a number of the manifesto promises – even as set out in their more detailed ‘New Deal for Working People’ - are quite ‘high level’.

The new Government will need to start consultation as a priority because they have committed to introducing legislation into Parliament on many of their employment promises within their first 100 days.

As would be expected from a Labour Government, the changes to be introduced will see an increase in employee and worker rights and a consequential tightening on the latitude available to employers to manage their staff. Labour see their ‘New Deal’ ideas as contributing to productivity and growth through increasing incomes, so that people have more to spend and encouraging people to move jobs.

For this piece, we have picked out some of the key Labour commitments across a range of areas where change is going to happen.

Working time

Flexible working will become the default position unless it is not reasonably feasible. The switch to flexible working, as a default, means that employers will need to pro-actively determine (and likely clearly advertise/publicise) for each role in their organisation any restrictions around when and where they are performed. It is currently unclear whether the defence of it not being reasonably feasible for a role to be done flexibly will mirror the current grounds upon which a flexible working request could be rejected or is indicative of a new legal test that will be introduced.

A new ‘right to switch off’ will be introduced, but it will be for each employer and its employees to seek to agree how that will work within their organisation. So, we can expect new legislation to only establish a framework within which ‘constructive conversations’ must then happen. There is reference to learning from models in other countries such as Ireland. The Irish ‘right to disconnect’ involves a right for an employee to not have to routinely perform work outside their normal working hours, the right to not to be penalised for disconnecting and a duty to respect another person’s right to disconnect.

Ending ‘abusive’ and ‘exploitative’ practices

Zero-hour contract arrangements will be banned. Workers will instead have a right to a ‘minimum hours’ contract, which reflect their regular hours. This will be measured over a 12-week reference period, but the consultation and subsequent legislation will need to lay out whether that will be a fixed single reference period that then applies for the duration of the worker’s contract, or whether what the minimum hours have to be may change during the course of the working relationship. The consultation and legislation will also need to set out what an employer will have to do if it no longer needs that volume of hours to be worked.

Dismissal and re-engagement (or ‘fire and rehire’ as it is often known) is going to, at the least, be reformed. There are references to ending it in the manifesto and New Deal publication, but also to having a “strengthened” Code of Practice – query why a Code of Practice would be needed for something which is going to be outlawed?

Proposals to introduce surveillance technologies will need to be subject to consultation and negotiation before they can be introduced. The consultation will need to detail what falls within the definition of surveillance technology for these purposes; it could, for example, include van tracking as well as mouse tracking.

Family rights

Unpaid parental leave will become a day 1 right, removing the current 1-year service eligibility requirement. The whole parental leave system will also be reviewed between now and July 2025. There is a nod in the New Deal publication that this review may consider whether it should become a paid entitlement.

It will be unlawful to dismiss a woman who has been pregnant during the six months following her return to work, except in specific circumstances. Protection already exists for an indefinite period following a return to work where the employee suffers unfavourable treatment because of pregnancy, a pregnancy-related illness, or because of having taken maternity leave. The new legislation will flip the current position by defining the circumstances in which a returning new mother can be dismissed, rather than the circumstances in which they can’t.

The new right to Carers’ Leave will be reviewed, specifically as regards whether it should remain an unpaid entitlement or become a paid one.

Pay

Employers covered by the gender pay gap reporting obligations will also have to start reporting their ethnicity and disability pay gaps. There are known difficulties with these additional reporting areas, relating to how wide or narrow the groups within the workforce are drawn (for example for disability pay gap reporting, would it simply be the pay ratio between those who have no disability and those who have a disability?) and the need for individuals to be willing to disclose the underlying information in order for it to give as complete and accurate a picture as possible.

In what may be a sign of how ethnicity and disability pay gap reporting obligations could develop over time, the gender pay gap reporting rules will be expanded to include an obligation to ensure the data of outsourced workers is also included – legislation will need to include an obligation for the employers of those outsourced workers to provide the underlying information, even if they don’t need to collect it for their own purposes. There will also be a new requirement for employers to publish (and implement) their action plan for closing their gender pay gap.

Trade union rights

All employees will have to be informed of their right to join a trade union, at point of employment and at regular intervals throughout employment. Trade unions will also be given a right to access workplaces for the purposes of recruitment and organising. The process for recognition will also be made simpler; it will no longer be necessary to assess whether at least 50% of the bargaining unit are likely to support recognition, and any official ballot for recognition will be passed by a simple majority vote.

We have already been seeing a resurgence in union power/positioning, including recent examples of employers voluntarily recognising unions. These new rights may embolden trade unions further. However, anecdotally, we see very mixed relationships between employers and unions, and there can be a particular problem where a union is recognised to negotiate on behalf of the whole workforce but does very little to listen to the views of non-union members. With greater rights should come the recognition of the responsibility that comes with them.

Organisations who bid for public contracts should also note that whether or not they recognise a trade union and operate collective bargaining could impact upon their ability to secure new public contracts.

Complaints and disputes

Employees will be able to raise collective grievances to ACAS. Labour says that the current inability to do so means that workers may not know that others have experienced similar issues to them, meaning that bad practices can continue without being dealt with. However, those people with a shared experience will still need to be aware of each other in order to be able to bring a collective grievance to ACAS, and there is no detail about what ACAS will do with the grievances that it receives.

Protection from unfair dismissal will become a day 1 right. The New Deal publication states that employers will still be able to operate probationary periods (“with fair and transparent rules and processes”). The consultation will need to explain whether that is intended to mean that dismissals within a probationary period will be excluded from the right to claim unfair dismissal (in which case we can probably also anticipate legislative limits on the length of probationary periods) or whether the new law will specify that dismissals during a probationary period are subject to a different fairness/reasonableness test than other dismissals. We will have to wait and see whether this change in law will result in more claims. We tend to see that employees dismissed with less than 2 years’ service look for another way to complain about their dismissal, for example that it was discriminatory or because they had raised whistleblowing concerns. Even if the change does not lead to more claims, it may mean a higher proportion of successful claims. If the change does result in more claims, the already struggling Employment Tribunal system will be put under even more pressure. Labour recognises that there are growing delays in the system, but New Deal only talks about enacting things which will increase the workload of the employment tribunal system, not increase the resources dedicated to it.

Time limits to bring Employment Tribunal claims will all be set at 6 months, subject to ACAS Early Conciliation adjustments. Labour believes that this could reduce the number of claims because it will allow more time for internal procedures to be completed. However, our experience is that few internal procedures are still ongoing at point of claim submission, when one also factors in the ACAS Early Conciliation extension effect.

This article, written by Kirsty Thompson, is one of our ‘All Change’ series analysing the likely impact of Labour’s manifesto commitments, now they’re in power. Visit our All Change article hub to read all available articles.