What employment law changes could there be under a new government in 2024?

As we gaze into the near future, the prospect of a forthcoming General Election looms large on the horizon with 2024 primed to be the pivotal year when the UK once again heads to the polls.

However, with recent surveys suggesting a change in UK Voting Intention, are we on the verge of a new government emerging, bringing forth a fresh wave of transformative changes in employment legislation?

This blog investigates what law changes could be delivered under a Labour government, following recent commitments aired at the Trade Union Congress (TUC) conference.

A ‘New Deal for Working People’

Before we continue, we must of course address the premises that this blog hinges upon; firstly, that a new General Election will be called for in 2024, and secondly that the election will be won by the Labour Party, which is the current expectation of many pollsters.

Regardless of the result, it will be a very different United Kingdom that will be under the spotlight at the next election from that which voted in 2019. Not only is there a new Prime Minister (from Boris Johnson to Rishi Sunak via Liz Truss), there is a new monarch on the throne AND the UK is no longer a member state of the European Union (Brexit took place on 31 January 2020).

Therefore, change is inevitable.

It also seems as though one of the main battlefronts for the election will be an assault on employment law with Labour planning radical changes to the UK employees’ rights on a greater scale than seen in many years.

Their plans for reforms to employment law were confirmed at the TUC conference which provided the most comprehensive articulation yet of the “cast iron commitment” that Angela Raynor, Labour’s deputy leader, promised earlier this year.

This commitment was to implement an Employment Bill within the first 100 days of entering office which builds upon Labour’s “New Deal for Working People”, released last year. However, this wasn’t the only bill Raynor committed to delivering in this first window as there were a range of eye-catching proposals discussed at the conference.

Focus on Trade Union reforms

Perhaps unsurprisingly, reforms to how Trade Unions are allowed to operate were particularly highlighted with a clear message that a Labour Government would ask Parliament to repeal a number of ‘anti-trade union’ laws.

In an interview with the TUC, Angela Raynor confirmed: “Within 100 days we’ll repeal both the Trade Union Act 2016 and the Strikes (Minimum Service Levels) Act 2023.” This action should please their historic supporters in the unions and also potential deliver more rights for employees who want to protest against their employers.

As part of their agenda, Labour is particularly keen on implementing a key policy that centers around granting workers the authority to engage in sectoral collective bargaining to negotiate fair pay agreements. This approach aims to bolster workers' ability to unite through trade unions and, importantly, remove regulations that hinder their capacity to go on strike.

This has long been a demand championed by labor unions, offering a channel for workers to express their opinions in collaboration with others. The recent strike actions underscore the enduring influence of trade unions within workplaces, emphasising the need for employers to take them seriously and engage in constructive interactions with all forms of employee representation.

While many agree that these changes will provide immediate financial benefits to workers, concerns have arisen about potential job cuts and business closures. This may explain why the latest policy documents have included a caveat, specifying that the new sector-wide collective bargaining agreements will not encompass "many parts of our economy” – potentially a compromise to retain Labour’s stance as a party of the businesses and the unions.

Although there is a possibility of a less stringent approach compared to the party's initial position, when considered as a whole, it implies that Starmer's government aims to strengthen union influence, enabling workers to collectively secure equitable pay, improved terms, and fair conditions, while also taking a tougher stance against unscrupulous employers who exploit their workforce.

Other core employment law proposals on the table

While restoring power to the Trade Unions was most prevalent in the proposals aired at the TUC conference, there were a number of other employment law changes announced that could have wide-ranging implications for employers and employees alike:

Major changes to unfair dismissal protection

Labour has put forward a proposal to extend protection against unfair dismissal and eliminate the cap on compensation awarded to successful tribunal claimants. Currently, employees typically have the right to challenge a dismissal only after completing two years of service with their employer.

This policy shift, if implemented, would grant employees protection from day one of their employment and would prohibit the controversial 'fire and re-hire' practices, which involve altering employment terms through dismissal and re-engagement.

The collective impact of removing the qualifying period and the compensation cap is likely to make dismissals more intricate and potentially costlier, along with an anticipated rise in the number of claims submitted to employment tribunals. This could have a major impact on employers’ approach to recruitment, management, and dismissal in order to adapt to these changes.

A proposed ban on zero-hours contracts

One of the biggest changes noted in Labour’s plans would be a ban on controversial 'zero-hours contracts' and ensuring anyone working regular hours for 12 weeks or more has the right to a regular contract.

This comes after it was revealed that zero-hours contracts hit a record high in the final quarter of 2022.

However, this proposed is debated by some – including those who are employed on zero-hours contracts. Many workers on this type of contract report better work-life balances than other workers and when used responsibly, this employment type can offer genuine two-way flexibility.

Balance work and home life, including the right to disconnect, flexible working and caring responsibilities

Labour intends to introduce a novel entitlement for workers, allowing them the freedom to disconnect from work outside their designated working hours and ensuring that employers refrain from making contact during these periods. In the UK, there exist some legal obligations pertaining to such support; however, their effectiveness and awareness remain limited.

Furthermore, they have committed to granting all workers the right to flexible working from day one, with a stipulation that employers must reasonably accommodate this request. Interestingly, this facet of their proposals may not necessitate any legislative changes, as the Employment Relations (Flexible Working) Bill recently secured Royal Assent and could potentially bestow many of the same rights.

In addition, they’ve planned further assistance for individuals who have caring responsibilities for relatives outside of their main source of employment. This is also currently overlapped in some policies raised in the recent Carer’s Leave Act.

Change rules around sick pay

Labour plan to improve statutory sick pay entitlements to ensure that workers do not “have to choose between their health and financial hardship”. They plan to make it available to all workers, including the lowest earners, from day one of employment.

Part of the reasoning behind this was for the UK to ‘catch-up’ with the rest of the 38 members of the Organisation for Economic Co-Operation and Development (OECD) as Labour Party deputy leader Raynor, explained to TUC: “The UK has the lowest level of statutory sick pay in the OECD. The next Labour government will strengthen and increase statutory sick pay, make it available all workers by removing the lower earnings limit which cuts out those on low wages, and removing the waiting period which currently means workers can only access it from day four of sickness.”

The speech also alluded to supplementary actions, such as introducing a “proper living wage that people can actually live on”, expediting the elimination of the gender pay gap, rectifying wage disparities, combatting workplace sexual harassment, and elevating the importance of mental health to the same level as physical health.

So, will these changes actually happen and what do I need to do?

Leading up to the speech, the media had raised concerns about potential ‘dilution’ of key commitments related to worker rights.

In July, the Labour Party's policy forum had reached a consensus to explore the idea of establishing a single "worker" status and had also made revisions to the concept of "day one" rights (including protection from unfair dismissal) by clarifying that this wouldn't preclude the existence of "probationary periods with fair and transparent regulations."

Nonetheless, if these Labour-proposed reforms were to be enacted, they would signify the most significant overhaul of UK employment law in many decades.

With this in mind it would be prudent for employers to consider how some, if not all, of these new proposed policies would affect their plans as the potential implications for an organisation could be considerable.

In particular, businesses may need to quickly adapt to ‘first day rights’ for new starters and ensure their recruitment policies are up-to-date as poor hiring processes could have increased costs following the approval of plans around unfair dismissal.

If you’re in doubt as to how to produce water-tight human resource policies for your business, you can always get our expert team at dolen to take a look and advise you on how to safeguard your operations moving forward.