Zero-Hours Contracts
Labour has long argued that zero-hours contracts allow employers to exploit workers and employees.
They are planning to replace the current law with fixed hours across a twelve-week reference period.
This would provide more certainty for employees that they will be offered work and roughly how many hours that will be. The hospitality and retail sectors will likely be most affected.
Our View: Whilst this might seem extreme at first glance, we do not believe Labour will null and void all irregular hours contracts as this would disadvantage some people. We think any new law will allow these types of contracts by mutual consent when the employer and the employee wish to enter into them for mutual benefit.
End Ability to Fire and Re-Hire
This update will aim to outlaw the practice of compulsorily making employees redundant and immediately re-hiring them on lesser contractual terms and benefits.
This could impact any size of business but is more likely to impact medium—to large companies where the workforce is numerous, and the benefits to the employer are significant. This change would not stop the normal redundancy process when a role is no longer available, or the place of work is changing.
Our View: This was a blatant tactic used by P&O in 2022. Labour has argued for quite some time that this practice should be outlawed as soon as possible, and we would tend to agree. The practice of firing and re-hiring effectively destroys the working relationships between employers and employees and any existing goodwill.
Implement Basic Day One Rights
This change aims to abolish the current 2-year rule and would give all employees the right of Unfair Dismissal, Wrongful Dismissal and Constructive Dismissal claims from day one of their employment.
It would also change the waiting period for Maternity and Paternity leave and the 3-day waiting period before Statutory Sick Pay is paid.
Our View: It does look like this change will be implemented sooner rather than later and will affect all employers immediately. Our advice here for companies is to ensure they use all the legal tools available to avoid getting caught by any new legislation. It is essential to have robust processes in place when you recruit and onboard new employees to ensure they have the right attitude and behaviours and possess the ability to carry out the role. We also suggest that every employee has a minimum probation period of six months to ensure that you have enough time to assess their suitability. Management of the probation period will become imperative if these changes are made.
Introduce Single Status of ‘Worker’
There are currently three forms of status in the UK:
- Employee
- Worker
- Self-Employed.
Labour’s plan is to simplify these categories.
We think they will try to merge the Employee/Worker categories to form one status.
Our view: The current worker statuses are confusing following the Pimlico Plumbers and UBER case decisions, and change is well overdue. This would be a positive change, as the current system is confusing to employers when trying to understand whether someone is self-employed, an employee, or a worker.
Whistleblowers
Labour plans to update and strengthen the whistleblowing protections afforded by the current law, particularly focusing on women against sexual harassment in the workplace.
Our View: Employees are increasingly relying on the whistleblowing law to raise cases against their employer in lieu of having any other form of legitimate complaint against their employer. At present, the whistleblowing law only covers areas of public interest, so it will be interesting to see what Labour’s plans are here.
Self-Employment
Labour says that it wants to improve upon the current requirements when engaging self-employed people. The proposed changes include a right to a written contract, tackling late payments, and improving the health and safety requirements for self-employed workers. Labour claims that strengthening the links with Unions will benefit the self-employed.
Our View: Self-employment is not an area that needs significant change other than the fact that it has grown due to the “GIG Economy.” We would always suggest putting in place T&Cs and payment agreements anyway. Current Health and Safety laws apply to all workers, so it is unclear what the angle is on any planned changes in this area.
Redundancy and TUPE Rights
Labour wants to change the current rules surrounding the number of people required to make consultation compulsory for affected employees from a workplace limit to a workforce limit.
Our View: This is only likely to affect larger businesses; however, it will mean more time is required to consult on more contract transfers for businesses that fall within any new employee number limit.
Flexible Working
The new approach is to build on the most recent changes in the Flexible Request Laws. This is expected to centre around using technological advances to allow people to work more flexibly and using flexi-time arrangements to help parents deal with education terms and holiday periods.
Our View: This law was recently changed, significantly strengthening the existing Flexible Working Request rules, so we think changes here may be minor. Labour could, however, determine that employees with certain characteristics, e.g., mothers with young children, be granted Flexible Working regardless of business requirements.
Summary
Many of the areas being considered in Labour’s new laws will not significantly change what the Conservative Government had already implemented.
However, more employee-focused changes are inevitably coming in the next few months, which all employers will have to be aware of and manage.
We understand your business challenges and how to manage changes such as those above.
Read more about our HR services.
If you have any concerns or questions, please contact Jon at jon@hrmartuk.com or call us at 01903 754107.
