Following their decisive victory in the recent General Election, Labour is poised to implement sweeping reforms that will significantly impact businesses across the UK.
The new government, led by Keir Starmer, has outlined an ambitious agenda aimed at enhancing workers’ rights and workplace regulations.
“If the new Labour Government stick to their manifesto pledges, we should see a raft of consultations in their first 100 days of government to inform what could be biggest shake-up of the workplace in recent times,” says Matt Fryer, MD of Brookson Group, a People2.0 company.
Here are the key changes businesses need to prepare for:
Day-One Rights
Labour plans to abolish the qualifying periods for basic employment rights such as unfair dismissal, sick pay, and parental leave. This will require businesses to revise employee contracts and introduce new workplace policies to avoid legal complications. Employers can utilise resources like BrightHR, which offers over 900 HR documents, templates, policies, and risk assessments to ensure legal compliance. Alan Price, CEO of BrightHR, emphasises the importance of digitalisation and automation in HR processes to manage the upcoming changes efficiently. He advises businesses to review their working practices and prepare for increased transparency and compliance requirements.
“Labour’s promise to deliver the biggest shake-up in workplace law for a generation presents a unique opportunity for businesses, and their HR teams, across the economy. The ban on zero-hour contracts, ending fire and rehire, and introducing day-one rights aim to provide greater security, protection and predictability for employees,” says, Stephanie Coward, Managing Director of HCM at IRIS Software Group.
Also, Catrina Smith, partner at law firm Norton Rose Fulbright notes that “employment lawyers and HR professionals need to start preparing for a potential shake-up on the likes of day one rights, unfair dismissal, family friendly rights, employment status and trade union rights. However, some of these changes could take some time to come into force given their complexity and range. While some of these proposals will be a priority, others will take longer to enact and many of these will need further consultation before being implemented.”
Pay Adjustments
The National Minimum Wage is set to rise to £10 an hour, with all workers entitled to Statutory Sick Pay (SSP). Failure to comply could result in hefty penalties and enforcement actions from HMRC. Businesses are advised to seek employment law advice and invest in integrated HR and payroll software that adapts to wage regulation changes, ensuring accurate and compliant payroll processing.
Family-Friendly Rights
Labour aims to expand statutory maternity and paternity leave, review the shared parental leave system, introduce bereavement leave, and strengthen protections for pregnant workers. The party also plans to offer paid family and carer’s leave, flexible working options, and enforce stronger rights for workers facing family emergencies. Additional safeguards for pregnant employees, whistleblowers, those facing redundancy, and individuals subject to TUPE will also be implemented.
Flexible Working Policies
While the specifics of flexible working changes remain uncertain, businesses should proactively prepare. This includes upskilling managers to handle flexible working requests, implementing shift and rota planning software, and maintaining efficient employee timekeeping systems. These measures are essential to adapt to potential changes and maintain operational efficiency.
Matt Fryer, MD of Brookson Group, anticipates a significant shake-up in the workplace, emphasising the need for thorough consultations within Labour’s first 100 days. He highlights the importance of balancing improved worker rights with business needs, particularly in the flexible workforce sector.
Mental Health and Employee Wellbeing
Labour intends to place a greater emphasis on supporting the mental health and wellbeing of workers. This will involve work capability assessments to assist people with disabilities in returning to work. Employers should consider having a document template library for these assessments and investing in employee assistance programs to support mental health initiatives and comply with potential new regulations. Stephanie Coward, MD of HCM at IRIS Software Group, highlights the potential financial and cultural impacts of Labour’s reforms. She encourages businesses to embrace digital transformation to manage costs and boost productivity amid the changes.
What does the future look like?
Labour’s comprehensive agenda aims to transform the UK workplace, enhancing rights and protections for workers while challenging businesses to adapt swiftly. As the new government takes its first steps, businesses must stay informed and proactive to navigate these significant changes successfully.
The first 100 days of a new government will set the tone for the kind of impact a Labour government will have on small business owners. Significant change is on its way, especially if Labour makes good on their promise to introduce the 60+ employment law reforms outlined in their manifesto. Employers must be proactive in reviewing their HR policies and finding solutions to manage and automate pay changes, leave and absence, lateness, holidays, flexible working, expenses, timekeeping, and more.
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.
Recent Comments on Stories