The UK has a new Prime Minister, Sir Keir Starmer, following Labour’s decisive win in the recent elections.

With this shift in government, businesses must brace for significant changes in employment law, as Labour’s “Plan to make work pay” promises substantial reforms aimed at strengthening employee rights.

Kate Palmer, Employment Services Director at Peninsula, emphasises the need for employers to stay vigilant. Labour’s manifesto includes over 60 proposed changes, many set to be implemented within the first 100 days of Starmer’s tenure.

These reforms will likely lead to a surge in employment tribunal claims, making it crucial for businesses to update their policies and contracts to ensure compliance.

Key Changes to Expect

  1. Day One Rights: Basic rights such as unfair dismissal, sick pay, and parental leave will become effective from day one of employment. This major shift could result in a rise in tribunal claims, particularly from employees with under two years of service.
  2. Single Status of ‘Worker’: The distinction between employees and workers will be abolished, granting all staff equal rights and protections. This change necessitates the overhaul of current contracts.
  3. Strengthening Existing Rights: Enhanced protections for pregnant workers, whistle-blowers, and those involved in TUPE processes are expected. Labour also plans to reinstate the School Support Staff Negotiating Body and establish a Fair Pay Agreement in the adult social care sector.
  4. Increased Wages: The National Living Wage will continue to rise, with the Low Pay Commission considering the cost of living in its recommendations. Unpaid internships and certain unpaid hours in sectors like social care will be banned.
  5. Sick Pay: Statutory Sick Pay (SSP) will be available to all workers without a waiting period, with an increased rate representing fair earnings replacement. This could add significant costs for employers.
  6. Pay Gaps: Companies with over 250 employees will need to report on ethnicity and disability pay gaps.
  7. Harassment: Employers will be required to prevent harassment, including by third parties, with a proactive duty to prevent sexual harassment.
  8. Flexible Working: Flexible working will be a default right from day one, except where it is not feasible.
  9. Family-Friendly Policies: Parental leave will be a day one right, with additional rights like bereavement leave and extended protection for pregnant employees.
  10. Right to Disconnect: Labour plans to introduce a right to disconnect, ensuring employees are not expected to be available outside working hours.
  11. Caring Responsibilities: Labour will review Carer’s Leave, potentially making it paid, which would require contract updates.
  12. Zero-Hours Contracts: Labour intends to ban one-sided flexibility in zero-hours contracts, granting regular contracts to workers with consistent hours over 12 weeks.
  13. Fire and Rehire: Labour plans to strengthen the statutory code of practice on dismissal and re-engagement to prevent workers from being forced into worse contracts.
  14. Trade Union Laws: The rights of trade unions and their representatives will be strengthened, with simplified processes for union recognition.
  15. Enforcement Rights: The time limit for bringing Employment Tribunal claims will be extended to six months, potentially increasing the number of claims.
  16. Tips: The law on tip distribution will be strengthened to ensure hospitality workers receive their full tips.
  17. Menopause: Employers with over 250 employees will be required to produce Menopause Action Plans, with guidance provided for smaller employers.
  18. Wellbeing: Employers will need to support workers’ physical and mental health, including raising awareness of neurodiversity and long Covid.
  19. Artificial Intelligence: The new government will collaborate with stakeholders to understand the implications of AI and new technologies on work, jobs, and skills.

With these extensive changes on the horizon, businesses, particularly SMEs, must prepare for increased operational costs and potential legal challenges. Employers should promptly update their policies and practices to align with the forthcoming legal landscape, ensuring they remain compliant and competitive.

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Amelia Brand

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.