The Labour Party has ambitious plans for reforming employment law. It has promised to introduce legislation on its New Deal for Working People within the first 100 days of a new Labour government. This means by 12 October 2024, assuming Labour wins the general election on 4 July 2024.
This doesn’t mean that new laws will be in place by 12 October 2024. It just means that Labour is committing to start the process as quickly as it can.
So how quickly might the New Deal be implemented?
Unless and until Labour publishes more details, nobody can say with any certainty what’s going to be implemented when but here are some thoughts on possible timelines.
Possible quick wins for Labour – from 5 July 2024 to April 2025
National Living Wage.
Labour has pledged that:
1. the NLW will take account of the cost of living; and
2. that the 18-20 age band will be removed.
Labour could set the new remit immediately on coming into government and ensure that a new cost-of-living-sensitive minimum wage takes effect from April 2025. Labour could abolish the 18-20 age band at the same time although it might choose to delay that additional change, which could have a significant effect on businesses employing younger workers, pending further consultation.
Tips Act.
The new Tips Act – requiring employers to pass 100% of tips to workers – has already received Royal Assent and was expected to come into force on 1 October 2024. Labour has pledged to strengthen the law to ensure workers receive their tips in full. This is an easy win for Labour, since it involves simply enacting legislation that is already in place.
Statutory sick pay reforms.
Labour has promised to remove the need to wait until day four to receive SSP and the requirement to earn above the lower earnings limit to qualify.
Both changes require primary legislation and are expected to be made via the Employment Rights Bill. It is just about possible that these changes could be made in April 2025, as they won’t require any substantial follow-up regulations to bring them in.
Trade Union law repeals.
Labour has pledged to change the law around trade unions in several ways. This includes:
• repealing certain anti-strike laws including, for example, the laws around minimum service levels during public sector strikes.
These repeals seem likely to take effect instantly when the Employment Rights Bill receives Royal Assent.
Day 1 parental/paternity leave
• Labour has promised “day 1 parental leave”. It’s unclear if this means parental leave within the strict (limited) legal meaning of that term, or any kind of right for parents to take family leave.
• Parental leave (the right to take up to 18 weeks’ unpaid leave until a child is 18) currently has a one-year qualifying period, which could be scrapped relatively easily using powers in existing legislation (but this type of leave is hardly ever used).
• Paternity leave (the right to take paid time off around the birth or within the first year) currently requires six months’ employment and Labour could also scrap this under existing powers.
It’s therefore conceivable that these reforms could happen very quickly, although much depends on how much consultation Labour plans to do first.
Predictable Terms Act
The Predictable Terms Act gives workers the right to request (but not to have) a more predictable contract. It has already received Royal Assent but needs accompanying regulations to bring it into force. It was expected to come into force in September.
The Act falls a long way short of delivering what Labour wants to achieve for zero-hours workers, but it’s conceivable that Labour could choose to bring it into force as a stepping stone on the way to further reform.
Key priorities – within two years
1. Right not to be unfairly dismissed from day 1.
This is one of Labour’s headline proposals and we can reasonably expect it to be a priority. In theory, Labour could achieve this almost immediately. In practice, however, this proposal is likely to be subject to extensive consultation particularly as to the new rules that are likely to be needed for dismissals during probationary periods, and an implementation period.
It will also require an updated (or new) Acas Code of Practice, which will need to be consulted on. It seems most likely that this will take effect in October 2025 or April 2026 at the earliest.
2. Bereavement leave.
We would expect the Employment Rights Bill to make provision for bereavement leave, but secondary legislation might be needed to bring the right into effect so this could take up to two years.
3. Zero-hours contracts, right to contract based on average hours.
Labour has made banning “exploitative” zero-hours contracts and creating a right to a contract based on average working hours one of its flagship proposals.
We would expect the Employment Rights Bill to include provision for this. It’s very unclear, however, how these new rights will operate in practice. Substantial consultation and secondary legislation will almost certainly be needed. It’s possible that new rights could take effect within the first two years but in practice this may be ambitious.
Longer term – not until towards the end of a first term of government
1. Single worker status.
Labour has said that it will carry out a full and detailed consultation on its plans to move towards a single worker status. This is an extremely complex and difficult subject to legislate on, so it may be that any changes will only take effect towards the end of a Labour government’s first term in office.
2. Single enforcement body.
The Employment Rights Bill is likely to create this body, but as it seems inevitable that there will need to be extensive consultation about its remit, powers, staffing and funding, it may be years before it is fully up and running.
3. Expansion of pay gap reporting.
Labour’s plans to introduce ethnicity pay gap and disability pay gap reporting are also likely to take some time to implement in practice.
4. Reform of family leave framework.
Labour has suggested that it will review the family leave framework within the first year of coming into government. In the absence of any specific proposals at this stage substantial reforms are likely to be a long way off – not until the end of a first term in government at the earliest.
Conclusion
Employers should not worry too much about significant changes being rushed in by the end of this calendar year, despite all the talk of the first 100 days. Employment law reform takes time. The direction of travel is clear, though, so if Labour does win the election, we are going to see very significant reforms sooner or later.
For any advice do email nicola.goodridge@goodhr.co.uk or call +44 7917 878384
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