With the Labour party now in power they are looking to ‘modernise the world of work’ with their New Deal for Working People, with a pledge to introduce legislation within 100 days.

A number of the proposals represent quite a departure from current employment law, so employers need to be planning ahead and understand the impact they may have on their business.

Let’s have a look at some of the most significant changes.

National Minimum Wage

The change that will potentially impact the most business owners will be the abolition of age ranges in relation to the National Minimum Wage. Smaller businesses will no doubt feel the impact of this change significantly, as will young people entering the job market for the first time, as employers may favour more experienced workers for the same rate of pay.

Day one right for unfair dismissal

Currently, individuals must generally be employed for two years to bring an ordinary unfair dismissal claim, but Labour is proposing for this to be a right from day one, along with parental leave and statutory sick pay. Employers would still be able to dismiss an employee if they have failed probation, but only after a fair process.

At the time of writing, Labour is yet to deliver their preferred method of implementing this policy, however this change is likely to result in an increase in unfair dismissal claims.

Tribunal claims

With the new Government pledging to give greater access to tribunals, coupled with the plan to extend the time limit bringing tribunal claims from three to six months, employers are naturally concerned about the potential influx of claims.

What we don’t yet know is the detail behind this and what measures will be brought in to support employers through this transition. It seems counterintuitive however not to encourage the resolution of claims outside of the already overwhelmed tribunal system and increasing the window to bring a claim arguably goes hand-in-hand with a greater opportunity to resolve matters via ACAS conciliation or alternative forms of dispute resolution such as mediation.

Fairer practices

Whilst a lot of the proposed changes to employment law practices sound substantial, how significant the impact will be remains to be seen.

A lot of the changes actually relate to the misuse and abuse of certain processes and there is no blanket ban on these practices altogether, simply a pledge to ensure the experience and process is as fair as possible for both parties.

For example, there will still be the ability to fire and rehire, to decline flexible working requests and to dismiss someone post-maternity leave, but only where a genuine reason exists and a fair process has been followed.

The key for many small businesses will be how they manage the shift from the ability to make quick, commercial decisions to a more measured, proportionate approach, acting only after following a fair and robust process.

Image by Gerd Altmann from Pixabay

Other changes to be aware of are as follows:

Exploitative zero hours contracts will be banned. All workers will be entitled to contracts that reflect the hours they regularly work.
Removing the lower earnings limit and the three unpaid waiting days in respect of Statutory Sick Pay (SSP).
Creation of a genuine living wage based on the actual cost of living.
The introduction of a single status of ‘worker’ to minimise confusion– individuals will either be workers, or self-employed.
Unpaid internships will be banned except when part of a course or training.
Revisit recent flexible working legislation and expand on this to further support workers access to flexibility at work.
Introduce statutory bereavement leave from day one of employment.
Extend workers’ rights in relation to disability and race protection, including increased pay gap reporting and additional protection relating to equal pay claims, which are currently limited to sex.
Protection from dismissal for up to six months following maternity leave. Some level of protection already exists, but Labour’s proposal will make it unlawful to dismiss someone within that six-month period except in specific circumstances (which have not yet been set out).
Bring an end to fire and rehire practices. There will be a strengthened code of practice that will prevent fire and rehire as a standard restructuring method, helping to ensure that a proper process has been followed.
Increased access to union support. There will be clearer communication from a company to its workers regarding their rights to join a union, along with improved access to the workplace for unions and potentially reduced thresholds for union recognition.

Next steps

Practical steps will include reviewing disciplinary and capability procedures to ensure that clear steps for managing employment issues are outlined and applied consistently.

Having appeals heard fully by an independent party will also reduce the potential for unfair dismissal claims.

Businesses also need to ensure they have clear and measurable objectives for probationary periods from day one, which will ensure transparency for workers and employers, as well as having evidence-based decision making at the end of a probationary period.

It’s important that businesses assess their HR capabilities, and a cost-effective option can often be to partner with an outsourced HR partner to support them with best practice and ensure their business is proactive, prepared and compliant.

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