What could happen to UK employment law and recruitment under a Labour government?

What could happen to UK employment law and recruitment under a Labour government?

The United Kingdom is holding a general election on 4 July and according to all the opinion polls, the Labour Party are most likely heading for victory. While this is by no means a foregone conclusion, it’s worth considering now what may happen to workplace laws, if a change in government does materialise on 4 July.  The consequences could be far-reaching for employers, employees, and any stakeholders in the world of employment.

The Labour Party has already pledged to introduce an employment law bill within the first 100 days of power, should they win the election. But what does this include? Here’s a summary of the key points:


A single ‘worker’ status 

Employees currently enjoy a wide range of rights and protections which are not afforded to those who are self-employed or freelance. Labour plans to essentially combine the two so there are just ‘workers’ rather than employees and self-employed.

Whilst expanding the criteria for ‘worker’ status would extend statutory rights and protections to more individuals, this would potentially lead to increased costs and operational changes for employers. 

It could also cause disruption in industries which rely heavily on contractors. Affected employers will need to reassess their hiring practices and could lead to a rise in disputes over worker classification and employee rights.


Unfair dismissal extension

Currently employees must be employed for a minimum of two years to claim unfair dismissal. Labour plan to bring this into effect from day one of employment, in a bid to increase workers’ rights.  From an employee perspective, this is a welcome move that would protect their jobs from the outset and engender a culture of stability and fairness. For employers, it could mean increased administrative and financial burden which may in turn lead to a more cautious approach to hiring.


Scrapping zero-hours contracts 

The Labour Party plans to remove zero hours contracts where workers have delivered regular hours for 12 weeks or more. While such a move would increase job security, it would also remove flexibility for employers in industries with unpredictable workloads, such as hospitality and logistics.

It’s not just employers who benefit from zero-hours contracts; for various segments of the workforce, such as students, caregivers and those seeking a secondary income, the flexibility means they can take on work when they need it and decline it when they are unable to commit.


Ending ‘fire and rehire’ 

‘Fire and rehire’ is the practice of dismissing employees when the terms of a contract no longer suit either or both parties, and then offering to hire them back again on revised terms. This practice is not widespread but tends to occur during periods of economic uncertainty or when businesses are going through periods of change.  Labour plans to improve consultation procedures and ban this practice. 


Introducing the ‘right to disconnect’

Several European countries have already implemented the legal right to ‘switch off’ from work, outside of contracted hours. If Labour win the election, the UK could be next to follow suit.

Whilst this is a welcome step for promoting work-life balance, it could cause problems for smaller businesses, which typically work to less structured patterns and where communication outside of 9-5 is not uncommon. However, it is broadly agreed that any negative impact would be balanced out by higher levels of productivity and employee satisfaction.


Employment tribunal extension 

A proposed extension to the timeframe for employment tribunals, from 3 to 6 months would likely benefit both employers and employees, giving both more time to negotiate and increase the likelihood of setting claims outside of the tribunal system.


Minimum Wage Raise

Labour plans on raising the National Minimum Wage to £10 per hour for all workers, including young adults who earn less under the current tiers. Statutory Sick Pay will also be available to everyone.


Parental Leave and Childcare

The Labour Party plans to improve parental leave policies, including extending maternity and paternity leave and increasing pay during leave periods. Additionally, they propose the introduction of universal, free childcare to support working parents and reduce the financial burden of childcare costs.


Equal Opportunities and Anti-Discrimination

Key measures to promote equal opportunities would include:


a. Gender Pay Gap Reporting

Enhanced gender pay gap reporting requirements would make it mandatory for all employers to publish detailed information about pay disparities between men and women. This would help to identify and address inequalities, promoting fairer pay practices.


b. Tackling Discrimination

Anti-discrimination laws would be strengthened, ensuring that all workers are treated fairly regardless of their background. This includes introducing stricter penalties for employers who engage in discriminatory practices and providing better support for victims of discrimination.


In summary, the UK Labour Party's proposed changes to employment law represent a comprehensive and ambitious plan to improve workers' rights and conditions. For employers, it’s important to be prepared for such changes and to be aware of the impact on recruitment practices. With increased rights for contractors and freelance workers set to be implemented, it’s likely we’ll see a slight swing towards hiring permanent members of staff.

Crucially, with employees afforded better protection from day one, employers will need to focus more than ever on a rigorous recruitment process, to minimise the risk of making the wrong hire and facing into a potentially tricky exit situation.  Rigorous does not need to mean longer or harder. At Leonid, we pledge to fill all roles within one calendar month – but never at the expense of quality or focus.


Disclaimer: Leonid is not affiliated to any political party; the purpose of this article is to present the facts of the Labour Party’s policies, with no intention to influence any political views.