A brand-new Labour cabinet in play means changes across all sectors in the UK – including employment. With a new Employment Rights Bill recently announced, the recruitment landscape is already shifting – but luckily, we at Point 13 have our fingers on the pulse. In this post, we’ll look at what kinds of proposed changes the new Government will bring to employers and employees alike – and how you can plan for them accordingly.
Employment policies are due to evolve under the Labour Party’s manifesto, “Labour’s Plan to Make Work Pay”, promising improved workers’ rights and protections, a ban on exploitative practices and, likely, a revision in the way HR systems function. While many plans are afoot, including removing restrictions on trade union activity, addressing pay gap disparities, and ending ‘fire and rehire’, we’ve focused on four core changes, the pros and cons of each, and how they’ll affect you as an employer.
Goodbye to Zero-Hours Contracts
What Will Change? Labour is proposing a ban on – or at least a significant reduction in – zero-hours contracts to provide workers with more predictable and stable employment and put an end to what the Government has deemed “one-sided flexibility.” Employers will also have to give reasonable notice of any change in shift patterns.
Pros and Cons: Eliminating exploitative work arrangements and putting an emphasis on job security and fairness will likely have a positive impact on employees’ productivity and morale. In addition, more individuals may be encouraged to seek stable employment, increasing the talent pool. However, as Robert Burden from Kane HR points out, scrapping zero-hours contracts could cause “financial constraints” for industries such as manufacturing and hospitality that rely heavily on the flexibility this type of arrangement can afford.
Unfair Dismissal and Parental Leave Protections
What Will Change? At present, a member of staff must be employed for a minimum of two years to be able to claim unfair dismissal. The new Government is proposing to bring in day-one rights for unfair dismissal, although employers will be able to operate probationary periods. Meanwhile, Starmer et al. are also focusing on increased parental rights and enhanced redundancy protections for employees on or returning from maternity leave: they plan to make the dismissal of a woman during pregnancy or within six months of her return to work unlawful, except in specific circumstances.
Pros and Cons: Much like the abolition of zero-hours contracts, these new protections are likely to foster a greater sense of security and stability and will promote fairness in the workplace. But as job board giant Monster notes, these policy changes could increase the number of dismissal claims and, in turn, the administrative and financial burden on employers. Furthermore, companies may become more reluctant to hire new employees.
Statutory Sick Pay and a Genuine Living Wage
What Will Change? Labour is proposing the implementation of statutory sick pay from day one. The proposed change also involves the removal of the lower earnings limit so that sick pay is available to all workers. Further, and particularly pertinent in today’s cost-of-living crisis, Labour plans to raise the minimum wage to a “genuine living wage” and eliminate discriminatory age bands so that all adult workers receive the same minimum wage.
Pros and Cons: Day-one access to statutory sick pay would provide a vital safety net to workers, allowing employees to focus on recovery without worrying about their finances, while raising the minimum wage would encourage greater monetary equity and, once more, benefit staff wellbeing by removing financial stress. These changes would, however, mean increased costs for employers in the long term and may lead to inflation.
Flexible Working and the Right to Switch Off
What Will Change? Flexible working would be the default from day one, with employers required to accommodate family-friendly, flexible hours as much as is reasonable. The Government also plans to institute the right to disconnect – that is, the legal right to switch off from work outside regular working hours.
Pros and Cons: Flexible working is a godsend to many working families with young children who would not normally be able to take time off for childcare. The normalisation of flexible working would particularly benefit women, who are disproportionately burdened with caregiving responsibilities and forced to sacrifice professionally. Meanwhile, as Robert Burden explains, offering employees the option to disconnect from work “would naturally promote a healthier work-life balance”, thus reducing stress levels and increasing morale. While boundaries around flexibility and communication expectations will need clear guidelines, Burden goes on to argue that “the long-term benefits of improved employee satisfaction and retention may outweigh the perceived drawbacks”.
How to Prepare
If these proposed changes do come into effect, employers and HR departments alike will need to review, update, and, in some cases, overhaul their policies and procedures to ensure compliance. In particular, it’s critical to focus on:
- The feasibility of offering more permanent and fixed-hours contracts
- Implementing flexible working arrangements
- Refreshing your onboarding processes
- Keeping detailed records of employment decisions
- Providing training for management
- Clear communication with both current and prospective employees
While employment law changes will require compromise in some cases, the reintroduction of employment rights and a reshuffle of the way we work has the potential to be hugely positive for employees and employers alike. Watch this space!
