labour has pledged the ‘biggest upgrade to rights at work for a generation’. At the King’s Speech, it was announced there would be an Employment Rights Bill, which would deliver on Labour’s Plan To Make Work Pay: Delivering a New Deal for Working People. The key ambition is to propose a substantial shift in employee relations.
Reform of employment status
At present, there is a distinction between an employee and a worker. An employee has more obligations towards their employer and is entitled to more protections and rights in law, an example of this is a right to not be unfairly dismissed. However, a worker is on a more casual basis, and the work has to be done under the contract personally, and it cannot be passed onto another party. Labour’s amendments intend to introduce a single status of worker for all except for self-employed. However, this idea was explored back in 2017 through the Taylor Review and was dismissed due to tax law complexities, so it is questioned if it will be instigated. Concerns of reduced flexibility for either party are on the horizon. The current set of employment conditions needed for an individual to be considered a worker can facilitate a flexible working arrangement which is beneficial for both sides. For example, the lack of mutuality of obligation enabled employers to adapt to fluctuating demand while enabling workers to reject work at their discretion. Overall, a risk of over-simplification is possible. Notably, this is a major task, so it may be unachievable within one parliamentary term.
Unfair Dismissal:
Currently, an employee cannot make a claim of unfair dismissal if they have been in the workplace for less than two years. Labour proposes this will be amended to a day-one right. There will be an exemption of a probationary period to allow employers to assess employees within the job. As we are yet to see an Employment Rights Bill, we cannot analyse the detail so it would be interesting to see what will be considered appropriate for probationary periods. Where the probationary exemption doesn’t apply, employers will need to adopt sometimes lengthy procedures before a fair dismissal. This is a considerable departure from current employer’s practices and will likely require employers to think about their current recruitment processes and effective management of probationary procedures. However, this implementation may lead to an increasing wait time for employment tribunals which are already facing a backlog.
Ban on ‘exploitative’ zero-hour contracts
Zero-hour contracts can be a flexible arrangement for workers and employers. Typically you do not need to take any work offered and you do not have to be provided with a minimum number of hours to work. It is key to have flexible work arrangements available to ensure there is an increase in workforce participation within groups of economic inactivity such as parents of young children. The Labour Party proposes to end ‘one-sided’ flexibility and ensure all jobs provide a baseline level of security and predictability. Within the proposals it is noted that these regulations will only apply to ‘exploitative contracts’, this will ensure that employers still can use zero-hour contracts where they cannot guarantee a minimum number of hours of work due to fluctuating demand. The King’s Speech provided us with further information that all workers will have reasonable notice of any changes in shifts with proportionate compensation for any cancelled or curtailed shifts. Further, there will be a 12-week reference period in the hours worked which will be reflected in the contract. However, the specifics are bare. It seems that this provision is similar to that of the Predictable Terms and Conditions Act – although it was only a right to request. Nevertheless, this is potentially a step forward in achieving their proposal.
Conclusion
The precise impacts of the proposals will be unknown until implementation and further detail is provided. The specifics of the policies are the key-holder in determining whether they will support or stifle economic growth. Nonetheless, employees will have substantial rights from the beginning. It is noted that the Bill will be introduced within the first 100 days that Labour is in Government. However, to go through the legislative process and become an Act of Parliament will be time-consuming and take far longer. In effect, any actual change is unlikely to appear until the beginning of next year at the earliest. It is hoped that transitional arrangements will be put in place, so employers can prepare for the new employment landscape.
