Getting ready for a new era of employment law rights – As a business leader what are your plans?

As the general election is fast approaching, employers now know what the major political contenders for government intend to do when it comes to employment law reform. The key players are the Labour Party, the Liberal Democrats Party and the Conservative Party; each has laid out their vision for the workplace in Britain. Here’s what employers might expect from each party should they come to power.

Labour Party: “A New Deal”

There is of course no change in direction for the Labour Party – it will continue to focus on strengthening workers’ rights; its current manifesto suggests a number of significant changes, which it intends to implement within the first 100 days of winning the election:

• Workers will be allowed to bring unfair dismissal claims from the first day of employment, subject to their probationary period (the current rule requires two years’ service).

• The flexibility of a zero hours workforce will be removed as zero-hour contracts will be banned. The aim is to provide workers with more job security and predictability.

• Employee and worker status will be removed to create a single “worker” category, with the aim of providing greater employment rights to those sitting in the current “worker” category.

Liberal Democrats: “A Fair Deal”

The Liberal Democrats have committed to modernising employment rights by fixing the gig economy and providing more security for those in less stable forms of employment:

• Statutory Sick Pay will be increased, and more people will be able to access it.

• A new “dependent contractor” employment status will be introduced so that more workers have better rights relating to minimum earnings, sick pay and holiday entitlement.

• Zero hours workers will be entitled to a 20% premium on the national minimum wage.

Conservative Party: “A Clear Plan”

The Conservative Party has focused on changes in government spending and tax policies to influence and improve the economy. For example:

• There is a commitment to reduce National Insurance contributions to 6% by April 2027, which is a total tax cut of £1,350 for the average worker earning £35,000 per annum.

• National Insurance contributions will be removed to support the self-employed.

While all parties have committed to improve worker’s rights, business leaders have been focusing on the Labour Party’s commitment as the likelihood is that it will lead the next government.

What can employers do now?

In anticipation of there being a Labour government, employers will need to adapt quickly with regard to workplace practices, workflow planning and, in some cases, costs. To start that process, a Strategic Business Review of the organisational structure and employee relations practices needs to be completed.

Any Strategic Business Review will need to focus on the following:

1. An assessment of the workforce structure: This assessment will be particularly important where the operation is heavily reliant on zero hours contracts and worker status. From here, the potential financial and operational impact of the proposed changes can be identified and responded to; new contracts may need to be issued to reflect the change.
   

2. A review of current employee relation practices of unfair dismissal claims: Businesses need to consider how they will respond to a larger proportion of the workforce having unfair dismissal protection; the option for an “at will” dismissal in the first two years will no longer be available. Managers trained to respond to workplace issues supported by up-to-date robust procedures will be one way of managing employee's performance or behaviour to minimise the risk of unfair dismissal claims.
   

3. Consideration of other flexible working arrangements: This exercise will be important where there is reliance on zero hours contracts due to the nature of the business.

While Labour’s route for creating greater worker protection is clear, an employer’s journey is less than clear: Will drastic decisions need to be made regarding workforce planning both operationally and financially to support the new era ahead? Will employers be forced to retain workers who are not right for their business?

To move forward with confidence let FG Solicitors’ Strategic Review get you ahead.

 Contact FG Solicitors today on 0808 172 93 22 or complete our quick contact form for a no obligation discussion!

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This update is for general guidance only and advice should be taken in relation to a particular set of circumstances.