Operational Update

Labour Government = Change for Employment Laws

What are the implications for business?

Labour has set out their intentions for change in their ‘Plan to Make Work Pay’


Here we highlight the top three most significant proposals we believe will have the greatest impact on businesses.

Labour has pledged to introduce legislation within its first 100 days in power,
and the King’s Speech on 17 July is likely to contain an Employment Rights Bill.

The measures in any such bill are likely to undergo amendment as it passes through Parliament. Implementation of simpler matters could be a matter of months, whereas more complex changes might be a few years away.

Introduction of a right to disconnect outside normal working hours

What’s the proposal?
Labour is proposing to introduce a right to disconnect which it refers to, in its Plan to Make Work Pay, as the “right to switch off”. This would seek to redress employees’ work-private life balance, particularly in light of the growth of remote and hybrid working practices.
Labour’s proposal is scant on detail at this stage, but it does acknowledge that there are other
countries that have already taken action to enable workers to “switch off”. Specifically, Labour refers to the models in Belgium and Ireland.
Belgium takes a robust approach, with a specific right not to be contacted outside normal working hours, and a requirement on employers with 20 or more employees to give the right to disconnect through formal written provisions. This can be done via a company-level collective
agreement or in the employer’s internal works rules.
In Belgium, employers that are covered by a sector-level collective agreement already dealing with the right to disconnect are exempt from having their own company-level agreement or works rules on the right to disconnect.
In contrast, Ireland’s approach to the right to disconnect is somewhat softer. There, the Workplace Relations Commission has established a code of practice that sets out best practice and practical guidance on disconnecting.
The code refers to an employee’s right to disengage from work and work-related electronic
communications, including: an employee’s right not to routinely carry out work outside normal working hours; an employee’s right not to be penalised for refusing to attend to work matters outside normal working hours; and the duty to respect another person’s right to disconnect from work.
The right to disconnect in Ireland derives from existing legislation related to working time and health and safety.
It remains to be seen which model the new Government settles on as the Belgian and Ireland
approaches are quite different. However, if this is to be a genuine right to disconnect, then the model in Belgium is clearly preferable.

Practical Implications

If this proposal is introduced, employers would need to:

  • Effectively communicate the new right via an easily accessible policy that is endorsed by senior leaders
  • Train line managers to ensure that the right is consistently enforced in all parts of the organisation.

Employment status reforms

What’s the proposal?
Employment status is important because it shapes our employment rights. Currently, we have a threetier system of employment status. An individual can be an employee, a worker or self-employed.
An employee is entitled to all statutory employment rights. Workers are entitled to some employment rights, but not all the employment rights that employees have. In contrast, individuals who are self employed have very few employment rights.
Determining whether an individual is an employee, worker or self-employed is not always
straightforward. This issue has been particularly contentious in the gig economy, leading to significant case law developments in recent years.
Labour is proposing to reduce the three-tier system and move towards a single status of worker for everyone except the self-employed. This would involve merging employees and workers into a single category.
If Labour proceeds with this proposal, individuals currently classified as workers would likely gain the same significantly enhanced statutory employment rights as employees. Consequently, organisations that rely heavily on casual workers are likely to be burdened with increased costs.

Practical implications

If this proposal is introduced, employers would need to:

  • Review the workforce to assess how many individuals might be impacted;
  • Ensure that employment contracts, and policies and procedures align with the new category of worker;
  • Update payroll systems to reflect the new worker category; and
  • Reassess the business model if the organisation is reliant on casual workers.

Removal of the two-year qualifying service requirement to bring an ordinary unfair dismissal

What’s the proposal?
Currently, an employee must have two years’ service before they can pursue a claim of ordinary unfair dismissal. Labour is proposing to remove this requirement altogether and make it a day-one right.
In their Plan to Make Work Pay, Labour states that the current qualifying period is arbitrary. It says that its plans “will not prevent fair dismissal, which includes dismissal for reasons of capability, conduct or redundancy, or probationary periods with fair and transparent rules and processes.”
Labour’s proposal is light on detail, leaving the practical implications of a fair and transparent process somewhat unclear. Undoubtedly, this will be subject to much discussion and consultation.

Practical implications

If the proposal is introduced, employers would need to:

  • Exercise more caution in recruitment to select the most suitable candidate;
  • Ensure a thorough onboarding processes;
  • Review their approach to probationary periods to ensure effective use;
  • Invest more in training and development;
  • Implement fair performance management processes to identifying capability issues early;
  • Follow a fair process for all dismissals, regardless of employee tenure; and
  • Review and update any relevant policies to ensure a fair process for all workers.

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