Labour government promises changes to worker status, protection and rights

The new Labour government has pledged to introduce its 'new deal for working people' within its first 100 days. We’ll look at their plan for changing worker status - moving towards a single status of worker - and improving workers’ employment rights.  

Labour's ‘Plan to Make Work Pay’ and its Manifesto contained a significant number of employment law reforms and we expect to see more details of their proposals and plans emerge in the coming weeks.  Some of the planned reforms will happen quite quickly while others will be subject to a period of consultation meaning legislation will not appear until well into next year. Nonetheless, we have a good idea of what’s coming and employers would do well to get ready for it now. 

To that end, in the weeks following Rishi Sunak’s calling of the General Election on 4 July, we ran a series of webinars to help HR professionals and businesses prepare for what might lie ahead. Those Election Specials covered three key areas, namely:

- Worker status, protection, and rights
- Equality and family friendly laws; and
- Industrial relations and trade unions

The audience for the webinar series was HR professionals with almost 400 people signing up to each one. We recorded all three session and those recordings are available in case you couldn’t join and you’d like to catch up with what you missed. 

Given the polls at the time were indicating that Labour would win a big majority we put the emphasis on Labour’s Manifesto. So, taking the first subject on the list, what about their plans on changing worker status and improving protection for workers? Our Head of Client Training Trish Embley hosted the webinars and earlier she joined my by video-link to discuss it: 

Trish Embley: “There were two standout points really in the worker status and protection session. The first one is what Labour described as this move towards single status between worker and employee. So just to recap, unlike our European neighbours, in the UK, we have sort of three levels of people who can work for an employer. There’s employees, and obviously, they get the full range of employment protection, the right to a redundancy payment, right to maternity leave and pay, and parental and family friendly rights. Then we have, at the other end of the poll, the genuinely self-employed, in business on their own account, not much in terms of any employment protection from the person they're working for. Then we've got this lovely middle category of worker, this flexible resource that, as we saw with things like the Uber workers case, they get the right to holiday pay, they get the national minimum wage and, importantly, the right not to be discriminated against. Now, the proposal is that those top two categories of employee and worker would be merged so we would just have this one status of worker who would get all of the employment protections. So, it was really interesting to see how employers felt about that so we ran a poll. I was quite surprised by the result because we asked the question about workers, okay, this sounds great, they're going to get all of these protections, but what might not be such good news is that, at the moment, they are taxed as if they are self-employed, so they get their gross pay. Now, if they are going to get this employment protection, then there are tax implications in that they would need to go on the payroll and tax would be deducted from source. So we asked the question, do you think those that are currently working for you as this intermediate group of workers, will they set themselves up as self-employed in business on their own account? 41% of the audience said they thought that would happen. By contrast, 59% said, no, I don't think they will, I think they'll be very happy to jump on board and have all of the employment protection that comes with that new status.”

Joe Glavina: “The previous Conservative government talked changes to status but they put it into the ‘too difficult’ box, Trish. Presumably, Labour would have exactly the same challenges.”

Trish Embley: “I think they would, Joe. I mean, back in, I think it was 2016, the government then commissioned the Matthew Taylor Report and what every government wants to try and achieve is this balance between the needs of business to have the flexibility of resource, but not the most vulnerable workers being exploited. So, again, Labour talk about, not an outright ban, but certainly making sure that zero hours contracts aren't used in an exploitative way and that workers working unpredictable hours after 12 weeks could request a more stable, reliable working contract. But you're absolutely right, successive governments now have grappled with this idea of how we maintain a degree of flexibility for UK businesses but, at the same time, workers are not exploited and have the rights that they need.”

Joe Glavina: “You mentioned there were two key issues. I’m guessing the other one is around unfair dismissal and the two-year rule?”

Trish Embley: “It is. It is. So, Labour have made it clear that there'd be no service requirement, the right to claim unfair dismissal would be a day one right, however, they would ensure employers’ ability to operate probationary periods. Now, that's where we're really waiting to see the detail as to what that might mean in the legislation. I suppose the options would be, is there a period of time within which you're within probation and unfair dismissal rules don't apply? That, I think, seems unlikely. I think it might be more of a case of, look, there's a separate process that you have to follow and maybe, I’m guessing here, a lesser process in the first three to six months but that's where we're all waiting to see draft legislation to see how that might pan out.”

Joe Glavina: “So, what did the audience have to say about that? What were your poll results on that?”

Trish Embley: “Again, I was quite surprised. We asked the question do you think this is going to be a real burden for employers not being able to dismiss someone fairly quickly, say, like a poor performer, for the first two years? 59% said, yes but 41% answered, to say, look, already, even people haven't got two years, we do follow some sort of process and that might be because it's part of our values that we don't just hire and fire, or it might well be because a lot of the claims people see nowadays are based on discrimination laws and, of course, there's no service requirement there. So, following a process to ensure there is sufficient evidence to prove that, if somebody's dismissed, it wasn't for a discriminatory reason or because they were whistleblower. Both claims don't need two years.”

The recordings of all three of those Election Special webinars are available to listen to in full if you are interested. We’ve included links to them in the transcript of this programme. Next week we’ll review sessions 2 covering equality and family friendly laws, and session 3 on industrial relations and trade unions, so do join us again for that.

LINKS
- Link to Election Special webinars audio recordings
1 Worker status, protection, and rights: 
2 Equality and family friendly laws: 
3 Industrial relations and trade unions: