The general election has been called to take place on Thursday 4 July and the polls have predicted a Labour Party win.
Labour has boasted to have historically introduced the national minimum wage, the 48-hour working week, 28 days’ paid holiday, parental leave, and greater protection from unfair dismissal.
On 24 May, Labour published its Plan to Make Work Pay: Delivering a new deal for working people (“the New Deal”) which promises to make work more secure and support working people further.
Labour has stated it intends to start the legislative process within 100 days of entering government, subject to consultation and other priorities. This means it will introduce a draft Bill to be debated by the two houses. It doesn’t mean an actual employment Act will pass within 100 days.
This piece will focus on a few of Labour’s proposals to see what they will mean for employment law under a Labour government.
Zero-hours contracts and one-sided flexibility
Labour has proposed to end “one-sided flexibility” and “exploitative” contracts, and provide more security and predictability for workers.
It intends to ban oppressive zero-hours contracts and ensure everyone has the right to a contract that reflects the number of hours they regularly work, based on a 12-week reference period.
Labour intends to ensure all workers are provided with reasonable notice of change in shifts or be provided with compensation that is proportionate to the notice given for any shifts cancelled or cut short.
The New Deal states that the proposal will not prevent employers from offering fixed-term contracts (for example, seasonal work).
A lot of operators and businesses benefit from zero-hours contracts as they save labour and admin costs and provide as much flexibility to operators as they do to drivers.
The risk of abolishing some zero-hours contracts is that it will lessen flexibility on both sides, which is contradictory to Labour’s reasons of ending one-sided flexibility.
Basic day-one rights and time limits
Currently, employees require two-years’ minimum continuous service to be eligible for unfair dismissal rights. Other rights such as discrimination or wrongful dismissal are already day-one rights but the Labour Party believes day-one rights can go further to include the right not to be unfairly dismissed, the right to receive parental leave/pay and sick pay, to name a few.
The New Deal asserts that introducing day-one rights will not prevent the current five fair reasons for dismissals and the use of “fair and transparent” probationary periods can still be implemented.
Businesses will need to rethink their approach to dismissals where they are looking to let go of staff, especially as each individual will require the full and fair disciplinary process or risk claims for unfair dismissal.
Single status of worker
Currently, we have a three-tier system for employment status – employees, self-employed and “workers”.
Labour has long advocated that the current system is complex and creates uncertainty for all parties, leaving them reliant on lengthy legal processes to resolve status issues.
Labour therefore intends to create a single status of “worker” for all but the genuinely self-employed.
The New Deal suggests that this proposal will require detailed consultation prior to implementation but does not state how it will be implemented.
It will be difficult to change this area of law as employment status is currently determined by a vast amount of case law and the simplification of employment status is likely to lead to litigation.
The removal of the “workers” will also mean the loss of flexibility for those who want more freedom than employees but are not self-employed. The Labour proposal could potentially hinder flexibility for both workers and employers further.
What next?
Further self-explanatory Labour proposals include:
- new duties on large employers to produce ethnicity/disability pay gap reports;
- making flexible working a default right; and
- introducing a right to switch off.
If certain proposals affect you or your business, you should look out for upcoming consultations you can join so you can have your say on how the reforms are working/not working for you and any consequential issues which may have been overlooked.
You should start the process of identifying the status of your workforce to see what percentage may be affected by the single status worker and what costs may be involved in the changing of this including any tax implications.
This is likely to become key in the context of drivers, where we already find driver engagement arrangements subject to close scrutiny from the Traffic Commissioners with potential “good repute” and “unfair competition” issues resulting.
Operators should also ensure policies/staff handbooks are updated now so anything that is to be added at a later stage is clear.
Management should be updated on what it could mean to the way staff are managed especially in circumstances where workers may receive day-one rights.
For further advice or assistance, contact JMW Solicitors’ employment team.
Written by: Laura Hadzik (Head of Commercial Road Transport/Partner) and
Nosheen Akhtar (Trainee Solicitor) – JMW Solicitors
