Labour's first 100 days: What HR wants from employment law

Labour has pledged to ban zero-hours contracts, end fire and rehire, strengthen trade unions and raise minimum wage

The Labour Party has pledged to introduce its 'new deal for working people' within its first 100 days in government. The party’s election manifesto stated that current employment law was “not fit for purpose” before promising that Labour would introduce new legislation.

This included a ban on zero-hours contracts, an end to fire-and-rehire tactics, strengthened trade unions, raising the minimum wage and statutory sick pay eligibility moving from the fourth day of sickness to the first.

Ben Smith, senior associate at law firm GQ Littler, believes that employers want clarification on some of those election pledges.

He told HR magazine: “Reforms that employers are likely to want prioritised by Labour are: clarification of day-one unfair dismissal, including how probation periods will be restricted and what 'fair and transparent rules and processes' require for a fair dismissal during probation.

“This is a significant change to the law and employers will want to maximise the amount of time they have to prepare.

“[Employers would also want Labour to prioritise] reforms to the Low Pay Commission to make the minimum wage a 'genuine living wage', to allow employers as much time as possible to plan for increased costs.”

Read more: How is holiday pay changing?

Smith added the government should also clarify holiday pay rules.

“While not in Labour’s manifesto, employers would no doubt welcome clarification of the complex holiday pay rules,” he continued. 

“Recent reforms by the last government created new areas of uncertainty, so simplification could solve a big headache for employers.”

In April, the Conservative government introduced an accrual method for holiday pay, which means that holiday entitlement is now calculated as 12.07% of actual hours worked in a pay period, as well as rolled-up holiday pay for irregular-hours and part-year workers and carried over leave from sickness or family leave.

Amid changes to employment law, the new Labour government should prioritise providing stability for employers, Robert Forsyth, employment lawyer and partner at law firm Michelmores, told HR magazine.

“In its first 100 days, the new government should prioritise providing clarity, stability and direction, and addressing key concerns of employers," he said.

“Clear plans and timelines are necessary regarding the pledged ban on zero-hours contracts, to help employers prepare.

“Employers are also struggling with the administrative burden and cost of the IR35 and off-payroll working rules. Clear details on the promise to create a single status of 'worker' for everyone and a definition of the 'genuinely self-employed' are required."

Forsyth also noted that the government should provide clear details on whether it will provide compensation support for employers amid changes to unfair dismissal law: "Employers want a low compensation cap on certain claims, especially with the anticipated increase in unfair dismissal claims from day one of employment."

The Labour government should ensure that it consults business and trade unions as it undertakes its new deal, commented head of public policy at the CIPD, Ben Willmott.

Read more: IR35 offset ignites confidence to hire contractors, says HR

Speaking to HR magazine, he said: “One of the government’s first priorities will be to take forward its new deal to introduce day-one employment rights and other changes to employment law. 

“It will be crucial that the government follows through on its pledge to govern in partnership with business and trade unions, and that it consults thoroughly on its plans. 

“The ambition to raise employment standards is of course a positive one but will only be achieved if the government is in genuine listening mode and is prepared to refine its plans and compromise where necessary.”

The government should also ensure that the changes do not come with negative consequences for employees, he added.

Willmott continued: “It’s crucial that any new legislation or policy changes achieve their intended goals and don’t result in unintended consequences. 

“For example, it will be important that any proposed changes to rules on unfair dismissal or how probationary periods operate don’t discourage employers from taking on permanent staff, or prompt them to make early decisions to dismiss new staff that take longer to get up to speed.”