HR predictions: what to expect under a new government

  • Employment Law
people in suits looking at spreadsheets
Alan Price - Peninsula's Chief Operations Officer and CEO of BrightHR

Alan Price, Chief Operations Officer

(Last updated )

After overriding the Conservatives across public polls, the Labour party is the current favourite to win the next general election. And while we don’t yet know when this election will be, we're taking a look at what you could expect under a Labour government...

In their recently published pledge for workers, Labour makes promises that - if enacted - will bring big changes for HR.

In their manifesto, they vow to bring new rules around employee dismissal, a ban on certain types of staff contracts and more employment rights for you to get to grips with.

They say these changes will happen within 100 days of them coming into power. So to make sure you’re clear on what might be in store, here’s what HR could expect under a new government…

Employees to be given protection against unfair dismissal from day one

Currently, employees only have protection against ordinary unfair dismissal after two years on the job. And there are only certain claims where tribunals will overlook length of service.

Labour wants to change this rule. So, all employees have protection against unfair dismissal from day one.

If this update were to go ahead, this means changes to your existing disciplinary procedures and policies. It could also open up a floodgate of unfair dismissal claims from employees.

Maximum limit on unfair dismissal compensation to be removed

As well as giving employees day one protection, Labour also wants to uncap the amount of compensation employees can receive for unfair dismissal.

Currently, if a tribunal rules that their dismissal is unfair, employees can win a basic award of £19,290 as a maximum. On top of this, they can win a compensatory award for any loss they’ve suffered. This is a maximum of £105,707 or 52 weeks’ pay (whichever option is lower). If Labour were to remove this cap, the amount of compensation for employees would be unlimited.

These rates are set to increase even more from 6th April. You can find out the new rates below.

This only reinforces the need to follow strict disciplinary procedures consistently every time. And if you’re ever in any doubt, it’s always best to seek expert advice to limit your risk.

‘Fire and rehire’ practices to become illegal

You might choose to dismiss and rehire an employee if you want to keep employing them but under new terms.

So, you could end their contract and then immediately offer them a new one. This practice is often referred to as ‘fire and rehire’.

Currently, fire and rehire is not illegal and can be a fair process provided you take the right steps. However, Labour wants to ban the use of this practice altogether if they come into power.

If Labour did ban fire and rehiring practices, you would need to consider other options if you wanted to change your employee’s terms and conditions. And it would be all the more important to find ways of negotiating and compromising with your staff. So, you can reach an agreement that works for everyone.

To find out the current rules around fire and rehire in 2024, tap below for the quick-fire answer on Brainbox:

All employees to receive a minimum wage of at least £10 per hour

The government recently announced changes to current national minimum wage bandings. And from April, more employees will be able to climb into the highest minimum bracket, depending on their age.

Well, Labour wants to raise the minimum wage for younger employees too. So they would give all employees the right to a minimum wage of £10 an hour if their rate isn’t already over that.

To remind yourself of how national minimum wage rates are changing this April, you can find the new rates below:

Statutory sick pay to rise and be payable to everyone

Employees have a right to statutory sick pay. That’s providing they have a minimum level of earnings, they’ve done some work for you and they’re off work for at least four days in a row.

Currently, the minimum amount of sick pay you can pay employees is £109.40 a week. You can pay this for up to a maximum of 28 weeks.

Currently, some people - like the self-employed - aren’t eligible for sick pay. However, Labour wants to give everyone this statutory right.

If this was to happen, you would need to notify your payroll team of these changes. So, you can avoid the risk of underpaying staff and managing grievances over pay.

Statutory sick pay (SSP) is set to rise in April 2024. To find out the new rate, tap below:

Zero hour contracts to be banned

Currently, many employers hire staff on zero hour contracts.

Typically, this is to accommodate changes in demand. So, they don’t have to guarantee a worker a certain amount of hours and can offer work on an ad-hoc basis.

Depending on preferences, this type of working relationship can suit both the employer and worker.

Labour wants to make it unlawful to use zero hour contracts. Meaning anyone who currently uses them would need to find other types of staff contracts to meet their business needs.

This would mean ending and creating new contracts for workers. And in this scenario, seeking expert documentation support would be a good idea.

Flexible working rights to be opened up even more

Currently, flexible working is set to become a day one right for employees. However, employees do still have grounds to refuse a request for a statutory reason.

Labour want to open up the rights for flexible working even more. Under their plans, if an employee was to request flexible working, you would need to accommodate their request ‘as far as is reasonable’.

To learn more about the statutory reasons for refusing a flexible working request, tap below:

Employee’s right to disconnect outside of work to be upheld

In the UK, there’s no law to say you can’t contact your staff outside of work hours.

There’s been a big debate over the worker’s right to disconnect – with countries like France, Spain, Portugal, Belgium, and most recently Australia, now adopting a right to disconnect from work approach.

And Labour are saying that the UK could be joining them.

If Labour were to pass a law that says you can’t contact your employees outside of work hours, you would need to create a brand new policy. You would also need to review your existing contracts to make sure your communication rules are up to date.

More changes are pending…

These changes are just the tip of the iceberg for what Labour have planned should they come into power.

So, it’s important to make sure you’re prepared for the potential of new employment contracts, policies, and rights for your staff.

Once a legal update comes in, you’ll be at risk if you aren’t up to date.

We’ll be keeping you posted on any important upcoming government updates. But in the meantime, for extra support, Peninsula advisers are on hand to answer any questions.

If you’re not a client, you can still claim a free advice call. To speak to an HR professional, book your advice call today:

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