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Labour’s plan to make work pay: key issues for HR and businesses

The Labour Party’s plan to make work pay, if implemented, would bring significant changes to UK employment law, affecting HR and businesses substantially. Here are the key proposals and their potential impacts:

Trade Unions and Collective Consultation

Key Proposals:

  • Repeal the Minimum Service (Strikes) Act.
  • Repeal the Employment Agencies and Employment Business (Amendment) Regulations.
  • Reverse the changes made under the Trade Union Act 2016.
  • Allow electronic balloting for union members.
  • Simplify union recognition processes.
  • Enhance rights and protections for trade unions and their representatives.
  • New duty for employers to inform employees of their right to join a union.

Impact:

  • HR will need to navigate a more union-friendly environment with increased union activities.
  • Employers may face more strikes and industrial actions due to eased restrictions.
  • Greater emphasis on employee rights to unionize will require comprehensive communication strategies.

New Day One Rights

Key Proposals:

  • Introduce day one rights for unfair dismissal, parental leave, and sick pay, with probationary periods regulated to prevent abuse.

Impact:

  • HR policies will need updating to accommodate new rights from the first day of employment.
  • Clear and fair probationary period policies must be established to ensure compliance.

Pay and Statutory Sick Pay (SSP)

Key Proposals:

  • Establish a “genuine living wage” considering the cost of living.
  • Remove age bands for hourly rates.
  • Ensure travel time between sites is paid.
  • Strengthen SSP by removing the lower earnings limit and waiting days.

Impact:

  • Increased payroll costs due to higher minimum wage rates and expanded SSP eligibility.
  • Administrative adjustments to ensure compliance with new pay structures.

Flexible Working and Family Friendly Rights

Key Proposals:

  • Make flexible working the default position.
  • Protect pregnant women and recent mothers from dismissal.
  • Consider paid carer’s leave and expand bereavement leave.

Impact:

  • Businesses will need to accommodate more flexible working arrangements, possibly requiring adjustments to operational workflows.
  • Enhanced protections for pregnant employees will necessitate careful HR planning and policy development.

Equality

Key Proposals:

  • Mandate gender pay gap action plans and reports on ethnicity and disability pay gaps.
  • Require menopause action plans.
  • Enforce socioeconomic duty compliance.
  • Implement a regulatory unit for equal pay.

Impact:

  • Increased reporting and compliance obligations related to pay equity and diversity.
  • HR departments will need to develop and implement detailed action plans and reporting mechanisms.

Zero Hours Contracts

Key Proposals:

  • Ban “exploitative” zero hours contracts.
  • Allow workers to have contracts reflecting their regular hours.

Impact:

  • HR will need to transition from zero hours contracts to more stable employment arrangements, potentially increasing administrative and payroll costs.

Fire and Rehire

Key Proposals:

  • Ban fire and rehire practices, mandating proper processes for introducing changes.

Impact:

  • Businesses will need to establish robust dialogue and consultation processes to manage employment terms changes, reducing flexibility in handling economic downturns.

Worker Status

Key Proposals:

  • Move towards a single worker status for employment law purposes.
  • Provide clear information on employment status and rights.

Impact:

  • HR will need to reassess employment contracts and worker classifications, ensuring alignment with the new legal framework.
  • Simplified worker status could lead to increased rights and benefits for many workers.

Right to Switch Off

Key Proposals:

  • Introduce a right for workers to disconnect from work out of hours.

Impact:

  • Businesses will need to establish and enforce policies that respect employees’ right to disconnect, potentially affecting work culture and expectations.

New Enforcement Body

Key Proposals:

  • Create a single enforcement body with inspection and civil proceeding powers.

Impact:

  • Increased oversight and potential legal actions will require businesses to maintain strict compliance with employment laws and regulations.

Other Changes

Key Proposals:

  • Change the trigger point for collective redundancy.
  • Strengthen whistle-blowing protections.
  • Ban unpaid internships unless part of educational programs.
  • Regulate workplace surveillance technology.
  • Extend employment tribunal claim time limits.
  • Address extreme workplace temperatures.
  • Prevent harassment by third parties.

Impact:

  • HR policies and practices will need to adapt to a wide range of new regulations and protections, requiring ongoing review and updates.

Conclusion

Labour’s comprehensive plan, if enacted, will necessitate substantial adjustments in HR and business practices. Proactive planning, thorough policy reviews, and robust compliance mechanisms will be essential for businesses to navigate the proposed changes successfully.