Preparing for Labour's Employment Law Changes - A Guide for HR Professionals and Senior Managers

As Labour proposes significant employment law reforms, HR professionals and senior managers need to be proactive in understanding and preparing for these changes.

Below is a detailed guide on the proposed changes, along with actionable steps for HR departments to ensure compliance and smooth transitions, should the changes be implemented.

Reforming Employment Law Status

Summary of Change: Labour proposes a single status of ‘worker’ to replace the current distinctions between employees, workers, and the self-employed. This new status will provide the same basic rights and protections, such as the right to bring a claim for unfair dismissal. A separate category will remain for genuinely self-employed individuals.

Actions:

1. Contract Review and Update:

   • Re-evaluate all current employment contracts and categorise employees under the new 'worker' status.

   • Update contract templates to reflect this new classification and ensure they include all necessary rights and protections.

2. Training and Communication:

   • Train HR staff and managers on the implications of the new single worker status.

   • Communicate these changes clearly to all employees, ensuring they understand their new rights and status.

3. Policy Adjustments:

   • Revise company policies to align with the new worker classification, ensuring all policies reflect the updated legal requirements.

   • Develop guidelines for managing genuinely self-employed individuals separately.

Unfair Dismissal Rights / Redundancy Pay from Day One

Summary of Change: Labour proposes granting unfair dismissal rights from the first day of employment and removing the cap on compensation for unfair dismissal claims.

Actions:

1. Review Hiring Practices:

   • Reassess hiring processes to ensure thorough vetting and onboarding practices to mitigate risks of unfair dismissal claims.

   • Implement probationary reviews and feedback mechanisms to address performance issues early.

2. Training and Documentation:

   • Train managers on the importance of documenting performance issues and disciplinary actions.

   • Update dismissal procedures to ensure they comply with the new requirements and minimise potential legal exposure.

3. Legal and Financial Planning:

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     Adjust financial planning to account for potential increases in dismissal-related costs.

      

Statutory Sick Pay from Day One

Summary of Change: Labour plans to make statutory sick pay (SSP) a day-one right for all workers, including the self-employed, eliminating the current three-day waiting period.

Actions:

1. Policy Update:

   • Revise sick leave policies to reflect the immediate eligibility for SSP.

   • Ensure payroll systems are updated to accommodate this change.

2. Employee Education:

   • Inform employees about their right to SSP from day one and how to report sickness.

   • Provide resources to encourage responsible use of sick leave.

3. Absenteeism Management:

   • Develop strategies to monitor and manage absenteeism to prevent abuse of sick leave policies.

   • Implement wellness programs to promote employee health and reduce the need for sick leave.

Banning Zero-Hours Contracts

Summary of Change: Labour will ban zero-hours contracts and require contracts with guaranteed hours after 12 weeks of regular work.

Actions:

1. Audit and Transition Planning:

   • Identify employees currently on zero-hours contracts.

   • Develop a transition plan to move these employees to contracts with guaranteed hours.

2. Communication:

   • Communicate changes to affected employees, explaining their new contract terms and guaranteed hours.

   • Provide support during the transition to ensure a smooth adjustment.

3. Policy and Recruitment Adjustments:

   • Update recruitment policies to reflect the ban on zero-hours contracts.

   • Review workforce planning to ensure adequate staffing levels without relying on zero-hours contracts.

Increasing Wages

Summary of Change: Labour plans to increase the national minimum wage to at least £10 per hour for all workers and ensure it aligns with the cost of living.

Actions:

1. Wage Review and Adjustment:

   • Conduct a comprehensive review of current wages and adjust them to meet the new minimum wage requirements.

   • Update payroll systems to implement the new wage rates.

2. Budget and Financial Planning:

   • Adjust budgets to account for increased wage costs.

   • Consider the financial impact on different employee groups, including apprentices and younger employees.

3. Employee Communication:

   • Inform employees about the wage increase and how it will be implemented.

   • Provide resources for employees to understand the changes to their pay.

Introducing a Right to ‘Switch Off’

Summary of Change: Labour proposes a right for workers to disconnect from work outside of working hours and protection from employer surveillance.

Actions:

1. Policy Development:

   • Develop and implement a right-to-disconnect policy that clearly outlines expectations for after-hours communication.

   • Ensure compliance with surveillance laws and respect for employee privacy.

2. Training and Awareness:

   • Train managers and employees on the new policy and the importance of work-life balance.

   • Communicate the benefits of the policy to employees, emphasising their right to disconnect.

3. Monitoring and Enforcement:

   • Establish mechanisms to monitor compliance with the right-to-disconnect policy.

   • Provide channels for employees to report violations and ensure they are addressed promptly.

Banning ‘Fire and Rehire’ Practices

Summary of Change: Labour plans to ban the practice of firing employees who refuse to accept new contract terms and then rehiring them under different conditions.

Actions:

1. Policy Review:

   • Review and update employment policies to ensure compliance with the ban on fire-and-rehire practices.

   • Develop alternative strategies for negotiating contract changes with employees.

2. Consultation Processes:

   • Improve information and consultation procedures to involve employees in decision-making.

   • Ensure transparent communication during any contractual changes to gain employee buy-in.

3. Training:

   • Train managers on lawful ways to implement contract changes without resorting to fire-and-rehire tactics.

   • Provide resources for effective negotiation and conflict resolution.

Tribunal Claim Time Limits

Summary of Change: Labour proposes extending the time limits for employees to bring claims to an employment tribunal, beyond the current three-month period.

Actions:

1. Policy and Procedure Review:

   • Ensure all HR documentation is in line with the new tribunal claim deadlines.

1. Training:

   • Train HR staff and managers on the extended time limits for tribunal claims.

   • Emphasise the importance of timely and effective dispute resolution within the organisation.

2. Record-Keeping:

   • Implement robust record-keeping practices to maintain documentation that may be required for extended tribunal claims.

   • Ensure accurate and thorough records of all employment decisions and disputes.

Conclusion

Labour’s proposed employment law changes will require thorough preparation and strategic planning by HR professionals and senior managers.

By understanding the implications of these changes and taking proactive steps to update policies, train staff, and communicate with employees, organisations can ensure compliance and maintain a positive workplace environment.

Stay informed and plan ahead to navigate these changes effectively and support your workforce through the transition.

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This article was first published on 8/7/24.