In a rather unsurprising turn of events, we now have a new government.  Having stormed to victory with a massive majority Labour is now poised to effect the biggest shake-up in employment rights in a generation. 

If Labour is to fulfil its pledge to introduce an Employment Rights Bill within the first 100 days of parliament, it will need to hit the ground running. Summer recess is likely to be delayed to allow some progress to be made.   If Kier Starmer and Angela Rayner don’t want to risk alienating Trade Unions from the get-go, they will need to follow through on the manifesto commitments as quickly as possible. 

Labour’s philosophy

When the coalition government, led by the Conservatives came to power 14 years ago, the economy was reeling from the 2008 financial crash and in the midst of a global recession.  Unemployment was high and the government believed that in order to encourage recruitment, employers needed more flexibility.  In 2012, therefore, it took the decision to extend the qualifying period for unfair dismissal rights from one to two years’ service. 

Fast forward to 2024, with the economy choking from the effects of a global pandemic and countless international crises, Labour is planning to turn this belief fundamentally on its head.  Its philosophy instead is that stronger workers’ rights effected via the collective voice of strengthened and reformed Trade Unions, equals better productivity.  Those organisations and business leaders who embrace this philosophy, Labour believes, will ultimately have a competitive advantage and will do better than those who do not. 

What’s the plan? 

Take Labour’s plans to give all employees protection against unfair dismissal from day one of their employment, for example. Currently, workers face a lengthy, two-year wait for rights.  Contrary to the Conservative/Coalition philosophy, Labour believes that this stifles growth. Employees are less inclined to move jobs but also less engaged. Less engagement means less productivity, and low productivity affects business growth and investment and makes it more difficult to recruit.

Labour’s ‘day one rights’ proposal, coupled with the plan to introduce a single status of ‘worker’ (leaving simply the ‘worker’ and ‘self-employed’ employment statuses) to which the full suite of employment protections would apply, puts job security – aka ‘securanomics’ - firmly at the top of the agenda. 

But could there also be unintended consequences? 

Take the commitment to ban zero hours contracts, for instance.  Could this mean that more employers use fixed-term contracts as a short-term measure? 

Whilst more workers will, in theory, have employment protection against unfair dismissal (employment protection becoming a day one right for all ‘workers’), Labour has also indicated that it may introduce some flexibility to dismiss during probationary periods provided there are “fair and transparent rules” in place.  Although we do not yet know what these rules will look like, we may find (if not properly thought through) that the increased use of short-term contracts means an increase in the number of employees subject to probationary periods, with the consequent minimal protections that may apply to probationary periods as a result. Anti-avoidance measures will need to be introduced if this risk is to be minimised and the government’s vision for more secure workforce realised. 

If Labour is right, and strengthened employment rights equals a happy and contented workforce we can all, of course, expect to reap the benefits. 

However, increased rights together with the proposal to extend the limitation period for bringing employment claims from three to six months may also lead to increased litigation. 

It has been no secret that Employment Tribunals have been significantly under-resourced and over-burdened over the past few years.  The lead-in time for final hearings for some of the busier, London tribunals is now up to 18 months. 

The creation of a Single Enforcement Body to enforce some of the rights currently falling within the remit of the Employment Tribunal system, may go some way to alleviating the pressure.  However, this will take time to get up and running.  Unless the broadening of employment protections dovetails appropriately with the planned frameworks to enforce those rights, we may find the Tribunal system gets significantly worse before it gets any better. 

The devil will be in the detail

Whether Labour’s philosophy leads to tangible results in reality remains to be seen. 

Ask any employment lawyer acting mainly for employer clients and you may struggle to find one that truly believes employers have had it easy up to now. Yes, the advent of the gig economy and use of zero hours contracts have created new kinds of flexibility which, at times, have been open to abuse.  And yes, the unscrupulous use of fire and re-hire practices have, quite rightly, necessitated a review and reform of the law in this area.  Headway was already being made on some of these issues.  It is important not to lose sight of this. 

Yet, it is also important to acknowledge that many employers have also felt let down by the law. They have, at times, felt powerless to take any action against under-performing, malingering or incapable employees. 

They are expected, at times to be not only employers but also counsellors, financial advisers and support workers.  Many employers we come across (and I appreciate that these are the ones who are invested enough in their people and businesses to want to take legal advice) are happy to provide those services, and firmly believe it is part and parcel of their duty of care towards their staff.  However, there does need to be a fair balance of rights - and appropriate accountability on both sides. 

Conclusion

Whether or not Labour’s philosophy will work remains to be seen. There will be those today who feel dejected by the outcome; and those who feel emboldened by it. 

Whichever side of the line you fall, there is little doubt that we are entering a watershed moment for employment law.  Over the next 100 days or so, we will need to wait with bated breath to determine if Labour’s manifesto promise to ‘turn the page’ on our political landscape, is truly a page-turner or a complete turn off!