The upcoming Labour employment rights bill, Plan to Make Work Pay, is set to bring about significant changes for HR professionals, business owners, and managers. This bill, expected to be introduced on 12th October, 100 days after Labour takes office, is touted as the most substantial overhaul of employment rights in over a century. It aims to offer greater protections to workers across various industries and enhance workplace fairness.

Here’s a closer look at some of the key aspects of the bill and what it means for the HR community.

Employment Status Reform

One of the most significant proposed changes is the introduction of a simplified one-category system for employment status. Under this new system, all individuals would be classified as 'workers' for the purpose of workplace rights and protections. Currently, the employment framework categorises people as employees, workers, or self-employed, each with its own set of rights.

The rise of the gig economy has highlighted challenges in determining employment status, leading to inconsistencies in how workplace protections are applied. This reform seeks to address those challenges, creating a more streamlined approach. However, any changes in this area are expected to be subject to extensive consultation, meaning no immediate alterations are likely.

Unfair Dismissal from Day One

Under the current legislation, employees must have two years of service before they are protected from unfair dismissal. Labour’s proposal would extend this protection to start from the first day of employment. This would make it more difficult for businesses to terminate new employees without valid reasons, and companies will need to follow a more stringent review process. HR professionals must ensure that robust procedures are in place to safeguard against unfair dismissals from day one.

Parental Leave Rights from Day One

Currently, employees must have worked for an employer for at least a year before they are eligible for parental leave. Labour’s bill proposes granting this right from the first day of employment. Parents would be entitled to up to 18 weeks of unpaid leave for each child, capped at four weeks per year. HR teams should be prepared to accommodate these changes and review their current parental leave policies accordingly.

The Right to Switch Off

Another key proposal is the introduction of a ‘right to switch off.’ This would allow employees to disconnect from work outside their contracted hours without facing any penalties. With the increase in remote working, this move is designed to protect employees' work-life balance. HR departments will need to devise strategies to implement this right, ensuring compliance while maintaining operational efficiency.

Statutory Sick Pay (SSP)

Labour plans to reform statutory sick pay by scrapping the current three-day waiting period before SSP becomes payable. Instead, workers would be entitled to SSP from their first day of absence. In addition, the lower earnings threshold would be removed, allowing more workers to qualify. These changes would require HR teams to update payroll systems and communicate these reforms to their workforce.

Zero Hours Contracts

Initially, Labour proposed banning zero hours contracts, but this has since been revised. Under the new bill, zero hours contracts will still be allowed, but safeguards will be introduced to prevent exploitation. HR professionals will need to stay informed about the specific criteria that will define exploitative practices to ensure their organisation remains compliant.

Equality in the Workplace

Labour’s bill will also compel employers to create and implement plans to address pay gap inequalities, specifically for ethnic minorities, disabled employees, and gender-specific groups. This will be an important area for HR teams to monitor, as non-compliance could lead to legal and reputational repercussions.

Employment Reforms from April 2024

Several important changes are already in place from April 2024, including enhanced redundancy protections for pregnant employees and new parents, the right to request flexible working from day one, and increased flexibility in paternity leave. These reforms mark a significant step in modernising employment rights and reflect the growing emphasis on job security and equality in the workplace.

In conclusion, Labour's Plan to Make Work Pay signals sweeping changes aimed at enhancing worker protections and modernising employment law. While implementation is expected to be gradual, HR professionals should start preparing now to ensure compliance and support for their workforce through these transitions.