A DEAL OR NO DEAL?
On 24 May 2024, Labour published its updated ‘New Deal for Working People’ to mixed reception. Even the Unions were split: whilst UNISON welcomed the proposals, Unite described it as having “more holes than Swiss cheese”.
So, what’s in the proposed deal? Well, in brief, it includes:
A commitment to more ‘basic individual rights’ applying from Day one of employment. These include rights to sick pay, parental leave and unfair dismissal protection (although, in the case of the latter, there is mention of probationary periods, which may suggest that there will be a lower level of protection available to new starters). The change in unfair dismissal qualifying periods will certainly take some adjusting to; whilst it may seem inevitable that it will result in increased claims, we’re not convinced that this will necessarily be the case, because there are already plenty of claims from claimants with less than 2 years’ service via the discrimination route. However, it will certainly complicate matters as employers will need to ensure that they follow a fair procedure when dismissing those with under 2 years’ service.
Reducing the current three tiers of employment status (employee/worker/self-employed) down to two. Essentially, this would mean merging employees and workers into one category with the same set of rights applying to both. The ramifications of this for the gig economy sector are enormous, as well as for those who supply/engage temporary workers. Perversely, it creates even greater incentive on companies who require a flexible workforce to engage the genuinely self-employed, thereby potentially depriving vulnerable workers of the rights that Uber drivers and others have fought so hard to win. However, it should be noted that the New Deal also proposes that the definition of self-employed and worker will be redrawn, which may, in turn, limit the scope for engaging genuinely self-employed contractors. It is to be hoped that clearer boundaries may at least result in less litigation in this hotly disputed area.
Ending the practice of ‘fire and rehire’ as a lawful means to change an employee’s contractual terms. This will be problematic for employers, but at least the proposals include a carve out to allow fire and rehire where the business has to restructure to remain viable. It remains to be seen whether an incoming Labour government would pull the current government’s Code of Practice on dismissal and re-engagement which is due to come into force on 18 July.
The introduction of a new “right to switch off”, giving workers the right to disconnect from work outside working hours and not to be contacted by their employer. Whilst this may be a headline grabbing soundbite, it’s unlikely to be as dramatic as it may at first appear, because it simply requires workers and their employers to enter into constructive discussions and introduce workplace policies or new contractual terms which benefit both parties (it appearing to be accepted that there may be legitimate reasons for employers to contact their employees outside work hours on occasion).
The introduction of mandatory ethnicity and disability pay gap reporting for those employing over 250 workers (mirroring gender pay gap reporting). Whilst businesses have now come to terms with gender pay gap reporting and the burden of completing the reports appears to be relatively light, ethnicity and disability reporting have the potential to be much more complicated – it is certainly not binary in the way that gender reporting is.
More power to the unions. Much of the work done by the Conservatives to restrict collectivism (such as minimum service levels, changes to balloting and strike procedures) will be undone. At the same time, there will be greater emphasis placed on collective bargaining and employers will be under a duty to inform employees of their right to join a trade union (indeed, the statement of particulars must include this statement). In addition, the statutory recognition process will be simplified. As a result, we predict that many employment lawyers who have only practised under a Conservative government are going to have to acquire new skills quickly to be able to advise on trade union matters.
We make no comment on whether the proposed new deal is good or bad for business (or employees) as that is really a political judgment and our readers will be able to make their own call. What we can say with some certainty, however, is that if the New Deal gets the green light, there will be busy times ahead for employment lawyers.