Publish date

29 September 2023

Labour’s proposed ‘New Deal for Working People’ and what this could mean for Employers.

Ahead of the 2024 UK general election, the Labour Party has proposed radical reforms to the employment landscape, comprised of a ‘New Deal for Working People’. This seeks to end the supposed cycle of “self-defeating low wage, low investment and low productivity”, addressing concerns regarding the rising cost of living and strengthening protections afforded to workers.

In a recent speech at the Trade Union Conference, Angela Rayner, Deputy Leader for the Labour Party promised that Labour will build ‘an economy that works for working people’ with a New Deal for Working People.

What are some notable measures that Labour’s New Deal includes?

  1. Stamping out the blacklisting of union workers, including empowering the Employment Tribunal to destroy blacklists
  2. Closing legal loopholes that allow employers to delegate specific work to third party contractors
  3. The introduction of a regulated legal framework, giving trade unions access to workplaces, enabling trade unions to meet, represent and recruit organise members
  4. Boosting collective bargaining, starting with a Fair Pay Agreement in adult social care
  5. Ending qualifying periods for basic employment rights
  6. A ban on unpaid internships
  7. A ban on zero hour contracts
  8. An end to fire and re hire
  9. Strengthening sick pay, to make this available to all workers, including those who are self-employed
  10. Paid travel and commuting time where employers require workers to work across multiple sites.

It is evident that a Labour Government will seek to strengthen the position of trade unions in the wider employment landscape and focus on developing family-friendly working practices. It proposes to repeal various anti-trade union laws in its first 100 days. Labour promises to address the concern of employers in response to the proposed reforms, encouraging open discussion and collaboration between state, trade union and the private sector.

What concerns are there?

Some have expressed concerns surrounding the watering down and enforceability of some of the key measures compared to previous announcement.  This includes the proposal for a single status of “worker” and the plan for numerous rights to become “day one” rights.  The Party now states that it would not prevent “probationary periods with fair and transparent rules”. The proposal to “create a single status of ‘worker’ for all but the genuinely self-employed”, acting to address the misclassification of gig economy workers and sub-contractors has been reversed. Instead, Labour commits to a consultation being held to “simplify” the workers’ rights framework under current employment law. The process by which this consultation will be conducted remains undisclosed. It has been highlighted by some that the proposed ban on zero-hour contracts for instance may only apply to “employees” under this revised approach, leaving employers free to engage “workers” on precarious terms.

Although the impact of such changes is often reported to be sudden, it is unlikely that any of these major changes will come into effect within the first 100 days. The Employment Rights Bill may be introduced within the first 100 days, but it is likely that much of the detail will be fleshed out in the months following this period, using implementing regulations and amendments.

The potential for the ‘New Deal for Workers’ should not be underestimated however, these reforms would mark the most transformative development in UK employment law in decades.

Employers with business and employment models that are structured surrounding zero­-hour contracts, unpaid internships or unpaid work and requiring workers to work across sites as various locations for instance may be presented with the task of updating their employment practices if the ‘New Deal for Workers’ comes into force. This may include actions such as updating contracts and terms of employment, policies and restructuring workforces.

Please do not hesitate to contact one of our highly experienced employment team if you wish to discuss any of the above issues and the implications this may have on your business.

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