Labour Party Reforms: unfair dismissal to become a day one right and workers to obtain full employment rights

The Labour Party has announced that, should it win the next general election in 2024, Britain can expect a significant reform to employment law. In her recent speech to TUC Congress, Angela Rayner stated that within the first 100 days of entering office Labour will bring forward an Employment Rights Bill to legislate a “New Deal for Working People”.

Within the speech and Green Paper, extensive reforms are being proposed including:

• the creation of a single status of “worker” – under UK employment law there are currently three classification of individuals: “employees”, “workers” or “self-employed”. Determining which category an individual falls into is not straightforward and there has been much case law on the matter. The new status of “worker” would cover everyone who works (including anyone who would have been an “employee” before),  except for the genuinely self-employed. This would lead to individuals who would previously have been “workers” gaining much broader employment rights, including the right not to be unfairly dismissed;

• ending the qualifying period for certain employment rights – currently workers must have two years’ service to bring certain claims such as unfair dismissal. Labour wants to make certain key rights -including unfair dismissal, sick pay and parental leave – available to workers from day one;

• extending the time period to bring Employment Tribunal claims – this is currently three months for most claims, but Labour plans to extend it (albeit it has not said how far);

• outlawing “fire and rehire” programmes;.

• a ban on zero-hour contracts; and

• removing caps which limit the amount of compensation workers can receive for claims – it is not yet clear what caps are being referred to here so further guidance is awaited.

Labour believes that implementing these changes will lead to fairer working conditions which, in turn, will improve productivity, economic opportunity, health and wellbeing. While the details have not yet been finalised, if implemented, the New Deal for Working People could mean the most significant reform to employment law in decades.

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