What Does The Historic Election Result Mean For Your Business?

This year has been the year of political changes, and we’re only seven months in. No matter where you’re based, it’s likely the changing political landscape will impact your business. In Northern Ireland we saw the return of the Assembly and changes to European legislation are bound to continue to impact policies and processes across the Republic of Ireland. Following the general election and the appointment of a new Labour Government, we can expect upcoming changes in employment law. A “New Deal for Working People” was a key element of Labour’s campaign, committed to giving voices to workers, improving their terms and conditions, and ensuring protections at work.

Labour has pledged to implement this new deal within the first 100 days of being in power, setting a deadline of October. However, the comprehensive details of the plan have not been released yet, and further development is needed over the coming months. We view this as an evolving situation and believe it is unlikely the entire plan will be fully operational within this ambitious timeline due to the need for further clarity and consultation on procedural requirements. Within the new deal, Labour outlined significant changes to be implemented and we have set out a brief summary of some of these below. However, it’s important to remember that it would be premature to make structural changes to your organisation as the evolving situation is exactly that, evolving. With no certainty in this area, our advice is for everyone to keep calm, don’t panic but keep yourself appraised of the situation. That’s why we’ve pulled together some key highlights of what’s been shared so far.

Day one rights – what does this mean?

Employees will have increased rights from day one, eliminating qualifying periods for unfair dismissal, flexible working, sick pay, and parental leave.

Currently, there is a three-day waiting period before employees are entitled to statutory sick pay, but the Government plans to make this a day-one right, which could be implemented quickly given that similar measures were temporarily introduced during the pandemic.

Although no more qualifying periods for unfair dismissal is proposed, we do not see this being an easy thing to implement quickly and Government will need further clarity, and consultation on the procedural requirements before it can be brought into force. If implemented, it is important to note that this will not prevent fair dismissal, organisations will still be able to operate probationary periods and the aim of this change will be to ensure that new employees are not dismissed without reason and will help to drive standards within workplaces.

Single Status of ‘Worker’

Labour has proposed to move towards a single status of ‘worker’ instead of employees, workers and self-employed having different levels of employment rights and protection. This will mean that all workers will have equal employment rights and we believe this could be difficult to implement due to the complexity of determining the employment rights each category of worker currently has, and therefore, we would expect this to fall outside of the 100 days that Labour has committed to.

Living Wage

The Labour Government proposes to make the National Minimum Wage (NMW) reflect the real Living Wage and will remove the age bandings attached to NMW which they believe to be discriminatory to ensure every worker is entitled to the same living wage. If implemented, this could mean organisations being required to give pay rises to their workers. It is likely that this will not be put into action until 2025 as NMW rates are annually reviewed and typically released in April each year. Any proposed changes or new implementations we would expect to align with this timeline.

Zero-Hour Contracts and ‘Fire-and-Rehire’

Labour proposes to make significant changes to the zero-hour contracts, they aim to ban exploitative zero-hour contracts to ensure all jobs have a baseline level of security and predictability and that workers have the right to a contract that properly reflects their regular hours of work. It is important to know that this change will not prevent organisations from offering fixed-term contracts which are important in industries that offer seasonal work.

Labour has proposed to end ‘fire-and-rehire’ so that workers can properly negotiate their terms and conditions with their employers.

Disability & Ethnic Pay Gap Reporting

It will become mandatory to report on disability and ethnicity pay gaps to tackle workplace inequalities. Many larger organisations are already reporting on this, and it will only be mandatory for organisations of 250 employees or more, suggesting that this change may not significantly impact workplaces.

Even though the reporting requirement for disability and ethnicity pay gaps is mandatory for organisations with 250 employees or more, smaller organisations should also be vigilant and ensure they are compliant. By adhering to these standards, even smaller organisations can contribute to combating discrimination in the workplace and promoting equality. This proactive approach not only aligns with legal obligations but also fosters an inclusive and fair work environment for all employees, regardless of the organisation’s size.

Trade Unions

Labour has proposed to strengthen trade union rights. They plan to implement new rights designed to empower unions in their efforts to recruit, organise, and secure improved conditions for their members. These measures include streamlining the process for unions to gain official recognition, ensuring a fair right of entry for union activities within workplaces, and enhancing protections for union representatives and officials.

Given the significant impact of these changes, trade unions will naturally want to be actively involved in the development and implementation of these changes. Their participation is crucial to ensure that the measures are effective and truly beneficial for their members. Therefore, this collaborative process is likely to extend the timeline for these changes to come into action, as it will require thorough discussions, negotiations, and potential adjustments based on union feedback.

How can AAB People Help?

As we adapt to a new Labour Government, it is crucial for us to stay updated on the latest developments and understand their implications for our clients. We are dedicated to ensuring our clients remain well-informed and supported during these transitions in employment law. Our commitment is to provide guidance and assistance in navigating any forthcoming changes, ensuring that our clients are equipped to manage them effectively.

In the meantime if you have any questions or need further information, please don’t hesitate to get in touch with James Richardson, or your usual AAB People contact.