Labour’s ‘Plan to Make Work Pay: Delivering A New Deal for Working People’ is designed to create a fairer and more secure workplace for everyone. With promises to pass legislation within their first 100 days in office, it’s likely that we’ll see a Bill introduced to Parliament very soon.
You might be wondering how these changes could impact your business. For SMEs, staying informed and prepared is key to navigating these potential shifts in business operations and workforce strategies. Our platform is packed with tools and resources that make compliance straightforward, and our HR Advisory service means you can speak to HR experts whenever you need to.
But with big changes on the horizon, we’re breaking down these proposals and offering some insights to help you think ahead.
Day-One Right to Claim Unfair Dismissal
The Proposal: Introducing a right for employees to claim unfair dismissal from the first day of employment, moving away from the current requirement of at least two years’ service. However, employees dismissed during their probationary period would not be able to claim unfair dismissal. This protection may also extend to workers, not just employees.
SME Top Tip: This change aims to create a fairer workplace environment, but will also create more bureaucracy for employers by making it harder to take quick decisions on letting employees go. Given that it appears that individuals will not be able to claim unfair dismissal if dismissed during a probationary period, it’ll be more important than ever to have robust employment contracts in place for all staff which clearly set out that ongoing employment will be subject to successful completion of a probationary period.
The other top tip is to get smart about your hiring. If it’s going to be harder to move unsuitable employees on, you’ll want to make sure you are making the best possible choices about who you hire in the first place.
Flexible Working as Default
The Proposal: The right to request flexible working arrangements has been a day one right since 6 April 2024, so it is not entirely clear what further reforms the Government is proposing in this area. It may be that the permissible reasons for refusing a flexible working request will be narrowed to make it harder for an employer to reject a flexible working request. It’s also proposed to extend the rights for flexible working to workers and not just employees.
SME Top Tip Flexible working can boost employee satisfaction and productivity. As a business that thrives on remote work, we know a thing or two about it. However, it’s also important that employers set expectations of what is required of employees when working flexibly. For example, where employees are working remotely, a remote working policy is a great place to start. Check out this blog for the lowdown on helping your team maintain team productivity with flexible or remote schedules.
Ban on “Exploitative” Zero-Hours Contracts
The Proposal: Although the Government has said that it will eliminate “exploitative” zero-hours contracts to enhance job security, it isn’t clear how “exploitative” zero-hour contracts will be defined or whether this will be a ban on all zero-hours contracts. One proposal is that employees on zero-hours contracts who work regular hours will have a right to move to a regular contract after 12 weeks, but can opt to remain on a zero-hours contract if they wish
SME Top Tip: Promoting job security is a positive move, but it could impact businesses relying on flexible, casual work arrangements. If this applies to you, consider offering part-time or fixed-term contracts to maintain workforce flexibility. We’ll keep you updated as more details emerge, so you can adapt smoothly.
End Fire and Rehire Practices
The Proposal: Banning the practice of firing employees only to rehire them on less favourable terms, except when there is genuinely no alternative.
SME Top Tip: Understanding when you will still have a right to fire and rehire will be crucial, and our HR Advisory team is always on hand to help you navigate tricky questions like this.
If it becomes harder to dismiss and re-engage employees on reduced terms in order to save costs, businesses may need to explore other ways to manage costs effectively. Have you thought about other ways to optimise and automate your workflow? Our HR automation solutions can help streamline operations and reduce costs effectively.
Raise the Minimum Wage
The Proposal: Adjusting the minimum wage to account for the cost of living, creating a genuine living wage, and removing age bands so all adults are entitled to the same minimum wage.
SME Top Tip Our Report on the State of Workplace Wellbeing highlighted financial stress as the top concern for employees. This proposed increase in the minimum wage could significantly ease that burden, creating a more supportive work environment, but it’s not clear whether the Government has thought about how businesses will afford this. Keep an eye out for our upcoming Instapay feature, designed to further enhance financial wellbeing and help your team thrive.
Equal Pay Reporting
The Proposal: Requiring companies with 250 or more employees to publish gender, ethnicity and disability pay gaps, along with action plans to close these gaps.
SME Top Tip: While we already have gender pay gap reporting obligations, these proposals extend equal pay protection to ethnicity and disability. Ensure your payroll system includes features to track and address pay gaps – we provide tools to support equal pay reporting, promoting transparency and fairness in your business. This can help you stay compliant and foster a more inclusive workplace.
Statutory Sick Pay Reforms
The Proposal: Making statutory sick pay available from the first day of sickness and removing the lower earnings limit so that all employees and workers are eligible, even those on low wages.
SME Top Tip These changes will likely increase costs for employers, so adjustments in budgeting and forecasting will be necessary. Reducing the need for employees to take time off is more important than ever—consider implementing an Employee Assistance Programme (EAP) to support employee wellbeing and reduce absence.
Mental Health Support in the Workplace
The Proposal: Enhancing worker support, with a focus on mental health.
SME Top Tip A proactive approach to mental health is key. We offer resources to help you create a supportive workplace environment. Check out our Report on the State of Workplace Wellbeing for more on our findings.
Family-Friendly Rights
The Proposal: Protecting recent maternity leave returners from dismissal for six months after they return to work, unless a specified reason applies, and making parental leave a day one right for all workers (not just employees).
SME Top Tip: If these changes are implemented, they could impact your parental leave policies. Now is a good time to review your policies and stay informed about upcoming changes. We’ll update our template policies to reflect any legal changes, ensuring you’re always compliant.
The wrap up
These proposed changes aim to promote inclusive and fair workplaces, but will also cause challenges for businesses to comply with these new obligations. While these are not yet laws, staying informed and proactive can help ensure a smooth transition if and when they are implemented.
Question for our readers: How do you think these potential changes will affect your hiring and employment practices? Share your thoughts in the comments!
