In May, the Labour Party announced their ‘New Deal for Working People.’ Now, following 14 years of Conservative leadership, their electoral win is reportedly set to action “the biggest upgrade to workers’ rights in a generation.” If enacted within the given timeframe of 100 days, these updates to employment legislation may require significant adaptation by businesses across the UK.
In his victory speech, the new Prime Minister, Sir Keir Starmer stated that change would begin moving immediately. Therefore, while these proposals can be subject to change over the next few months, employers have already begun to prepare by seeking HR expertise to support them during this transitional period.
We’ll explore some of these proposed changes to employment legislation and what they could mean for businesses, providing recruitment insight on how this will increase the demand for HR professionals across the UK.
What do Labour’s employment changes mean for businesses?
Updates to worker’s rights
Labour proposed several changes to workers rights, with intentions to strengthen security and predictability. We’ve summarised some key features below.
- Day one rights
Making flexible working the default from day one of employment for all workers, except where it is not feasible. Employees will also have the right to bring a claim of unfair dismissal from day one, rather than the current two-year qualifying period.
The plans will not prevent cases of fair dismissal, including for reasons of capability, conduct or redundancy.
- Unions
In response to strikes throughout 2022 and 2023, Labour plans to update trade union legislation, stating they will remove “unnecessary restrictions” and ensure relations “are based around good faith negotiation and bargaining”.
- Zero hour contracts
“Banning exploitative zero hours contracts”, with all staff having the right to a contract that reflects the number of hours they regularly work. This would be based on a 12-week reference period.
- Fire and rehire
Labour also stated their commitment to ending ‘fire and rehire’ practices, often used as a way for employers to change workers’ terms and conditions, such as salary, hours and overtime pay.
What could this mean for businesses?
Sharing insight for other businesses, our People Operations Manager, Jaimee Bishop commented: “The Labour Party’s return to government has substantial implications for businesses, as their policies and approach to employee rights differ from those of the Conservative Party. It’s unclear at the moment which laws will (and won’t) apply.
With the 100-day transition period underway, I’m using this time to thoroughly immerse myself in these potential new changes to ensure that we continue to favourably position both ourselves and our customers.”
Pay and the National Living Wage
In the ‘New Deal’, Labour highlighted the creation of the National Minimum Wage and stated its positive impact for working people, including narrowing the gender pay gap and reducing age-related pay inequality.
In February, the Living Wage Foundation reported that the National Living Wage had not reflected rises in inflation and the ensuing cost of living crisis. Through their calculations, they found 1 in 8 UK jobs (around 3.7 million) paid a rate below their unofficial ‘real Living Wage’, which factored for inflation. In May, Labour proposed that, for the first time, the National Living Wage could take the cost of living into account.
What could this mean for businesses?
Though this change is set to raise pay across all businesses, those in the hospitality sector may witness the biggest shift if Labour’s calculations match those of the Living Wage Foundation.
As part of their commitment to enforce the living wage, Labour shared their intentions to work with the Single Enforcement Body and HMRC to issue penalties for non-compliance. As a result, HR expertise will be in high demand as salaries need to be assessed, adjusted and continuously monitored in order to remain compliant.
The imminent demand for HR professionals
Labour’s proposed changes to legislation will affect almost every businesses’ internal policies. It is likely that employers will need to perform the following tasks:
- Where relevant, raising pay to align with the new Living Wage
- The creation and distribution of new employment contracts
- Educating teams about their updated rights
- Making adjustments for flexible working
Despite the predicted level of work involved, the time frame of 100 days is relatively short. For this reason, business leaders may look to act in a timely manner, whilst ensuring everything is done correctly. Consequently, hiring demand for HR professionals is highly likely to increase in the coming months, as they possess the relevant expertise.
As commented by our UK Talent & People Director, and HR recruiter, Becky Downes: “It is likely that Labour’s proposed changes to employment legislation will increase HR recruitment needs. Some businesses will need to hire new employees to meet the requirements of the new legislation; such as health and safety officers, compliance managers or diversity officers.
HR will also play a crucial role in finding and onboarding these employees. There will no doubt be an increased demand for these skill sets, so it is an imperative time for those businesses to begin their workforce planning now, to ensure that they can secure the best talent in the market.”
This transitional period may also influence an increase in temporary and interim hiring, with employers seeking the knowledge of fractional HR Directors and interim HR professionals. Bringing years of specialist experience, these temporary hires can implement new strategies and processes to help businesses remain compliant as laws are updated.To learn more about temporary hires, read our short guide: The top 5 benefits of hiring a temporary worker.
How Distinct can meet rising HR recruitment needs
The UK job market is constantly evolving, and as a result, the human resources sector rarely stands still. This is something we’ve observed over many years of recruiting in the industry and liaising with our extensive network. Labour’s new manifesto looks to set more of this evolution in motion, inciting a high demand for HR talent to join businesses across the UK.
We are well placed to support businesses of all sizes throughout this period of change, by matching them with exceptional HR professionals. Our recruitment service supports HR generalists, through to specialists in learning and development, reward, information systems and talent acquisition. To discuss upcoming changes to employment law and your hiring needs, contact us today.
