What does Labour's landslide victory mean for employers?

Following a decisive win in the 2024 General Election, the Labour Party is gearing up to introduce significant reforms to the UK’s business environment and employment laws.

The Labour Party has committed to implementing its 'new deal for working people' within the first 100 days of taking office. According to the party’s election manifesto, existing employment laws are "not fit for purpose," and Labour has promised to introduce new legislation to address this.

We've put this blog together to highlight key policy changes that businesses should expect from Keir Starmer’s new administration, detailing Labour's commitments.

"In his first speech outside his new home at number 10 Downing Street, the country's new Prime Minister Keir Starmer said people had voted “decisively for change” and the country could “move forward together.”

Genuine living wage

Labour is set to increase the minimum wage to a genuine living wage that reflects the actual cost of living. This policy ensures that all workers, regardless of age, receive a fair wage capable of covering their living expenses, aiming to reduce wage inequality and alleviate poverty among working families. While this increase is beneficial for employees, it could pose financial challenges for many employers who may struggle to afford the higher wage bill.

Ban on zero-hours contracts

The plan to eliminate zero-hour contracts will provide workers with secure and predictable hours. This policy aims to enhance job security and stability, addressing the precarious nature of employment in many sectors.

Ending fire and rehiring

Labour will legislate against the practice of firing and rehiring workers on less favourable terms. The introduction of a strengthened code of practice aims to protect employees from being dismissed and re-employed under worse conditions, ensuring fair treatment and greater job security.

Flexible working rights

Making flexible working the default from day one for all employees is a key policy. This approach is particularly beneficial for parents and carers, allowing them to better balance work and home responsibilities. By establishing flexible working as a standard right, the aim is to improve work-life balance for many across the UK.

Pensions

A commitment to maintaining the State Pension Triple Lock for the next five years will ensure pension increases align with the highest of price inflation, earnings growth, or 2.5%. This guarantee provides stability for pensioners, although the Conservative proposal of a Triple Lock Plus, which would adjust the personal allowance for pensioners, will not be adopted.

Employment law reforms

Labour's manifesto includes several employment law reforms that could increase litigation and costs for employers. Key changes include making unfair dismissal rights available from day one, enhancing trade union rights, and introducing new protections against discrimination and harassment. While these reforms aim to provide greater worker protections, they may present challenges for businesses, especially small enterprises.

Support for small businesses

Plans to support small businesses have been outlined through reforms to business rates, addressing late payments, and removing barriers for small business exporters. These measures aim to foster a more favourable environment for small businesses to thrive and grow.

Trade unions

Labour will update trade union legislation to strengthen collective bargaining rights and improve industrial relations. This includes making it easier for unions to be recognised and to take strike action, as well as requiring employers to inform workers of their right to join a union. These changes are expected to increase union activity and influence in workplaces.

Mental health and employee wellbeing

A greater emphasis will be placed on supporting the mental health and wellbeing of workers. This will involve work capability assessments to assist people with disabilities in returning to work. Employers should consider having a document template library for these assessments and investing in employee assistance programs to support mental health initiatives and comply with potential new regulations.

Stay tuned for further updates as Labour’s new policies begin to take shape and impact the UK business landscape.

How Giant Group can support businesses through Labour’s new proposed policies

As Labour introduces significant employment law reforms, Giant Group is here to help businesses stay compliant and thrive. We offer comprehensive compliance reviews, support for fair worker treatment, and specialised services for small recruitment businesses, including invoice finance and administrative assistance.

In addition to compliance support, mental health awareness is at the forefront of our minds. We offer 24/7 access to an employee assistance program, completely confidential whenever our contractors need it

Contact us today to ensure your business is ready to adapt to these new proposed policies and create a compliant, efficient, and fair workplace.