Following its emphatic victory in the UK general election, the Labour Party returned to power after 14 years, promising “the biggest upgrade to workers’ rights in a generation” which experts say will represent a ‘seismic shift’ for workers and businesses.

In his state opening of parliament speech last week, King Charles III confirmed that the Labour government will legislate to introduce a new deal for working people to “ban exploitative practices and enhance employment rights” through a new employment rights bill, which the government pledged would be “mission led” and “based upon the principles of security, fairness and opportunity for all”.

The headline announcements include:

1. Fair pay and Equality at work

Labour is committed to make sure the minimum wage is a real living wage that people can live on.  To achieve this, they plan to change the Low Pay Commission’s remit so that alongside median wages and economic conditions, the minimum wage will for the first time reflect the need for pay to take into account the cost of living. On the equality front, they will focus on tackling the gender pay gap and introduce a draft Equality (Race and Disability) Bill to enshrine full right to equal pay in law.

2. Eliminating ‘Fire and re-Hire’ practices

‘Fire and rehire’ is the practice of an employer making an employee redundant and then re-engaging them on reduced terms and conditions. Labour plans to reform the law to provide effective remedies against abuse and replace the inadequate statutory code brought in by the Government, with a strengthened code of practice.

3. Basic individual rights from Day One for all workers

The new employment rights will allow more flexibility and security for workers to change jobs ending the current arbitrary system that leaves workers waiting up to two years to access basic rights of protection against unfair dismissal, parental leave and sick pay. Thus ending ‘one sided’ flexibility to ensure all jobs in particular remote jobs provide a baseline level of security and predictability.

4. Support self-employment

Labour plans to strengthen rights and protections to help self-employed workers thrive in good quality self-employment, including the right to a written contract, which for example would benefit freelancers, action to tackle late payments, and by extending health and safety and blacklisting protections to self-employed workers.

5. Right to switch off

Healthier working practices result in a more productive and motivated workforce. Labour aims at promoting a positive work-life balance for all workers by introducing the ‘right to switch off’, so working from home does not become homes turning into 24/7 offices. Such models are already in place in Ireland or Belgium, giving workers and employers the opportunity to have constructive conversations and work together on bespoke workplace policies or contractual terms that benefit both parties.

6. Impact of AI and Technology

The new Labour government will work with workers and their trade unions, employers and experts to examine what AI and new technologies mean for work, jobs and skills, and how to promote best practice in safeguarding against the invasion of privacy through surveillance technology, spyware and discriminatory algorithmic decision making.

7. Skills England

Jobs, work and skillsets are undergoing unprecedented transformation. The reforms include the establishment of ‘Skills England’ to help reverse the decline in apprenticeships for young people and make it easier for employers to use their levy funds to upskill their existing workforce. This new entity would provide a “further boost” to business skills investment and “bring together the key players needed to ensure that reform of the levy is a success, and training and development is more aligned with business and learner needs”.

8. Enforcement and compliance to labour laws

In order to enhance the UK’s current labour enforcement system, the new legislation will also establish a Single Enforcement Body, with strong powers to inspect workplaces and take action against exploitation, e.g. discriminatory practices against migrant workers, who are vulnerable to some unscrupulous employers. The reforms will also aim at ensuring that Employment Tribunals are adequately equipped to provide quicker and more effective resolutions.

Changes welcomed, but a collaborative approach is needed

Some businesses have already expressed concerns with regards to the speed of implementation and whether such important changes can be swiftly implemented with the right level of accuracy and efficiency, especially smaller businesses who do not enjoy the same breadth and depth of resources as larger corporations.

Given the “far reaching” impact of the anticipated changes, most HR and legal professionals are calling for thorough consultation with employers, and potentially delayed implementation and compromise in certain areas. Rushing reforms to the labour market will do more harm to workers than good.

Adopting these changes will necessitate the distribution of new employment contracts and revisions to HR policies and procedures to employees, as well as training for managers on how to function in practice. The role of HR will be more important than ever in helping the business to navigate employee rights and reduce the risk of misinterpretation and getting things wrong.

For example, eliminating the two-year qualifying service threshold for filing an ordinary unfair dismissal claim will have the greatest impact on businesses and likely to result in a rise in employment tribunal claims. According to Caspar Glyn KC, chair of the UK Employment Lawyers’ Association, there are more than 400,000 employment tribunal cases waiting to be tried since 2020. The system is already overstretched. Can it cope with any additional pressure?

Labour have been saying that their unique plan is both ‘pro-business’ and pro-worker’. Time will tell us how much will become reality. Ultimately, everybody is hoping for a positive impact on workplace practices and employment opportunities for millions of people.