With a General Election looming, it is perhaps not surprising that various voices in the business community have been turning up the volume on their views on Labour’s proposed agenda for employment law reform, dubbed by some, as a ‘full-fat’ shake-up.

We have previously explored some of Labour’s most substantive proposals in our blog post,  ’A New Deal for Working People’: what would a Labour government mean for employers?. Their wide-ranging package, which includes extending day one employment rights, awarding additional rights to workers and making significant changes to employment status, is now firmly in the sights of a number of leading business organisations. 

In February the new CBI President, Rupert Soames, called for a softening of Labour’s approach, warning against the dangers of a ‘European model of employment rights’ for business, which he argued would be ‘really good for people who are employed but really bad for people who are unemployed because companies are terrified to take them on’. Other business organisations have voiced similar concerns.  

Sir Keir Starmer, himself, has acknowledged that Labour's proposals ‘may not please everyone in the room’. It is also fair to say that not everyone in the room will agree with the TUC's view which, in describing the proposals as ‘transformative policies’, has stated that Labour's proposals would be ‘good for our economy’.

In addition to the changes outlined above, it is interesting that Labour’s package of proposals also takes into account the impact of the pandemic on working practices. With working from home now much more commonplace, surveillance technologies, such as GPS tracking, webcam monitoring and click monitoring have become increasingly popular with employers. The Information Commissioner's Office already has employee monitoring firmly in its sights and, under Labour’s proposals, an employer seeking to deploy this type of technology would first need to seek agreement to the monitoring from recognised trade unions and/or worker representatives.

In the same vein, the proposals also include a ‘right to switch off’ which would give a worker the right not to be contacted by their employer outside of working hours. How this intervention might play out would be interesting to see, particularly now hybrid working is the norm for many.  Whilst the protection of vulnerable workers is, of course, important, the ability to work outside of core hours for those who can, offers much valued flexibility – take, for example, the parent who can leave work to collect children from school because they are able to log on again later in the evening.   

Equally, Labour’s proposal to ban zero hours contracts could also have an inadvertent, adverse impact – a student working in a bar who can drop shifts at exam time or in the holidays when they return home is likely to find it a real positive to be able to work in that way. If these proposals become law, will employers be looking at a ‘one-size fits all’ or will there be an opportunity for more nuance, by way of opt-outs for example?

And the announcements keep coming.  In February, Labour announced its intention to introduce a Race Equality Act which would extend equal pay rights to black, Asian and ethnic minority employees as well as disabled employees. Mandatory ethnicity and disability pay gap reporting, akin to the gender pay gap reporting, would also be introduced. 

So, what does all this mean for employers? Potentially quite a lot (!) so it will be interesting to see the extent to which (if at all) Labour will be swayed by the pro-business lobby. Earlier this month, the Financial Times reported that the CBI is feeding back to Labour on their proposals to help them avoid the ‘unintended consequences’ of its plans to reform employment law. Alex Hall-Chen, Principal Policy Advisor for sustainability, employment and skills at the Institute of Directors, has also warned Labour against its 'cast iron commitment' to push through its proposals within the first 100 days of office, in order to give consideration and thought to the impact on both employees and employers. 

There is no doubt that Labour will want to be seen as the party for ‘working people’ but equally it has committed to ‘delivering growth’ as its central mission in its Industrial Strategy issued in September 2023. How they will look to square the two, if they do come to power, will be interesting to see. 

This article was co-authored with Shannon Willett