As the new Labour government takes charge, a series of ambitious employment policies are set to reshape the UK’s labour market. For businesses across the country, these changes represent not just a shift in how we treat workers, but also a potential compliance challenge.
At McKenzie Consultancy & Legal, we are here to ensure your business adapts seamlessly to these new requirements, avoiding potential pitfalls and capitalising on the benefits of a fairer workplace. This blog has been designed to help Business Owners fully understand what steps they may need to start taking, to be ready for the key changes that are on the horizon.
Key Labour Policy Changes and What They Mean for Your Business
- Removal of National Minimum Wage Bandings
Labour intends to eliminate the existing age-related bandings in the national minimum wage, ensuring that workers of all ages receive equal pay for equal work. The National Minimum Wage Act 1998 currently governs these bandings. This change will require immediate adjustments in payroll systems and wage policies. Businesses must evaluate their current pay structures to ensure compliance, to avoid potential disputes and ensure fairness across the workforce.
- Statutory Sick Pay for All Workers
Making statutory sick pay available to all workers, regardless of their employment status or tenure, will necessitate a reassessment of sick leave policies. This change aims to ensure all employees are covered from day one and will involve updating employment contracts and possibly increasing budget allocations for employee benefits. Integrating these changes smoothly is crucial to maintaining employee morale and legal compliance.
- Parental Leave as a Day One Right
Offering parental leave from the first day of employment necessitates updates to HR protocols and employee handbooks to reflect this new entitlement. The current regulations, under the Employment Rights Act 1996 and the Shared Parental Leave Regulations 2014, provide parental leave after a certain period of employment.
Businesses must prepare to support new parents from the outset, balancing this with operational needs. This change not only promotes a family-friendly workplace but also enhances employee retention and satisfaction. Additionally, companies should be cautious of any potential claims of unfair dismissal related to employees taking parental leave, ensuring robust protections and fair practices are in place.
- Introduction of Bereavement Leave
Providing the right to bereavement leave will mean integrating compassionate leave into existing leave policies. The Employment Rights Act 1996 currently covers some aspects of leave but does not mandate specific bereavement leave. Employers need to create clear guidelines and procedures for requesting and granting bereavement leave, ensuring sensitivity and compliance with the new regulations. This support can improve employee well-being and loyalty.
- Paid Carer’s Leave
Labour plans to examine the benefits of introducing paid carer’s leave, which would allow employees to take time off to care for sick or elderly relatives without financial detriment. Although this policy is still being considered, businesses should start evaluating how such leave impacts operations and budgets. Proactively planning for this change demonstrates a commitment to employee welfare and can enhance your company’s reputation as a supportive employer.
- Flexible Working as the Default
With flexible working set to become the default from day one, except where not feasible, companies must evaluate their operational capabilities and update contracts and workplace policies accordingly. This shift requires a thorough review of job roles, business models, and employee expectations. The Flexible Working Regulations 2014 currently allow employees to request flexible working after 26 weeks. Implementing robust flexible working policies can boost productivity and job satisfaction, making your company more attractive to employees.
- Hospitality Workers’ Right to Tips
Ensuring hospitality workers receive their tips in full and have a say in distribution will require transparency in tipping policies and new administrative processes. This change aims to address issues highlighted in the Employment (Allocation of Tips) Act 2023, which was due to come into force in October 2024 (subject to being passed). Businesses in the hospitality sector must establish clear, fair, and compliant tip distribution systems. This change aims to ensure fair compensation for all staff members, potentially improving job satisfaction and customer service.
- Zero Hours Contracts
Labour’s new policies seek to reform zero hours contracts, aiming to provide greater job security and predictability for workers. The potential regulations might include minimum guaranteed hours and compensation for last-minute shift cancellations. Businesses will need to revise their contract agreements and workforce planning strategies to comply with these changes and ensure fair treatment of all employees.
- Right to Switch Off
The introduction of a “right to switch off” policy is aimed at protecting employees from being expected to work outside of their contracted hours, promoting a better work-life balance. Companies must establish clear boundaries regarding work communication after hours and update their policies to reflect this new right, ensuring employees are not penalised for disconnecting from work.
- Maternity Protection
Enhancing maternity protection will involve stricter regulations to prevent discrimination against pregnant employees and new mothers; it will be unlawful to dismiss a woman within 6 months of her return from maternity leave (with some exceptions not yet published). This includes extending maternity leave rights and protections against unfair dismissal. Businesses need to ensure compliance with these updated regulations, offering robust support systems for employees during and after pregnancy.
- Sexual Harassment Policies
Labour intends to strengthen policies around sexual harassment in the workplace, ensuring a safer environment for all employees. This involves stricter reporting and handling procedures, as well as mandatory training for all staff and Companies taking ‘all’ reasonable steps to prevent sexual harassment. Companies must review and update their current harassment policies to meet these new standards, fostering a culture of respect and safety.
- Increased Time Limits for Claims
The time limit for employees to bring forward claims, such as unfair dismissal, will be extended from 3 to 6 months. This change provides employees with more time to seek justice and requires businesses to maintain detailed records and documentation for a longer period to defend against potential claims.
Why Partner with McKenzie Consultancy & Legal?
Working through these extensive changes can be daunting, but with McKenzie Consultancy & Legal, you have a partner ready to guide you through every step. Our expert team specialises in:
- Policy Reviews: Completing assessments of your current policies, making recommendations for key changes, to ensure alignment with new legal requirements.
- HR Updates: Crafting and implementing updated HR procedures that meet the latest legislative standards.
- Compliance Assurance: Undertaking comprehensive audits and providing continuous support to maintain compliance and avoid potential legal issues.
With a commitment to excellence and a deep understanding of employment law, McKenzie Consultancy & Legal is your go-to collaborator for staying ahead in these rapidly changing legal times.
Contact us today to schedule a consultation and ensure your business is fully prepared for Labour’s new employment policies. To find out more about all of our services head to www.mckenzie-legal.co.uk
