A new deal for workers? Labour's plan risks mass layoffs

Monday, September 16, 2024 06:00
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Friday, September 13, 2024 3:25 p.m.

A new deal for workers? Labour’s plan risks mass layoffs

Labour’s new workers’ rights plan promises to put employees first, but it risks backfiring on them, writes employment law expert Dan Pollard in today’s issue of Notebook

How Labour’s deal with workers could backfire

Labour’s pledge to ensure “rights from day one for all workers” will end the requirement for employees to have two years’ service to be eligible for unfair dismissal. This qualifying period was extended from one to two years by the coalition government in 2012.

After two years of service, the employer must have a valid reason to dismiss an employee. Acceptable reasons include redundancy, performance issues and ill health. Employers must also follow procedures that seem simple on paper but can be cumbersome in practice and require significant management time.

It is expected that the changes will be set out in a new workers’ rights bill and that employers will be able to include a trial period, although it is not yet clear how this will work.

The big unanswered question is whether all workers will immediately benefit from these rights on day one, or whether they will only apply to those hired after the Workers’ Rights Act goes into effect. Most employers and lawyers assume that these rights will apply immediately to all employees, meaning that about a third of the workforce will gain these rights overnight, likely later this year.

We have already seen cases where employees have been dismissed without any procedure, almost certainly to ensure that they do not acquire rights if the law changes, when previously there would have been discussion about an amicable departure before the dismissal.

While the government’s aim is to improve job security, the immediate impact may be that employers seek to pre-empt mass layoffs and dismiss underperforming employees before the changes come into effect in order to reduce the risk of claims. Given that employees’ only recourse in this situation is to turn to anti-discrimination and whistleblowing protections, we expect to see an increase in complex litigation in the coming months.

The four-day week?

I look forward to public holidays. A long weekend and a shorter work week are, for many, a welcome respite, a chance to relax and recharge, explore new cities or simply catch up with friends and family. The four-day work week is a bold idea, with the potential to revolutionise our time and our lives. It is more than a three-day weekend, let’s approach it with the seriousness it deserves, with a willingness to try, learn and adapt.

The rise of “employee influencers”

The idea that employees are brand ambassadors is not new. We tend to trust stories told by others more than corporate marketing. The rise of influencer marketing and social media has further reinforced this trend, with companies recognising the benefits of leveraging the growing trend of ‘employee influencers’ – real employees within the company who are brand ambassadors outside of their usual roles and functions. This is all the more reason to think carefully about decisions that impact the workforce and not just through the lens of costs and legal risks.

A hidden gem of the city

Looking for a break from the coffee chains and chaos of the city? Host Café is a hidden gem nestled within the historic walls of a London church. The majestic arches and stained glass windows make it a spectacular yet welcoming place to meet a friend, colleague or client for coffee. A perfect spot for those who enjoy an independent atmosphere and a great cup of coffee. For the digitally connected, this is a great opportunity to add a touch of historic elegance to your Microsoft Teams background!

What I listened to

A podcast that stands out as a true treasure trove of living history: “Cold War Conversations”

As a child of the 1980s, I found Cold War Conversations to be an extraordinary podcast that offers a unique perspective and unfiltered glimpse into life under the shadow of the Iron Curtain. From intimate accounts to the fraught realities of military service, the podcast paints a vivid picture of a bygone era. It’s a captivating listen for anyone interested in this pivotal period, offering lessons from the past that resonate deeply today. Sometimes chilling, often inspiring, and always fascinating, it’s a story brought to life by the voices of those who witnessed it firsthand. If you’re interested in this period of history, Cold War Conversations is a must-listen.

Dan Pollard is an employment law partner at Charles Russell Speechlys