The Labour Party’s New Deal for Working People is an agenda aimed at the creation of fairer workplaces, stronger worker rights, and addressing the inequities in pay and job security.
For some businesses, the proposals could mean significant changes in the way they manage employees, compliance requirements, and overall business strategies. For others, who already have strong HR practices, the changes will be far less, but will still need to reflected in how procedures and processes are implemented going forward.
In this blog, we’ll break down the main components of Labour’s New Deal and, whilst we still don’t understand the full details of their proposals, from what we know, we’ll set out what businesses should be doing right now to prepare for the potential shift.
Overview of Labour’s New Deal for Working People
Labour’s New Deal for Working People promises a comprehensive overhaul of UK employment law. The policy package seeks to end exploitative work practices and restore dignity and fairness to the workplace. Here’s an outline of some of the major policy changes Labour has proposed:
- Workers’ Rights from Day One
Labour’s platform seeks to extend rights to workers from the very first day of employment. This includes protections against unfair dismissal and the right to sick pay, holiday pay, and parental leave. By ensuring that workers can’t be dismissed unfairly at the start of their employment, Labour aims to offer more stability and fairness.
- Flexible Working as a Right
Labour’s proposals also recognise the importance of work-life balance and flexibility. The party has committed to making flexible working the default for all jobs, allowing employees to work flexibly unless there is a compelling business reason not to.
- Job Security and Employment Status Reforms
Labour is determined to tackle the issue of insecure work by addressing the status of gig economy workers. These workers are often classified as self-employed, denying them rights like holiday pay and sick leave. Under Labour’s plan, this will change, and gig economy workers will have access to these rights.
- Raising the Minimum Wage
Labour plans to implement a “real living wage” of at least £10 an hour for all workers, including young workers who currently receive less under minimum wage laws. This commitment reflects a broader push to ensure that everyone earns a fair wage for their work.
- Ending Zero-Hour Contracts
The New Deal would abolish zero-hour contracts, a type of precarious work arrangement that leaves employees uncertain about their hours and income. In their place, Labour wants to guarantee contracts with a minimum number of hours and greater security for workers.
What This Means for Businesses
If Labour’s New Deal becomes law, businesses in the UK will face a drastically different employment landscape. While the reforms are aimed at improving the lives of workers, they will also have the potential to increase the regulatory and financial burden on employers. The changes to employment law will require businesses to reassess their HR practices, payroll systems, and compliance mechanisms.
Here’s three things what businesses should consider and start doing right now:
- Review Contracts and Policies
One of the most immediate implications for businesses would be the need to review existing employment contracts, procedures and policies. Companies should begin to assess their workforce and consider how they will adapt to changes to workers’ rights from day one and flexible working a right – both procedurally and contractually.
- Get Ready for Flexible Working
Labour’s plan to make flexible working the default means that businesses need to think seriously about how they can incorporate remote work, flexible hours, and other arrangements into their operations. This may require investment in new technology to facilitate remote work, retraining managers to handle flexible teams, and revising policies to ensure compliance.
Flexible working can have benefits for businesses too—boosting employee morale, increasing productivity, and reducing turnover. Companies that embrace flexibility early may find themselves ahead of the curve.
- Reassess Employee Well-being and Benefits
Labour’s New Deal focuses heavily on improving the quality of life for workers. Businesses should seize this opportunity to create a more employee-centric workplace. Consider enhancing your company’s benefit offerings—whether it’s providing more generous sick leave, improving health and wellness programmes, or introducing schemes that support mental health.
Taking the initiative to improve employee well-being can help businesses not only comply with upcoming regulations but also retain top talent in a competitive market.
Conclusion: Preparing for Change
Labour’s New Deal for Working People signals a dramatic shift towards greater regulation and increased protections for workers. For businesses, this will require careful planning and adaptation to ensure they remain compliant and competitive in a new, more regulated environment. By proactively adjusting contracts, embracing flexible working and improving wellbeing, businesses can position themselves to thrive even in a significantly altered labour landscape.
Ultimately, embracing the spirit of Labour’s New Deal by focusing on fair treatment, security, and dignity for workers can yield long-term benefits for businesses—creating a more motivated, productive workforce and potentially reducing turnover and recruitment costs. While the short-term challenges may be significant, businesses that adapt early and thoughtfully can find opportunities in this changing environment.
If you need help on any of the issues in this blog, please get in touch for further assistance.
