I’ve now written three posts setting out Labour’s plans for employment law set out in its document “Labour’s Plans to Make Work Pay”. I’ve looked at trade union law, individual employment rights and equality and family-related issues. Ahead of the manifesto publication tomorrow (and I’m very much assuming that we won’t see any backtracking on what Labour is proposing) I wanted to round off the series with proposals that I overlooked or which didn’t easily fit into one of those three posts, but which are still important from an employment law perspective.

So what did I miss?

Third-party harassment

In my post looking at Labour’s equality law proposals I missed its position on third-party harassment. This is where an employee is subjected to harassment at work by someone other than a fellow employee – such as a customer, client or member of the public. The current position (and this has fluctuated over the years) is that an employer is not liable for harassment of its employees carried out by third parties. The current government supported a private members bill which became the Worker Protection (Amendment of Equality Act 2010) Act 2023 which initially extended liability for third-party harassment unless the employer had taken all reasonable steps to prevent it. But following back-bench opposition the Bill was watered down in the House of Lords and that provision was removed. Labour say they will “require employers to create an maintain workplaces and working conditions free from harassment, including by third parties”. I take that to mean that some form of liability for third-party harassment will be imposed – although you could also read that sentence as merely referring to an extension of the 2023 Act’s duty to take reasonable steps to prevent sexual harassment. We shall see.

Minimum wage

The introduction of the National Minimum Wage in the first term of Tony Blair’s administration has to count as Labour’s most successful employment law reform. It was initially opposed by the Conservatives, but by the time David Cameron became Prime Minister it was simply accepted as an established feature of work in the UK. 

One way in which Labour ensured the wide acceptance of the minimum wage was the creation of the Low Pay Commission which was tasked with making recommendations as to what the level of the minimum wage should be. It makes those recommendations based on the remit given to it by the Government. So at first Labour was very cautious about the level of the minimum wage and the remit stressed the importance of setting the NMW at a level that did not threaten jobs. It was George Osborne as Chancellor who changed the remit to ask the Commission to move towards a rate based on median earnings and in 2019 the remit was set so that workers aged 21 or over should enjoy a Minimum Wage of two thirds of median earnings by 2024, taking into account economic conditions.

Labour proposes to change the remit so that “alongside media 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”. This is obviously aimed at moving the rate of the minimum wage closer to the “Real Living Wage” set by the Living Wage Foundation. It has to be said that the gap between the Minimum Wage for those 21 and over (currently £11.44) is not too far short of the real living wage – at least outside London – of £12. So this change does not seem very dramatic. Whether the remit would survive an economic shock leading to a significant rise in the cost of living and a return of high inflation is of course another matter. 

A change to the Low Pay Commission’s remit does not require legislation so it can be implemented very easily. Labour also proposes however to “remove the discriminatory age bands to ensure that every adult worker benefits”. There are currently three minimum wage rates. Those aged 16-17 are entitled to £6.40 per hour, those aged 18-20 get £8.60 and for those aged 21 and over the rate is £11.44. So presumably Labour could paln to keep the 16-17 year old rate, but abolish the rate for 18-20 year olds. That is an easy step to take and can be done by Regulation. It is not clear from the document whether the Apprentice rate of £6.40 will remain given that many of those on apprenticeships are 18 or over. 

Labour also says that they will ban unpaid internships “except when they are part of an education or training course”. I’m not sure what that law would look like. If interns are doing work for the employer – if they are ‘workers – then they are likely to be entitled to the minimum wage in any event. Defining what an internship actually is – and distinguishing it from a work experience placement – might prove tricky. 

Adult social care

The Labour Party manifesto for 2017 promised to “roll out sectoral collective bargaining”. What that meant was that  collective agreements reached at a sectoral level (for example, in the chemical industry or the retail sector) would automatically apply to all employers operating within that sector. That is a system common in Europe but radically different from the UK approach which is to allow individual employers to make their own arrangements for pay – either with or without input from unions.

In ‘Labour’s Plans to Make Work Pay’ the Labour Party does not abandon this aim altogether – stressing the importance of collective bargaining in in helping companies and workers ‘adapt to the new world of work’. But its specific policy proposal is to start with a “Fair Pay Agreement” in the adult social care sector.  The idea would be that a new negotiating body would be set up for the sector and that agreements reached through that body would then be applied to the individual employers within it. When this is up and working Labour will then look at seeing what other sectors would benefit from the same approach. 

From a legal point of view this is quite straightforward. The idea that minimum terms and conditions would apply in particular sectors was a feature of UK employment law for much of the Twentieth Century up until the final abolition of wages councils under the Thatcher governments.  Adult social care seems a good sector to start with because it is easy to define – being regulated by the Care Quality Commission – and is characterised by low pay and a large number of small employers with little scope for union recognition at a company level. Setting up the system and reaching an agreement seems to be the key challenge and I cannot see any prospect that Labour would be in a position to roll out the arrangement to other sectors within its first term. If the idea catches on, however, it could herald a serious shift in our system of industrial relations.

Enforcement

Everyone seems to agree that employment law should have a ‘single enforcement body’ – it was even pledged in the 2019 Conservative manifesto (page 39). Labour proposes to st up a body “to enforce workers’ rights, including strong powers to inspect workplaces and take action against exploitation”. Labour says that it will have “ the powers it needs to undertake targeted and proactive enforcement work and bring civil proceedings upholding employment rights”. The crucal question here is what resources this body will have. If it is to conduct workplace inspections, how many inspectors will it be able to employ? How many cases will it be able to bring and what rights will it be able to enforce? Will it be limited to minimum wage violations or will it also be able to enforce rest breaks and holiday entitlement? Unlike other employment-law proposals Labour is making, this has direct public spending implications. I will not get too excited about this new body until I see how big its budget is. 

Procurement

Labour pledges to bring about the ‘biggest wave of insourcing of public services in a generation’. This is not really an employment law measure and public sector procurement is a subject all of its own. However, Labour will reintroduce the ‘two tier’ code of practice that was scrapped by the Coalition Government in 2010. The Code was aimed at closing what was seen as a loophole in the TUPE protection that governed services that were contracted out to the private sector. Employees who were transferred would have their terms and conditions protected, but if new employees were recruited who had not been employed prior to TUPE the employer was free to pay them less than the transferred staff. Over time this would erode the pay and conditions of employees in contracted out services and so a Code of Practice was introduced requiring public bodies to insist that contractors did not employ people to work ‘alongside’ those who had transferred across on less favourable terms and conditions. It was frankly a rather vague requirement – we never quite figured out what ‘alongside’ meant – and not easily enforced.  Labour say they will ‘strengthen’ the Code rather than just reintroduce it, so it will be interesting to see what that means.

Enough to be going on with?

I think I’ll stop there. There are other bits and pieces that I haven’t gone into and Im sure I’ve missed out proposals that will turn out to be quite important. 

The point is this: there is a lot of new employment law coming our way. Unless the polls are wrong to such an extent that the whole polling industry will be plunged into an existential crisis, the next five years will see fundamental changes to the relationship between employers, workers and trade unions. Personally, I would be surprised if Labour managed to get through everything set out in their policy document in five years. So one of the things I will be watching for in the manifesto is whether it gives any clues as to how they will prioritise the work. Out of the 40 or so specific measures that they have committed to, what are they key things that they will move on in the first year? 

My guess – and I have no inside knowledge on this – is that a Trade Union Bill repealing the Trade Union Act 2016 and the Strike (Minimum Service Levels) Act 2023 could be introduced really quite quickly. The proposals on union recognition and industrial action are quite complex and would take some time to develop, but perhaps the Bill would create regulation-making powers so that they could be addressed separately?  Meanwhile the Government could start consulting on issues like zero-hours contracts and fire and rehire while they worked up some specific proposals. Abolishing the qualifying period for unfair dismissal can be done by Regulation – but introducing specific provisions on probation periods would have to be done in an Act of Parliament wand would take up Parliamentary time.

The last about Government was elected on 1 May 1997. The National Minimum Wage Act received Royal Assent on 31 July 1998. The statutory union recognition procedure and most other individual employment rights such as the right to be accompanied and protection against dismissal for striking workers were introduced by the Employment Relations Act 1999 which was given Royal Assent in July of that year – more than two years after the election. This sort of thing takes time – it would be a huge mistake to get fixated on getting things done inside the first 100 days or other such arbitrary timetable.

In any event, I should try not to get ahead of myself. No votes have been cast yet. But while the press might talk about Labour’s ‘watered down’ proposals on workers’ rights, I think those of us who work in this area need to appreciate the scale of the change that is (probably) about to come – albeit not as quickly as some would like.