In July 2024, the newly elected Labour government set out its manifesto on how it plans to reform employment law in England and Wales. If Labour brings all its proposed reforms into force, we are likely to see the largest overhaul of workers’ rights in over a decade.
One of Labour’s key proposals is to clamp down on the use of what Labour calls “exploitative” zero-hours contracts. By doing this, the intention is to end “one sided flexibility” and to give individuals at least some level of stability and predictability with regards to their work and their financial income.
The Employment Rights Bill plans to give workers the legal right to a contract which reflects the number of hours they work on a regular basis, rather than one that does not guarantee any minimum number of hours. Regular hours will be calculated on the basis of a 12-week reference period. Employers will also now have to give employees ‘reasonable notice’ when cancelling or rearranging shifts. They may even have to compensate workers for loss of earnings in such circumstances.
It is estimated that one million workers in the UK are engaged on zero-hours contracts, so the impact of this legal change is going to be significant. The proposal will provide increased financial security and less instability for workers. However, it could have adverse effects on businesses who see seasonal demand for labour such as those in the events and hospitality industries.
The proposed changes also prompt a review of how contractual hours can impact immigration status, and vice versa.
Listen to our podcast where Sophie Wahba, Associate and Kash Dosanjh, Senior Associate delve deeper into the proposed changes, explore what these mean for employers and explain what employers can do to prepare. Matthew Davies, Partner and Head of Business Immigration also provides a useful insight into how this reform is likely to impact businesses from a business immigration perspective.
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