Understanding Labours New Deal Plan

Labour’s landslide win at the general election means that there will be significant changes to the recruitment space for both employees and employers. This is due to the promises Labour made during its campaign, particularly its ‘Plan to Make Work Pay.’ Alongside this plan two bills on employment law were announced during the King’s Speech in July: an Employment Rights Bill and a draft Equality (Race and Disability) Bill.  

Labours New Deal Plan: 

Labour’s New Deal for Working People is part of their core mission to help grow Britain’s economy and help raise the living standard across the country. This legislation is to be introduced within the first 100 days of entering government.  

Employment Rights Bill: 

The Employments Rights Bill is set to be introduced by the 12th of October 2024 and will include new laws needed to implement Labour’s New Deal for Working People. These laws will include: 

• Day 1 employment rights: This will include the right not to be unfairly dismissed. While this may make some employers more cautious about recruiting due to the increased process around dismissing new hires, they should remember that an employee who fails probation can still be dismissed if you follow a fair and transparent process. 

• Ban on zero hours contracts: Ensuring workers have rights to a contract reflecting average hours worked and more security with shift scheduling. Labour’s plan is to bring in a new right to a contract that reflects hours that are regularly worked (judged against a 12- week period) though they have not yet stated the minimum hours that must be guaranteed.  

• Ban on unpaid internships: They will introduce an explicit ban on unpaid internships except as part of an established training or education program.  

• Restriction on ‘fire and re-hire’ as well as ‘fire and replace.’ Labour has promised to clamp down on employers who dismiss employees and then offer to re-engage them on new terms. This will now only be allowed for business to who are restructuring to remain viable and preserve their workforce with no other alternative. Labour believes that the new code which came into force in July 2024 is still inadequate and should be replaced by a stronger version.  

• Flexible working will be made the default from day 1. 

• Fair Work Agency: More state enforcement of employment rights due to the delays in the current tribunal system. This new body will have powers to enforce working time, holidays, pay, sick pay, agency rules and discriminatory practices. For employers, however state enforcement can sometimes lack the scrutiny and assessment of an employment tribunal.  

• Unions: The Employment Rights Bill will introduce rights for trade unions to access workplaces in a regulated and responsible manner, on appropriate notice. There will also be obligation for employers to notify workers of their right to join a trade union when they start a new job as well as reminders of this right on a regular basis.  

Proposed Equality and (Race and Disability) Bill: 

This draft bill currently includes: 

• An extended equal pay regime which will cover race and disability as well as sex. 

• Introduce mandatory ethnicity and disability pay reporting for employers with at least 250 people. 

• Outsourced workers will need to be included in gender pay gap reporting.  

Labour has planned to draft a bill to extend the flawed equal pay regime to cover additional characteristics which may lead to more difficulties when complaining about discrimination so more consulting needs to occur before the bill is put forward.  

 Read more about making your hiring process more equal here 

Labour’s Plans for Apprenticeships: 

 They want to reduce unemployment within the 18-21 age category and to do so, it plans to establish a guarantee that everyone aged 18 to 21 will have access to an apprenticeship, training, and support in finding work. In addition to this Labour plans to reform the Apprenticeship Levy by replacing it with a new Growth and Skills Levy.  

These details are currently known about this proposal: 

• Up to 50% of a company’s total Levy contributions can be used on non-apprenticeship training whilst the remaining 50% remains reserved for apprenticeships. 

• Companies who do not pay the levy will continue to receive 95% funding, though it is not clear if this is just for apprenticeships, or this includes non-apprenticeship training too. 

 This will be a helpful way for businesses to use their Levy funds particularly as a FOI (Freedom of Information) request showed that £3.3 billion of unused apprenticeship levy was returned to the treasury between 2019 and 2022.  

 Find out more about apprenticeships here 

Labour’s New Deal Plan for 2024 sets out an ambitious roadmap to improve the lives of workers across the UK. Central to this vision is the Employment Rights Bill, which will enshrine stronger protections for workers, ensuring fair wages, secure contracts, and better working conditions. The Equality Bill aims to address systemic disparities, promoting inclusion and fairness in the workplace for all, regardless of background Recruitment teams will need to align with HR, legal and leadership within their organisation to ensure hiring practices are up to date with Labour new legislations.