Labour’s “Making Work Pay Plan: Delivering a New Deal for Workers” is designed to create a fairer and safer workplace for everyone. With a promise to pass legislation within their first 100 days in office, it is likely that a bill will be presented to Parliament very soon.

You may be wondering how these changes could impact your business. For SMEs, staying informed and prepared is essential to address these potential changes in business operations and workforce strategies. Our platform is packed with tools and resources that make compliance simple, and our HR consulting service lets you speak to HR experts whenever you need.

But with big changes on the horizon, we break down these proposals and offer some ideas to help you plan ahead.

Right from day one to claim unfair dismissal

The proposal: introduce a right for employees to claim unfair dismissal from the first day of employment, thus moving away from the current requirement of at least two years of service. However, employees dismissed during their trial period could not claim unfair dismissal. This protection can also extend to workers, not just employees.

Advice for SMEs: This change aims to create a more equitable work environment, but will also create more bureaucracy for employers by making it more difficult to make quick decisions about firing employees. Given that it appears that individuals will not be able to claim unfair dismissal if they are made redundant during a probationary period, it will be more important than ever to put in place robust employment contracts for all staff, clearly stating that current employment will be subject to working conditions. have successfully completed a probationary period.

The other tip is to be smart about your recruiting. If it’s proving more difficult to move employees who aren’t a good fit, you need to make sure you’re making the best possible choices about who you hire in the first place.

Flexible working by default

The proposal: The right to request flexible working arrangements is a new right since April 6, 2024, so it is not entirely clear what other reforms the government is proposing in this area. The permissible grounds for refusing a flexible working request may be restricted to make it more difficult for an employer to reject a flexible working request. It is also proposed to extend flexible working rights to workers and not just employees.

Advice for SMEs Flexible working can increase employee satisfaction and productivity. As a business that thrives on remote work, we know a thing or two. However, it is also important for employers to set expectations for what is required of employees when working flexibly. For example, when employees are working remotely, a remote work policy is a great place to start. Check out this blog to learn how to help your team maintain team productivity with flexible or remote schedules.

Ban on “exploitative” zero-hours contracts

The proposal: Although the government has said it will eliminate ‘exploitative’ zero-hours contracts to improve job security, it is unclear how ‘exploitative’ zero-hours contracts will be defined or whether they will There will be a ban on zero-hours contracts. all zero hours contracts. One proposal is that employees on zero-hours contracts who work normal hours will be entitled to move to a regular contract after 12 weeks, but can choose to remain on zero-hours contracts if they wish.

Advice for SMEs: Promoting job security is a positive step, but it could impact businesses that rely on flexible and casual working arrangements. If this applies to you, consider offering part-time or fixed-term contracts to maintain workforce flexibility. We’ll keep you updated as more details emerge, so you can adapt smoothly.

End firing and rehiring practices

The proposal: Ban the practice of firing employees only to rehire them on less favorable terms, except when there is truly no alternative.

Advice for SMEs: Understanding when you will still have the right to fire and rehire will be crucial, and our HR consulting team is always on hand to help you resolve tricky questions like this.

If it becomes more difficult to fire and rehire employees on reduced terms in order to save money, businesses may need to explore other ways to manage costs effectively. Have you thought about other ways to optimize and automate your workflow? Our HR automation solutions can help streamline operations and effectively reduce costs.

Raise the minimum wage

The proposal: adjust the minimum wage to take into account the cost of living, create a real living wage and remove age brackets so that all adults are entitled to the same minimum wage.

Advice for SMEs Our State of Workplace Wellbeing report highlighted financial stress as the top concern for employees. This proposed minimum wage increase could significantly ease this burden, creating a more favorable working environment, but it is unclear whether the government has considered how businesses will be able to afford it. Keep an eye out for our next Instapay feature, designed to further improve financial well-being and help your team thrive.

Equal Pay Report

The proposal: Require companies with 250 or more employees to publish pay gaps between men and women, ethnicities and disabilities, as well as action plans to close these gaps.

Advice for SMEs: Although we already have gender pay gap reporting obligations, these proposals extend equal pay protections to ethnicity and disability. Make sure your payroll system includes features to track and close pay gaps. We provide tools to support equal pay reporting, driving transparency and fairness in your business. This can help you stay compliant and foster a more inclusive workplace.

Legal reforms to sick pay

The proposal: Make statutory sick pay available from the first day of illness and remove the lower salary cap so that all employees and workers are eligible, even those on low wages.

Advice for SMEs These changes will likely increase costs for employers, requiring adjustments in budgeting and forecasting. Reducing the need for employees to take time off is more important than ever: consider implementing an employee assistance program (EAP) to support employee well-being and reduce absences.

Mental health support in the workplace

The proposal: Improve support for workers, with a focus on mental health.

Advice for SMEs A proactive approach to mental health is essential. We offer resources to help you create a supportive work environment. Check out our State of Workplace Wellbeing report to learn more about our findings.

Family-friendly rights

The proposal: protect women who have recently returned from maternity leave from dismissal for six months after returning to work, unless a specified reason applies, and make parental leave a one-day right for all workers (not just employees).

Advice for SMEs: If these changes are implemented, they could impact your parental leave policies. Now is a good time to review your policies and stay informed of upcoming changes. We will update our policy templates to reflect any legal changes, ensuring you are always compliant.

The conclusion

These proposed changes aim to promote inclusive and equitable workplaces, but will also cause difficulties for businesses to comply with these new obligations. Although these are not yet laws, staying informed and proactive can help ensure a smooth transition if and when they are implemented.

Question for our readers: How do you think these potential changes will affect your hiring and employment practices? Share your thoughts in the comments!