The UK Labour Party has proposed sweeping overhauls of workers’ rights, including maternity and sick pay, day-one protection against unfair dismissal, bans on zero-hours contracts, fair pay agreements and union access. In New Zealand, it is like looking at our present and back to our past.
After months of speculation, last week the British Prime Minister, Rishi Sunak, called a national election for 4 July. The opposition Labour Party is running about 20 percentage points ahead of the Conservative Party in the opinion polls.
What might UK employment law world look like if as expected the Labour Party leader, Keir Starmer, walks into Number 10 later this year? In January 2024 the UK Labour Party set out their proposals for change in a green paper “New deal for working people”.
What are these proposals (and how do they compare to New Zealand):
- Making unfair dismissal a day one protection, removing the qualifying period (currently two years continuous service for ordinary unfair dismissal claims). There is no qualifying period in New Zealand.
- Removing the limit on compensatory awards for unfair dismissal claims (although those likely to benefit most are high earners). There are no statutory limits in New Zealand, although our Employment Court has effectively imposed bands of compensation. For the most serious cases, this may be in excess of $50,000.
- Extending unfair dismissal protection to workers, not just employees (what may loosely be described as “dependent” contactors). New Zealand’s minimum employment entitlements, including unfair dismissal protections, do not extend to contractors.
- Extending the three-month time limit for claims of unfair dismissal in the UK Employment Tribunal (although it is not yet clear what that may be). In New Zealand employees have 90 days in which to raise a grievance.
- Introducing personal liability for directors of companies who fail to comply with Tribunal orders. In certain circumstances, directors and officers of a company may be held personally liable, or liable to penalties, in New Zealand’s employment jurisdiction.
New Zealander’s may be surprised that the UK Labour Party is planning to empower workers to act collectively through the roll-out of Fair Pay Agreements. Like New Zealand’s now abolished system, Fair Pay Agreements would be negotiated through sectoral collective bargaining. Worker representatives and employer representatives would negotiate Fair Pay Agreements to establish minimum terms and conditions, which would be binding on all employers and workers in the sector. They are proposed to cover a wide range of issues including pay and pensions, working time and holidays, training, work organisation, diversity and inclusion, health and safety, and the deployment of new technologies.
The green paper “New deal for working people” also sets out other proposals, including:
- Enhancing “Family Friendly Rights” including extending maternity/paternity leave, introducing a right to bereavement leave and strengthening protections for pregnant employees.
- Enhancing sick pay rights by removing qualifying period of continuous service for sick pay, raising the entitlements for sick pay making it available to all workers (including “dependent contractors”).
- Introducing a right to “switch off”. Such a right has recently been introduced in Australia, and has already been implemented in some European countries, which protect workers if they fail to answer emails and txts from their managers outside of working hours.
- Bolstering discrimination laws, including allowing equal pay claims based on ethnicity and disability (which like New Zealand are currently only based on sex).
- Abolishing “zero-hour” contracts and contracts without a minimum number of guaranteed hours. Such contracts are already banned in New Zealand, although employees may commit to working more than their guaranteed hours if they have an “availability provision” compensating them for being available to do extra hours if required.
Of course, sometimes not all pre-election commitments are stuck to. But given the UK Labour Party’s significant lead in the polls as it goes into the election, it is unlikely to have to seek compromises with coalition partners.
The United Kingdom, should they even consider our small island nation, may take comfort that some of what is being proposed has worked well in New Zealand under both Labour and National governments. Conversely, New Zealand may be able to look to the United Kingdom and consider some of their proposals; expanding equal pay claims to include ethnicity and disability; extending the time limit to bring a grievance claim; and providing enhanced protection for “dependent contractors”. Read more....