The shaping of Labour’s new workers’ rights

Fairness and partnership: the fundamental elements of Labour’s new workers’ rights policies. Today, the government sought to put those principles into practice as they met with leading employers across the country.

As part of this, they aim to keep businesses updated on what to expect from the reforms and assure them they will be consulted on the new rules "every step of the way."

There is a sense that Labour has slightly rowed back on some of its original stances from 2021 when the now Deputy Prime Minister, Angela Rayner, announced plans for a "new deal for working people." This was followed up in 2023 when Rayner made a "cast iron commitment" that an Employment Rights Bill would be brought forward within 100 days of Labour being in office.

As the first 100 days approach, Labour’s plan for new employment rights is taking shape. Since the original proposals, Rayner still plays a crucial role in spearheading the Bill, but Business Secretary Jonny Reynolds has taken on the project as businesses voiced concerns about the potential negative impact of the reforms on the economy.

The plans for how exactly Labour will "make work pay" are being fleshed out, including how the new Fair Work Agency (FWA) will function in practice. Promises include enforcing the real living wage as the minimum wage, making flexible working the default from day one, updating trade union legislation, banning exploitative zero-hour contracts, introducing the ‘right to switch off,’ and considering the option of four-day working weeks.

However, businesses have expressed concerns about these potential new policies, citing Labour’s chief mission of growth and the limitations these policies could impose. A particular concern is whether the FWA will have the authority to issue fines and bring prosecutions if employers do not uphold the new reforms.

Labour has promised to continue consulting businesses, but as the plans take shape, there are fears about the lack of specificity in what employment rights will look like in the coming months and years. At today’s meeting with key business leaders, Rayner and Reynolds plan to address these concerns by assuring that the new rules will boost productivity rather than reduce economic growth.

Since first announcing their proposals, there have been notable changes, demonstrating that Labour is willing to adjust some policies in response to businesses' concerns, such as earlier this year when the party downgraded the pledge to end all zero-hour contracts, instead banning only the ‘exploitative’ elements of those contracts.

While businesses may welcome the dilution of the draft new deal for workers, trade unions have voiced their frustrations, with Sharon Graham of Unite commenting that Labour is "rowing back on its pledges for the New Deal for Workers" and that it is "unrecognizable from the original proposals." Graham is clearly making the unions’ stance clear ahead of her scheduled meeting with Keir Starmer next Tuesday.

Can Labour reconcile its promises to be both "pro-worker and pro-business"? It seems Labour will take a more cautious approach to employment reform than initially proposed, but whether the government can strike a deal that pleases both businesses and unions remains to be seen.