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What the New UK Labour Employment Laws Means for HR and Businesses

July 8, 2024

With a new UK government comes new change, and with the Labour Party now in power, businesses and HR professionals are bracing for another wave of reforms. Following the win of the UK general election, Labour have proposed to implement their 'Plan to Make Work Pay' legislation within the first 100 days in office.

The new employment laws proposed by the Labour government aim to transform the working conditions across the country, placing greater emphasis on workers' rights, job security, and equitable treatment.

For HR leaders and businesses, these changes present both challenges and opportunities. This blog will delve into the new employment laws, the key changes proposed by the Labour government, and what these mean for HR and businesses in the UK.

Overview of the New Employment Laws

The Labour Party has long advocated for stronger protections for workers, and their latest proposals highlight key areas they want to focus on. The new employment laws are designed to address a wide range of issues, from job security to greater equality by strengthening harassment laws, introduction of ethnicity and disability pay gap reporting for employers with more than 250 employees, and revision of gender pay reporting . Below are some of the most significant changes that are expected to take effect:

  1. Ban 'Exploitative' Zero-Hour Contracts
  2. Introduction of a Flat Rate Minimum Wage
  3. Strengthening of Workers' Rights
  4. Increased Focus on Workplace Equality
  5. Enhanced Job Security
  6. Expansion of Worker Training and Development

This is by no means an extensive list of their proposed changes, more detail can be found here.

Key Changes and Their Implications

These proposed changes reflect a significant shift in UK employment law, with wide-ranging implications for both employers and employees. Understanding these key changes is crucial for HR leaders and businesses to navigate the evolving legal landscape effectively.

Ban on 'Exploitative' Zero-Hour Contracts

One of the most notable changes is the proposed ban on zero-hour contracts. However, at first glance this could read banning zero-hour contracts although, whereas, the focus is ensuring everyone has a right to a contract that reflects the number of hours they regularly work.

Businesses that rely heavily on zero-hour contracts will need to reassess their staffing models and prepare for any transitioning to part-time or full-time contracts, should the employee want a contract.

The main things to keep in mind when looking at your Zero-Hour Contract is how this could increase potentially payroll costs and impact flexibility.

During the transition, it's important that HR leaders communicate clearly with any affected employees and address any concerns they might have about job security and work patterns.

Introduction of a Real Living Wage

The Labour government plans to replace the National Minimum Wage with a 'Real Living Wage', which would be higher and based on the actual cost of living. This change aims to ensure that all workers can afford a decent standard of living.

The increase in wages will likely raise operating costs, particularly for businesses with a large number of low-paid workers. HR will need to work closely with finance teams to budget for these changes and explore cost-saving measures.

However, it's important to remember that higher wages can lead to increased employee satisfaction and reduced turnover, which can enhance productivity and loyalty. And with the cost of living crisis continuing in the UK, businesses can look after their employees financial wellbeing with access to employee discounts and savings.

Strengthening of Workers' Rights

Probably one of the biggest points the Labour Party are proposing, that encompasses a range of new policies is looking at strengthening workers' rights. This includes strengthening statutory sick pay, extending maternity and paternity leave, enhancing protection against unfair dismissal, flexible working from day one and ensuring that workers have a stronger voice in the workplace through improved union representation.

HR departments will need to update policies and procedures to comply with the extended maternity and paternity leave, and enhanced protection against unfair dismissal. This will involve revising employee handbooks, training managers, and ensuring legal compliance.

With stronger union representation and collective bargaining rights, HR leaders will need to engage more proactively with unions, fostering positive relationships and addressing any potential conflicts early.

Increased Focus on Workplace Equality

The new laws will mandate more comprehensive equality and diversity policies including introducing the 'Race Equality Act' and the 'Menopause Action Plan' for employers with more then 250 employees.

Firstly, to address wage disparities, the new laws will enforce stricter measures to receive equal pay with an introduction to ethnicity and disability pay plus pay gap reporting for organisations with over 250 employees.

In order to address this, companies will need to conduct regular pay audits and report on their gender pay gaps. HR leaders will be responsible for implementing systems to track and analyse pay data, and for developing strategies to address any disparities.

This will inevitably lead require a culture change, where it has been the norm to ask employees' not to discuss their salary, creating a culture of transparency will create a stronger workforce.

For other areas, such as the Menopause Action Plan or the plan to strength protections for reporting of sexual harassment, HR administrators should start to think about what processes and information they have in place already and start to think about how to update these policies.

Enhanced Job Security

As mentioned earlier, Labour are looking at enhancing unfair dismissal claims, which is to make it harder for employers to dismiss workers unfairly, as well as introducing more stringent regulations around redundancy and dismissal processes.

HR will need to ensure that dismissal and redundancy processes are robust, transparent, and fair. This may involve additional training for managers and more thorough documentation of performance and conduct issues.

Strengthening job security can enhance trust and morale among employees, potentially leading to increased engagement and productivity.

Expansion of Worker Training and Development

There will be greater emphasis on ensuring that workers have access to ongoing training and development opportunities, with a focus on key sectors such as; health & social care and construction, helping to future-proof their careers and adapt to changes in the job market.

Businesses will need to invest in ongoing training and development programs to ensure their workforce remains competitive and adaptable. HR will play a key role in identifying training needs and sourcing appropriate programs.

Enhanced training opportunities can support career development and progression, which can improve employee retention and satisfaction.

Preparing for the New Employment Laws: A Guide for HR Leaders

Navigating the upcoming changes will require strategic planning and proactive management from HR leaders. Although these plans are said to be implemented within the first 100 days, many of the new proposals will need to passed by the Houses of Parliament first so there will likely be plenty of time for HR professionals to prepare.

With that in mind, we've put together some steps HR leaders can take to prepare for the new employment laws:

Conduct a Comprehensive Audit

Start by conducting a thorough audit of your current HR policies, practices, and employment contracts. Identify areas that will be impacted by the new laws and assess the changes needed to ensure compliance.

Engage with Legal Experts

Work closely with legal experts who specialise in employment law to understand the specific implications of the new regulations for your business. This will help you interpret the legal requirements accurately and implement them effectively.

Review and Revise Policies

Update your HR policies and employee handbooks to reflect the new legal requirements. Ensure that all relevant policies, such as those related to maternity and paternity leave, dismissal procedures, and wage structures, are revised accordingly.

Communicate with Employees

Transparency is key to managing change effectively. Communicate the upcoming changes to your employees clearly and provide them with the information they need to understand how the new laws will affect them. This can help to alleviate concerns and build trust.

Train Managers and HR Staff

Ensure that your managers and HR staff are fully trained on the new laws and understand their roles in implementing them. This includes training on new policies, procedures, and any changes to employment practices.

Develop a Compliance Strategy

Create a detailed compliance strategy that outlines how your organisation will meet the new legal requirements. This should include timelines, responsible parties, and a plan for ongoing monitoring and review to ensure continued compliance.

Invest in HR Technology

Consider investing in HR technology and software that can help you manage the changes more efficiently. This could include systems for tracking pay equity, managing employee records, and communication tools that are automated.

Foster a Culture of Inclusion and Fairness

The new laws place a strong emphasis on equality and workers' rights. Foster a culture of inclusion and fairness within your organisation by promoting diversity, addressing discrimination, and ensuring that all employees are treated equitably. Through this you can create an engaged workplace where people are able to celebrate one another regularly.

Prepare for Financial Implications

Work with your finance team to prepare for the financial implications of the new laws. This may involve budgeting for increased wages, additional benefits, and compliance costs. Explore ways to offset these costs through operational efficiencies or other cost-saving measures.

Monitor Legislative Developments

Stay informed about any further legislative developments and updates to the new employment laws. This will help you to anticipate future changes and adapt your strategies accordingly.


The new UK Labour employment laws could represent a significant shift in the landscape of employment regulation. By proactively preparing for these changes, HR professionals can ensure that their organisations remain compliant, competitive, and supportive of their workforce.

Embracing the spirit of these reforms—fostering fair treatment, job security, and equal opportunities—can ultimately lead to a more motivated, productive, and loyal workforce, driving long-term success for businesses across the UK.