• Terry Hayward
  • 24 September 2018

One Vision of the Future

Four changes to employment law proposed by the Labour Party are worth being aware of as they could lead to a stronger employee (and trade union) voice in companies, a change to the status of zero hours contracts and new rights to leave for victims of domestic abuse.

With the party-political conference season upon us the media interest tends to focus on the leaders and, certainly this year, the political hot potato that is Brexit. In amongst that though it’s an opportunity for the respective parties to throw around new policy ideas and get an idea as to whether they are something their members and the public may support.

Interestingly the Labour party have thrown up some interesting employment suggestions as to what they would do if they were elected into power which are worth highlighting as they’ve attracted some media attention.

  • Employee representatives on the board of directors – Labour have put forward a proposal that employers with 250+ employees should reserve one-third of their board places for elected employee representatives. The aim of this plan is to create greater transparency and allow for employees to be involved at the highest level of decision making within a company. How this sits with current employee representatives or companies who already recognise a trade union is unclear. However, given that these new employee representatives will have to be members of a trade union seems to suggest that there is also an aim to strengthen recognition and increase their remit within companies.
  • Inclusive Ownership Funds - under this proposal companies with 250+ employees that are listed on the stock exchange would set aside one percent of their shares each year into an inclusive ownership fund, up to a maximum of ten percent. The employees would then benefit from the dividends up to a maximum value of £500 each. Also, being shareholders, it would enable them to vote on decisions in the same way as other shareholders. The intention here is twofold, one to give some ownership in the hands of the employees but also to enable them to receive some financial benefit from the success of the company. The oft-cited model for the success of such an approach is John Lewis and indeed the idea of giving staff shares is not entirely radical. However, the second part of this scheme is a little different and has received the most criticism, that any remaining dividend funds are set aside for welfare and public services, leading to accusations of it being a further tax on businesses. Whilst well intentioned, if it were ever brought into legislation it may conflict with, or lead to the withdrawal of, existing employee reward schemes. It may also put pressure on companies to extend this to workers in the gig economy, but Labour have a plan for those as well.
  • Zero Hour Contracts gain Employee Status – this proposal was announced prior to the party conference. In essence, Labour would change the law to recognise those on zero hours contracts as employees, enabling them to be eligible for benefits such as pension, sick pay and parental leave. Labour are not alone in looking at this issue, and indeed the Taylor Review was commissioned in part with this particular situation in mind. However, the current government have been criticised for being slow to take any action so far, so it’s not surprising that Labour are highlighting this as a potential future commitment.
  • 10 days paid leave for victims of domestic violence - reflecting an existing piece of legislation in New Zealand, the proposal is to allow up to 10 days to allow victims of abuse time to leave the home and get the help and support they need whilst being confident that their employment and earnings are secure. This is still a new piece of legislation in New Zealand (it was passed in July) so it will be one to watch to see how it makes an impact there.

There are some interesting ideas being put forward here and it will be interesting to monitor their long-term progress, especially as it’s not uncommon for other parties to adapt or adopt those policies that have had a particular resonance with the public as their own. On the other hand, if the remaining few months of Brexit negotiations don’t go well, we could be looking at a General Election sooner than we expected.  

If you would like to discuss the topics raised in this blog, get in touch with the employment relations experts, Workplace Law