Labour's 'New Deal for Working People': Day one rights for agency workers – an end to turn on/turn off resource?
Published on 1st Jul 2024
Our fourth report considers how use of agency workers and gig workers in the UK will be affected, and the steps that can be taken now by staffing companies and platforms to minimise the impact
Labour's plans include day one rights for all workers.
Day one rights – what will be included?
Rachel Reeves, currently the shadow chancellor and a likely dominant force in the new government, seems particularly attached to this measure and so it is likely to be high on the agenda of the government. Her view, formed partly out of economic theory, is that workers need day one rights to have the confidence to move jobs so that they can get "better" employment and add to UK productivity.
It appears from its manifesto that Labour's commitment in this area has been reined back to cover only parental rights, sick pay and protection from unfair dismissal.
We believe that legislation will be introduced fairly quickly so that sick pay rights (the importance of which was deemed proven by evidence that workers without sick pay rights carried on coming to work during the Covid pandemic, spreading the virus) and (probably) parental rights will apply to all workers including agency workers from day one of engagement, as well as zero-hour workers and other casual staff.
Day one rights – unfair dismissal?
Protection against unfair dismissal does not seem such an easy thing to implement quickly and effectively: the proposal seeks to reassure employers by saying that probation arrangements will still apply. That leaves employers not knowing whether a full unfair dismissal protection will apply from day one (with dismissal not being "fair" except via tight performance management) or there will be some sort of lesser regime (a limited statutory window) at the start of any probationary period.
What is also not clear is whether the right to protection against unfair dismissal will apply to agency workers (and if so against whom would they claim these rights), and how the massively over-stretched employment tribunals will cope with a further increase in tribunal claims.
Labour has been vocal on its intention to crack down on the practice of "fire and re-hire" to force through changes to employment terms and promises to bring in a strengthened Code of Practice requiring more rigorous consultation with the workforce before changes can be made. That Code of Practice may also need to cover how agency workers' rights should be protected – otherwise companies which want to use fire and re-hire may just start filling new roles with agency staff.
Overall we think protection against unfair dismissal will not apply to agency workers at any early point after the election and that protections for agency workers would need to wait until the outcome of consultations about introducing a single class of worker. This consultation process would need to clarify what is and is not "unfair" (and who is being unfair) in an agency supply arrangement where there may be several entities involved in the process of terminating an agency worker. See this Insight for further comment on the issues relating to "single worker" status.
Preparing for day one rights for agency workers
Staffing companies, umbrella companies and platforms should consider revising contract terms now for new joiners and any workers whose assignments may extend beyond October to ensure that an adequate probationary period is included and ensure that current processes for addressing any concerns that arise during a probationary period are fair, with an option to extend the probationary period in appropriate circumstances.
Umbrella arrangements may, in particular, be affected by day one unfair dismissal rights.
However, staffing companies, umbrella companies and platforms can probably wait for the outcome of consultations before taking major action relating to unfair dismissal rights for agency workers – we believe these protections for agency workers would need to wait until the outcome of consultations about introducing a single class of worker (see later comments in this Insight), and that may take a year or two to play out.
What to do next
Let us know if you would like to discuss which types of worker this will apply to and the detailed actions you will need to take to minimise risks.
Our series of reports
Read our reports covering further aspects of Labour's plans:
Report one: the right to predictable hours
Report two: further crackdown on 'dodgy' umbrella arrangements and increased IR35 enforcement
