Reed Smith In-depth

Key takeaways

  • The Labour Party ‘Plan to Make Work Pay’ published on 24 May 2024 promises numerous proposals for reform of UK employment law and employment rights if elected. Some proposals would change the law as we know it significantly if implemented.
  • Labour intends to start legislative process within 100 days of entering government, subject to consultation and other government and parliamentary priorities.
  • Many promises are light on detail, but employers anticipating Labour victory can prepare for potential changes, particularly in assessing impact of proposals, so they can participate in consultations.

Auteurs: Carl De Cicco Alison Heaton Claudia Gwinn


With the UK general election now set for 4 July 2024 and opinion polls predicting a Labour victory, employers are keen to understand what a change in government would mean for employment law and employment rights in the UK.

Labour’s ‘Plan to Make Work Pay’ was published on 24 May 2024 and promises to deliver “the biggest upgrade to rights at work for a generation”. This publication explores 10 of the key proposals, their impact if enacted, and what (if anything) employers can be doing now to prepare for anticipated changes.

1. Reform of employment status to create a single status of ‘worker’ for anyone who is not genuinely self-employed

What is the current law?

Currently, English law recognises three types of employment status: ‘employees’, ‘workers’ and ‘self-employed’. While employees have extensive statutory rights and protections, workers only benefit from some (for example, the right to holiday pay and a minimum wage) and the genuinely self-employed do not benefit from any of the statutory protections provided to employees or workers.

What does the Labour Party propose?

The Labour Party intends to consult on creating a single status of worker for all but the genuinely self-employed. They suggest that creating a single class of worker will clamp down on ‘bogus’ self-employment and create a much simpler framework for workers and employers alike.

However, while the Labour Party suggests that a two-tier system will be simpler, there is also recognition that a transition to this may not be straightforward. Labour has committed to consult in detail on how it might work and acknowledges that this proposal will take time to review and implement.

The Labour Party also intends to “support and champion” the self-employed, entitling them to a written contract, taking action to tackle late payments and ensuring they are covered by workplace health and safety and blacklisting protections. Additionally, Labour states that changes to trade union rights will benefit the self-employed.

What is the impact for employers?

Employment status is complex, and while the proposals would align employment law with tax law principles (where individuals are either ‘employees’ or ‘self-employed’), the last time there was a consultation on reforming employment status (as part of the Taylor Review in 2017), a decision was taken not to proceed because of the complexities involved.

If the reforms do go ahead as proposed, employers with higher numbers of staff classified as ‘workers’ will be most affected. The cost of engaging (and dismissing) these staff will likely increase significantly because of the additional employment rights and protections afforded to them.

What can employers do to prepare?

Employers should consider carrying out an audit of their entire headcount to determine the number of people in each of the current three status categories and the impact of having a single status of worker for all but the genuinely self-employed.

Employers should then assess the financial impact arising from their current ‘workers’ gaining additional employment rights and benefits. Employers should also consider what implications this will create for the business; for example, whether any negative financial repercussions are sustainable (and how they can be mitigated).

Impacted employers should consider contributing to the consultation when it is launched so that they can have an input and attempt to influence any law reform in this area.