UK Labour Party Promises Major Changes to UK Employment Law

At a Glance

• Labour’s most significant manifesto pledge is its plan to introduce unfair dismissal rights from ‘day one’ of employment, a reduction from the current qualifying period of two years. Other key pledges in Labour’s manifesto include a ban on zero-hour contracts, ending the practice of ‘fire and rehire’, and granting employees parental leave and sick pay as a ‘day one’ right. 
• In Armes v TwistDX and Others, the Employment Appeal Tribunal dismissed an application for claims brought in the Employment Tribunal against a U.S. company and U.S.-based individuals to be struck out. The matter will continue to a substantive hearing, and the case will no doubt be of significant interest to U.S. organisations with UK-based employees.
• Recent changes to statutory paternity leave came into force on 8 March 2024, and the statutory flexible working request regime was expanded on 6 April 2024.

The UK Labour Party stated in its election manifesto, published on 13 June 2024, that “Britain’s outdated employment laws are not fit for the modern economy”. A Labour victory in the UK general election on 4 July 2024 is currently expected, so the Labour Party’s promise to implement a “Plan to Make Work Pay: Delivering a New Deal for Working People” may soon become a reality. 

Key pledges in the Labour manifesto include a ban on zero-hour contracts, ending the practice of ‘fire and rehire’, and granting employees parental leave and sick pay as a ‘day one’ right. However, the most controversial proposal from the perspective of employers is likely the promise to introduce protection from unfair dismissal as a ‘day one’ right. This would signify a major change since, at the moment, employees can only bring a claim of unfair dismissal once they have two years’ continuous employment. There has been a minimum length-of-service eligibility requirement since the statutory protection from unfair dismissal was first introduced in 1971, although its duration has fluctuated over the years. The proposed change would greatly limit employers’ ability to dismiss employees during the beginning of their employment, although the Labour Party previously caveated this proposal by stating that it would allow employers to operate probationary periods to assess new hires. 

The Labour Party has said that if it wins the election on 4 July 2024, it will fully consult with “businesses, workers, and civil society” before passing any legislation. Watch this space!

UK Employment Tribunal Considers Jurisdiction Over U.S.-Based Respondents

In Armes v TwistDX and Others [2024] EAT 45, the Employment Appeal Tribunal (EAT) considered an application for claims brought in the Employment Tribunal (ET) against a U.S. company and U.S.-based individuals to be struck out. 

Dr Armes was the sole director of TwistDX Ltd (a UK company) and was employed as its chief executive officer. His wife, Mrs Kent-Armes, was employed as its chief operations officer. After an earlier sale in 2010, TwistDX Ltd was ultimately acquired by a U.S. company, Abbott Laboratories, in 2017. Dr Armes and Mrs Kent-Armes (the Claimants) were both dismissed in 2018. 

The Claimants claimed their dismissal was linked to whistleblowing disclosures and other concerns they had previously raised. As a result, they brought a number of claims, including for whistleblowing and discrimination, against TwistDX Ltd, Abbott Laboratories and three U.S.-based individuals (together, the Respondents). 

Abbott Laboratories and the three U.S.-based individuals applied to have the claims against them struck out, arguing that the ET did not have international jurisdiction to hear those claims. The ET refused to strike out the claims, and the EAT upheld that decision. 

In relation to Abbott Laboratories, the EAT found that it was reasonably arguable that the U.S. company could be the Claimants’ employer for the purpose of applicable law (even though there was no contract between them) and/or that TwistDX could be a ‘branch, agency or other establishment’ of Abbott Laboratories. 

Additionally, the EAT found that it was reasonably arguable that the ET had jurisdiction over the claims against the U.S.-based individuals on the basis that at least one of the Respondents in the proceedings resided or carried on business in England and Wales; one or more of the act complained of took place in England and Wales; and/or the claim related to a contract under which the work was performed at least partly in England and Wales. 

Accordingly, the application to strike out the claims was dismissed, and the matter will continue to a substantive hearing. This case will no doubt be of significant interest to U.S. organisations with UK-based employees.

Changes to Paternity Leave and Statutory Flexible Working Requests

Paternity Leave

Recent changes to statutory paternity leave came into force on 8 March 2024. The main changes are as follows:

• Employees can now take their statutory paternity leave any time in the first 52 weeks after the birth or adoption of the child (rather than within the first eight weeks, as was previously the case).
• Employees can now choose whether to take their two weeks’ statutory paternity leave as one two-week block or two one-week blocks.
• Employees now need only inform their employers of the dates of their leaves at least 28 days before each period of paternity leave, rather than before the ‘qualifying week’ (the 15th week before the baby is due). 

Flexible Working Requests

The statutory flexible working request regime was expanded on 6 April 2024. The main changes arising from this are as follows:

• The requirement to have 26 weeks’ service has been removed, so that employees can now make a flexible working request from ‘day one’ of their employment.
• Employees can now make up to two flexible working requests within a 12-month period (an increase from the previous limit of one).
• Employees no longer need to explain the potential effects of their request and how this could be dealt with by the employer.
• It is now a mandatory requirement for employers to consult with employees prior to any rejection of a request.
• Crucially, employers now have only two months (rather than three) from the date of the request to respond to the request (including any appeal process).