Labour will boost pay and productivity to ensure economic growth felt by working people
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The Labour Government will unveil details of the biggest boost to
pay and productivity in the workplace in a generation today
(Thursday). Delivering on its manifesto commitment to introduce new
regulations within 100 days of taking office, the government's plan
to Make Work Pay will set out new measures to secure economic
growth by making work pay and making our economy more productive.
The move is expected to provide the groundwork for a boom to the
economy – and...Request free trial
The Labour Government will unveil details of the biggest boost to pay and productivity in the workplace in a generation today (Thursday). Delivering on its manifesto commitment to introduce new regulations within 100 days of taking office, the government's plan to Make Work Pay will set out new measures to secure economic growth by making work pay and making our economy more productive. The move is expected to provide the groundwork for a boom to the economy – and ahead of the Government's International Investment Summit next week, shows how Labour is changing our country's story to one of growth, opportunity, and optimism. The Summit will showcase how Labour is creating the conditions for confident investment through trusted partnership with business. Political stability under Labour means investors are looking again at Britain, with plans for a modern industrial strategy offering the partnership businesses want, and providing the platform for economic growth which will benefit working people across the country. The Employment Rights Bill will be laid before Parliament on Thursday. As set out in the Labour's manifesto, the Deputy Prime Minister and Business Secretary will create a new partnership between business, trade unions and working people – underpinning our growth mission. Getting the labour market moving again is essential to economic growth with one in five UK businesses reporting staff shortages. Flexibility, for workers and businesses alike, is key to answering this challenge and is at the heart of the legislation to upgrade the law to ensure it is fit for modern life and a modern economy. The existing two-year qualifying period for protections from unfair dismissal will be removed, delivering on the manifesto commitment to ensure that all workers have a right to these protections from day one on the job. This is set to benefit nine million people that have been with their employer for less than two years. The government will also consult on a new statutory probation period for companies' new hires. This will allow for a proportionate assessment of an employee's suitability to a role as well as reassuring employees that they have rights from day one, enabling businesses to take chances on hires with a lighter touch process while giving more people confidence to re-enter the job market or change careers, improving their living standards. The bill will bring forward 28 individual employment reforms, from ending exploitative zero hours contracts and fire and rehire practices to establishing day one rights for paternity, parental and bereavement leave for millions of workers. Statutory sick pay will also be strengthened, removing the lower earnings limit for all workers and cutting out the waiting period before sick pay kicks in. These changes will help more than one million people on zero hours contracts who will gain guaranteed working hours if they want them, boosting their job security. An extra 30,000 fathers or partners that will be brought into scope for paternity leave, while an additional 1.5 million parents will gain flexibility with unpaid parental leave becoming a right from day one. Accompanying this will be measures to help make the workplace more compatible with people's lives, with flexible working made the default where practical. Large employers will also be required to create action plans on addressing gender pay gaps and supporting employees through the menopause, and protections against dismissal will be strengthened for pregnant women and those returning from maternity leave. This is all with the intention of keeping people in work for longer, reducing recruitment costs for employers by increasing staff retention and helping the economy grow. A new Fair Work Agency bringing together existing enforcement bodies will also be established to enforce rights such as holiday pay and support employers looking for guidance on how to comply with the law. It comes against a backdrop of the new government inheriting a battered economy from the Conservatives who presided over ‘strike Britain' – with more than twice as many days lost to industrial action than France under Rishi Sunak's premiership. New analysis shows that the Tories' scorched-earth approach to strikes over the last two years stung the economy by £3.3 billion in lost productivity, including £1.7 billion from NHS industrial action alone. If that trend continued for another term of Conservative government, the UK would have been projected to lose 13.5 million working days, costing the economy just short of £5 billion in lost productivity. The dire inheritance shows the new Labour Government's approach to settling industrial disputes with doctors, nurses, and rail workers, while readying measures to further stabilise the economy with its workers' rights overhaul, are the right course of action. This pro-business, pro-worker Labour government is the only party talking about economic growth. The Chancellor's Budget in a few weeks' time will continue to show a decisive break from the previous 14 years of economic failure under the Conservatives. The government's Make Work Pay plan ushers in a new era that empowers working people so that benefits are felt in people's pockets across the country. Angela Rayner MP, Deputy Prime Minister, said: “This Labour Government's plan to make work pay is central to achieving our growth mission, boosting productivity. After years of stagnation under the Tories, we're replacing a race to the bottom with a race to the top, so employers compete on innovation and quality. “It's by making work more secure and modernising workplaces that we will drive up productivity, improve living standards, generate jobs and investment, and pave the way for sustained economic growth that benefits working people. “We're calling a time on the Tories' scorched earth approach to industrial relations. A new partnership of cooperation between trade unions, employers and government will put us in line with high-growth economies that benefit from more cooperation and less disruption.” Jonathan Reynolds MP, Business Secretary, said: “It is our mission to get the economy moving and create the long term, sustainable growth that people and businesses across the country need. Our plan will give the world of work a much-needed upgrade, boosting pay and productivity. “The best employers know that employees are more productive when they are happy at work. That is why it's vital to give employers the flexibility they need to grow whilst ending unscrupulous and unfair practices. “This upgrade to our laws will ensure they are fit for modern life, raise living standards and provide opportunity and security for businesses, workers and communities across the country.” Ending one-sided flexibility The legislation will level the playing field where all parties understand what is required of them and good employers aren't undercut by bad ones. The bill will end exploitative zero hours contracts, following research that shows 84 per cent of zero hours workers would rather have guaranteed hours. They, along with those on low hours contracts, will now have the right to a guaranteed hours contract if they work regular hours over a defined period, giving them security of earnings whilst allowing people to remain on zero hours contracts where they prefer to. According to TUC research nearly two thirds of managers (64 per cent) believe ending zero hours contracts would have a positive impact on their business. Ending unscrupulous employment practices is a priority for this government and none more so than shutting down the loopholes that allow bullying, fire and rehire, and fire and replace to continue. The government is closing these loopholes and putting in place measures to give greater protections against unfair dismissal from day one, ensuring that the feeling of security at work is no longer a luxury for the privileged few. This bill turns the page on the previously ineffective, costly and conflicting approach to dealing with industrial relations that has brought so much disruption to businesses and livelihoods. lt repeals the anti-union legislation put in place by the previous administration, including the Minimum Service Levels (Strikes) Act legislation that failed to prevent a single day of industrial action while in force. Supporting working families Too many people find that the current system isn't compatible with the realities of everyday life, whether that's raising children or supporting a loved one with a health condition. The government wants to make sure that everyone can get on in work and not be held back because work isn't compatible with important family responsibilities. That is why the government will:
Beyond the bill The Make Work Pay Plan doesn't stop with this bill. Continuing to reform employment rights in line with changes to the economy and labour market is critical to maintaining growth, prosperity, and opportunity. As an outlook to the future, the government will also publish a Next Steps document today that outlines reforms it will look to implement in the future. Subject to consultations, this includes:
Ends Notes:
The UK lost nearly twice as many days to industrial action under Rishi Sunak's leadership than France:
o The UK lost 4,766,000 days to strikes between October 2022 and June 2024, equalling a monthly average of 226,952 days per month, which scaled up to 12 months is 2,723,428. o Another five more years of Tory chaos would have seen the UK lose 15 million working days. o Between 2012 and 2022 France lost 15,973,218 days total to strikes, so that is 1,452,110 per year (11 years).
Industrial action in the NHS alone cost the taxpayer £1.7 billion:
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