What Will a Burnham Administration Mean for Employment Law?

Congratulations to Andy Burnham, mayor of Manchester, for winning the Makerfield by-election overnight. It now seems inevitable that he will challenge Sir Keir Starmer for the leadership of the Labour Party and, if everything is to be believed, shortly become the sixth Prime Minister of the UK since the Brexit vote of 2016.

It is widely believed that this would mean be a more populist left leadership within the Labour Party.  So, what would this mean for employment law in this country if there is now the predicted lurch to the left?

One of the central tensions for a Burnham administration to resolve will be between the (stalled) growth agenda and the introduction of new laws and taxes which have undermined that very agenda. This has included the introduction of higher national insurance contributions (a direct tax on employers), but also the introduction of a swathe of new employment law rights under the 2025 employment rights act (ERA).

The most radical changes to ERA have already been announced, and that is the reduction from 2 years to 6 months for the qualifying limit for unfair dismissal and, perhaps more importantly, the removal of the cap for unfair dismissal awards, which is bound to make cases more difficult to settle.

All of this will have a huge adverse effect on the already crippling backlog of employment tribunal cases which have been well-publicised by our trade organisation ELA, as well as others.

However, much is still to play for. In the last few weeks, the government has announced a consultation to reform zero-hours and similar contracts. This affects not just “zero-hours” workers but also all agency workers.

When the new ERA was introduced, BEIS assessed the proposed changes to zero-hours contracts as being the most costly, or impactful, on employers of all the changes (including those relating to increased unfair dismissal rights).

A new (left-leaning) Burnham administration needs to be careful about making the UK labour market more sclerotic. One of the great benefits of the UK labour market in recent decades has been its flexibility. By enabling a more fluid entry into the workforce, we have historically had lower levels of youth unemployment than our main European competitors.

However, the government is now seriously concerned, for the first time, about the barriers into the labour market for graduates and other younger workers. Alan Milburn has recently done a lot of work highlighting the dangers of the Neets and is in the process of conducting a lengthy consultation and review into this.

The acid test on how committed Andy Burnham will be to the improvement of the fate of the Neets, and the employability of young workers, will be the extent to which the government implements the consultation in relation to the reform of zero-hours and similar contracts.

Much has yet to be assessed.

For example, what are the guaranteed hours to be worked during a “reference period”? The government prefers a 12-week initial reference period but is consulting on 26-week and 52-week alternatives. It is obvious that the longer the reference period, the more pro-employer that assessment will be. The government also seeks feedback on the length of subsequent reference periods and whether they should begin immediately after the reference period or whether there should be more of a pause.

Workers must have worked with “sufficient regularity” during the reference period to benefit from the right.

The consultation presents two options in this regard: either a) a weekly distribution requirement – the worker must have worked in a minimum number of weeks during the reference period – or b) a weekly distribution requirement plus total hours requirement, where the worker must have worked both a minimum number of weeks and a number of hours above their contracted hours. Obviously, option B is more pro-employer friendly than option A.

The real danger here is the right to create a guaranteed hour obligation on employers who might have engaged “zero-hours” workers for a period previously. For example, is there an obligation on a fruit picking company in Kent, who may have engaged workers between June, July and August in a given year (presumably at a relatively high number of hours), to offer the same guaranteed number of hours for the following 3 months?

On the basis of the government’s consultations, that would appear to be the direction of travel, and yet any sensible reading of the regulations would clearly indicate that that would be unworkable.

There are separate provisions about the reasonable notice of shifts and how much notice would be presumed reasonable. For directly engaged workers, options are 1 week, 2 weeks, 3 weeks and 4 weeks. For agency workers, options also include 5 days or less. But how realistic is this in practice with an “on demand” working culture? The author represents agency supply companies filling shifts in the NHS at a few hours’ notice.  Again, the longer the notice of shift required, the more onerous on the employer.

There are further provisions proposed in relation to payment for shifts that are cancelled, moved or curtailed at short notice, and those are up for grabs in terms of where the consultation lands. Again, proposals have options of 10% to 80% depending on the level of “fine” for the employer.

One can see from these proposed changes, which have yet to be determined by the government, that the way any Burnham government rules on these consultations  will be indicative of how pro-employer friendly these changes will be or how “pro-worker.”

The author’s view is that this is one area of the law where the interests of the employers and the workers are strategically aligned. It is in everyone’s interests for the UK to have a flexible labour market to facilitate young workers and flexible workers into the labour market. To do otherwise would further undermine Labour’s stalled growth agenda. Any Burnham administration should use the consultation in relation to the zero-hours proposals as a litmus test for how flexibly it intends to run the UK economy.