Labour Said It Would Make Work Pay. Will It?

    It was the biggest strike wave since Thatcher: 2022 saw trains parked in the depot, schools sat empty, and nurses swap hospital beds for picket lines. After a decade of stagnating wages, public sector pay freezes, and insecure work, brought into even sharper relief by the pandemic, the social contract was in tatters. Industrial action was everywhere, RMT general secretary Mick Lynch was running rings around Piers Morgan on TV, and slippery Tory ministers used the opportunity to heap scorn on the folk devil of “greedy” trade union bosses.

    Since then, things have changed. Labour came to power, and settled a raft of public sector pay disputes. The open antagonism between trade unions and the government has given way to an uneasy peace. But how long will it last?

    For all his championing of “working people” – a phrase that appeared 16 times in his speech at last year’s Labour Party conference – Starmer’s embrace has so far been more rhetorical than real. Cuts to the winter fuel allowance, a refusal to scrap the two-child benefit limit, and now a recommendation of an “insulting” 2.8% pay rise for public sector workers: all have put the leader on a collision course with organised labour.

    Keeping the peace is Labour’s big pitch to workers and trade unions alike: the employment rights bill. Currently making its way through the committee stage, it contains 28 reforms and forms part of the party’s promise to oversee the “biggest levelling-up of workers’ rights in a generation.” Much is at stake: the bill could improve the settlement for British workers or, if it falls short, leave the imbalance of power between employers and employees intact and set the stage for industrial disgruntlement to come.

    The bill will make employment rights available from day one, ending the qualifying periods required to access parental leave, sick pay, and unfair dismissal rights. Some – though not nearly all – anti-trade union legislation will be repealed. Gone is the restrictive ballot threshold that required 50% turnout set by the Trade Union Act 2016, as well as the Conservative Minimum Service Levels Act, that sought to essentially outlaw effective strike action across the public sector.

    Compared to the Conservatives’ scorched earth approach to all things industrial, trade unions have welcomed these reforms as a significant improvement on what came before. But with industrial relations and employment law having been under vicious attack for decades, it’s easy to overstate the extent of Labour’s employment overhaul. Rather than marking “any kind of revolution,” its passage would simply “push the UK back into the mainstream of other civilised OECD countries” Alan Bogg, professor of labour law at the University of Bristol, told the employment bill committee. “This bill seems as radical as it does only because the baseline is so low.”

    The consequences of that low baseline are everywhere to see. Workers in the UK have a raw deal: average wages now are only £16 a week higher than when David Cameron first took office. The 2010s saw an employment boom, but with little attention to or interest in the quality of those newly created jobs. Almost 60% of shift workers receive less than a week’s notice of their working hours. In the final two months of 2025, there were four separate industrial disputes about workers’ ability to simply access a toilet at work. 

    Watered down?

    This is the bleak world of work that the bill has to tackle if it’s going to improve working people’s lives. But even before it had reached parliament, the bill had been rolled back on. Developed by Andy McDonald in his role as shadow secretary of state for employment rights and protections, in conjunction with trade unions, the new deal for working people was ratified at the Labour Party conference in 2021 and 2022. The new deal was an ambitious and expansive document, drawing on decades of work by the Institute for Employment Rights. But since then, that document has been both diluted and rebranded, with the employment bill being based instead on Labour’s plan to make work pay. 

    When the employment bill was published on 10 October, much of the work of fully fleshing out the new set of employment rights was left to future secondary legislation and consultations. With so much still to be decided, there’s still plenty of time for trade unions and business groups to try and shape the bill.

    Employers sense that outright hostility to the bill won’t fly. They have instead reverted to deploying scare stories, prophesying mass job losses and company closures. Case in point: “putting most businesses off hiring,” “inflicting permanent damage on the economy,” and a “surge in company collapses.”

    But not everyone is having it. Speaking at the employment bill committee, Mick Lynch sardonically said there is no doubt that the Factories Act – the 1833 law that limited the hours young children could work – was “a bit burdensome for the mill owners and mining companies of this country.”

    Disappearing pledges.

    One of the most ambitious initial pledges of the new deal was its commitment to rolling out sectoral collective bargaining across the economy, via “the roll-out of Fair Pay Agreements.” At the end of the second world war, 86% of all workers were covered by a collective agreement, where industry minimums determined pay and conditions. These agreements would “form a floor across industries.” That pledge has disappeared, with the proposals now applying only to adult social care and school support staff.

    A promise to reform public procurement, whereby government contracts would go to companies that “treat their workers well, recognise trade unions and have provision for collective bargaining arrangements,” has been dropped from the employment bill. 

    Instead, Labour says it will be implemented by a specific procurement bill, but the king’s speech made no mention of such a bill, and unions fear the policy has been kicked into the long grass. This is bad news for workers, like those at Amazon, who hoped they’d be able to leverage lucrative government contracts to secure recognition.

    Despite Labour’s election promise to oversee “the biggest wave of insourcing of public services in a generation,” there’s been no movement on ending outsourcing. Ironically, as the employment bill committee has been meeting, outsourced workers across government departments have been taking industrial action over their outsourced status.

    Facilitating fire and rehire.

    The banning of fire and rehire practices has survived, but there are concerns over whether it  is robust enough to protect workers. Under Labour’s current proposal, employers are allowed to fire and rehire if they can demonstrate that “they were facing financial difficulties that threatened their viability, and that changing the employee’s contract was unavoidable.”

    Professor of public law at King’s College Keith Ewing has warned that allowing an economic justification for fire and rehire means the legislation as it stands is not “ending fire and rehire [but] is facilitating fire and rehire.”

    The new deal pledge to “ban zero hours contracts” has now become a promise to ban “exploitative zero hours contracts.” Under the proposal, workers would have the right to a contract that reflects their regular hours. But there’s concern that the definition of “exploitative” might be drawn up excessively narrow, leaving zero hour contracts broadly in place.

    In the original new deal, Labour promised to award “wages for any shifts cancelled without appropriate notice being paid to workers in full.” That pledge has been weakened, now only promising to provide “compensation that is proportionate to the notice given for any shifts cancelled or curtailed.”

    Crucially, many of the reforms being introduced hinge on the question of employment status, with day one rights, the right to request flexible working, and protection against “exploitative” zero-hour contracts only applying to those employed. 

    While the new deal expressly committed to moving “towards a single status of worker and transition towards a simpler two-part framework for employment status,” worker status is now going to be subject to a “full and detailed consultation”. But union experts have asked what is left to consult on, given that Labour have been discussing this topic for years, and have already supported two backbench bills on this exact subject.

    Without quickly clarifying who is entitled to employment rights, Labour risks simultaneously expanding employment rights while incentivising employers to classify workers in such a way that exempts them from benefiting from these new protections.

    Polly Smythe is Novara Media’s labour movement correspondent.

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