In this article, Senior Associate, Tina Maxey provides an overview of some of the key policy statements and pledges made by the main political parties.
After the general election it is expected the new Parliament will meet on 9 July 2024, with a state opening on 17 July 2024.
Conservative Party
The Conservative Party manifesto 'Clear Plan, Bold Action, Secure Future' is light on employment-specific proposals, but it promised to "retain the flexible and dynamic labour market that gives businesses the confidence to create jobs and invest in their workforce".
The manifesto includes the following pledges:
Apprenticeships
It would fund 100,000 more apprenticeships in England in every year by the end of the next Parliament, paid for by closing university courses with poor outcomes for students.
Diversity, equality and inclusion
Under the Equality Act 2010 someone's 'sex' is a protected characteristic. The Conservatives have said that it will legislate to clarify that 'sex' means 'biological sex'.
Sickness
The 'fit note' system will be overhauled which would move the responsibility for issuing fit notes from GPs to other healthcare professionals. It would be integrated with a new WorkWell service to provide tailored support to help people return to work.
Pay and Tax
The National Minimum Wage will be retained at the current level of two thirds of median earnings in the next parliamentary term. Using current forecasts that would mean rising to £13 per hour (currently £11.44).
It would also continue to lower National Insurance contributions, with a reduction to 6% from 2017.
Trade Unions
As expected, the Conservates would continue with the implementation of minimum service level agreements, which is says will limit the impact of industrial action on public services.
National service
All school leavers aged 18 would be required to complete a period of mandatory National Service. There would be a choice of taking up a paid competitive placement in the armed forces or cyber defence or carrying out the equivalent of one weekend per month (25 days in the year) volunteering in the community, e.g. NHS responder, special constable or RNLI volunteer.
Labour Party
There is a lot of information in the public domain on Labour's proposals for wide-ranging reforms to employment law.
The Labour Party's election manifesto confirms that it would implement 'Labour's Plan to Make Work Pay: Delivering a New Deal for Working People' (New Deal) in full and would introduce legislation reforming employment law within the first 100 days of entering office.
The key pledges are as follows:
Zero-hours contracts
Labour commits to ending one-sided flexibility and ensuring that all jobs provide a base-line of security and predictability by banning 'exploitative' zero-hours contracts and ensuring workers have the right to a contract which reflects the numbers of hours they regularly work, based on a twelve-week reference period, and reasonable notice of changes to shifts or working time, with compensation which is proportionate to the notice given for any shifts cancelled or curtailed.
No detail is given on how this will work in practice. However, the change will restrict the flexibility of both employers and workers and is likely to increase business costs and challenges in industries where staffing demands fluctuate, a prime example being the hospitality sector.
Employers will still be able to offer fixed term contracts, including those for seasonal workers.
Dismissal and re-engagement
Ending 'fire and rehire' as a lawful means of changing terms and conditions of employment. There will not be an outright ban as it accepts that where there is genuinely no alternative, businesses must be able to restructure to remain viable. However, it considers that an employer must "follow a proper process based on dialogue and common understanding between employers and workers". Details are unknown, but it could make it harder for employers to change terms and conditions of employment.
The law will be reformed to provide effective remedies against abuse.
Day one rights
Introducing a day-one right to sick pay, parental leave, and more significantly unfair dismissal. The New Deal document indicates that probationary periods will have a special status so that employers can assess new hires.
The shortest service requirement for being protected from unfair dismissal since unfair dismissal rights were introduced in 1971 is six months.
It is not known what steps employers will need to take to dismiss those who are still within their probationary period, save that changes introduced by the New Deal state that fair and transparent rules and processes will need to be followed and that new hires are not dismissed without cause. This might be akin to the processes employers need to follow currently when dismissing those with at least two years' service. This is likely to make employers more wary when recruiting.
The change to the qualifying period will inevitably significantly increase the number of tribunal claims.
Redundancy
The New Deal states that redundancy rights will be strengthened, giving the example of making collective redundancy consultation requirements dependent on the number of redundancies across the whole business rather than the number at each 'establishment' or workplace as is currently the case. This will increase the number of redundancies which trigger the need for collective redundancies and might cause headaches for employers in managing and keeping track of multi-site redundancies.
The wording of the New Deal suggests other changes will be introduced, but it does not provide any detail.
Family-friendly rights
In addition to the day-one right to parental leave (as mentioned above), the New Deal states that:
- a right to unpaid bereavement leave would be introduced (currently only available following the death of a child);
- it would be unlawful to dismiss a woman during her pregnancy and within six months of her return, save in specified circumstances. It does not say what those circumstances would be;
- the introduction of paid carers leave would be examined; and
- flexible working would be a default right unless employers have a good reason to refuse it.
Right to disconnect
A new right to "switch off" would be introduced (or, at the very least, the right for workers to discuss switching off with their employer), so that workers can disconnect from work outside of working hours and not be contacted by the employer. Similar models would be followed that are already in place in Ireland and Belgium.
Wages
Altering the criteria for determining the national minimum wage to include consideration of the cost of living and removing the age bands, so all adults are entitled to the same minimum wage. This is going to increase costs for employers and could result in reductions to staff headcount in industries which rely on younger workers.
Statutory sick pay
The lower earnings limit would be removed so that statutory sick pay is available to all workers. The three-day waiting period would also be removed. Again, this would increase costs for employers.
Diversity, equality and inclusion
There are several commitments in the New Deal in the areas of equality and diversity, including:
- Strengthening the sexual harassment regime, so that employers will be required to create working environments free from harassment, including harassment from third parties.
Employers will be under a more proactive duty to prevent sexual harassment in the workplace, created by the Worker Protection (Amendment of Equality Act 2010) Act 2023, which had been expected to come into force in October 2024, although Labour's commitment goes further, in that harassment would also cover harassment from third parties, which will be more challenging for employers to meet. It also seems likely that those who complain about sexual harassment will be automatically treated as whistleblowers.
- The publication of ethnicity and disability pay gaps will be made mandatory for employers with more than 250 staff, to mirror the gender pay gap reporting. The latter will be problematic; it is not clear how reporting will be meaningful as there is currently no consensus around how to ask about or define disabilities.
- Employers with more than 250 staff will be required to publish Menopause Action Plans, setting out how they will support employees going through the menopause. Many employers already have these in place.
Employment tribunals
The time limit to bring a claim would be increased from three months to six months. We consider that this will likely increase the number of claims at tribunal, although on the plus side, for employers who want to explore settlement, it will give them more time to do so.
Trade Unions
There will be a raft of measures surrounding trade union rights and recognition, which include:
- a requirement for terms and conditions of employment issued to all new starters to inform staff of their right to join a trade union;
- the reversal of the changes made under the Trade Union Act 2016 (which increased required turnout for ballots, added more required information for ballot papers, limited strike mandates to six months and required two weeks' notice to be given of a ballot for industrial action rather than one);
- simplify the process for trade union recognition and lower the threshold to get it. The current requirement that 40% of those entitled to vote on recognition need to vote in a ballot for it to be valid for recognition will be removed, as will the requirement for a union to show that at least 50% of workers are likely to support recognition for the process to begin. Labour would grant recognition to a union if it gains a simple majority vote in a statutory ballot. Thus, it will make it easier for unions to gain recognition.
- abolishing the Strikes (Minimum Service Levels) Act 2023;
- removing the requirement for fully postal ballots for industrial action;
- a right for trade unions to access workplaces for recruitment and organising purposes.
Liberal Democrats
The Liberal Democrats election manifesto 'For a Fair Deal' employment pledges include:
Apprenticeships
Apprenticeships would be boosted by removing the lower rate apprenticeship pay (currently £6.40 per hour) and guaranteeing at least the National Minimum Wage rate.
Equalities
Caring would be made a protected characteristic under the Equality Act 2010, and employers would be required to make reasonable adjustments to enable employees with caring responsibilities to provide care. This will probably not be as straightforward as it seems.
It would also introduce paid carer's leave.
Zero-hours contracts
An entitlement to 20% higher minimum wage at times of 'normal demand', as compensation for fluctuating hours. Zero-hours workers would also be given the right to request fixed hour contracts after 12-months which will not be able to be unreasonably refused.
Family-friendly rights
The Liberal Democrats have proposed a radical overhaul of the family rights framework. It would, amongst other things:
- introduce paid neonatal leave;
- make parental leave a day-one right and extend them to self-employed parents;
- increase statutory maternity and shared parental pay to £350 a week (currently £184.03 per week);
- introduce pay for paternity leave to 90% of earnings (which would be capped for higher earners) – the current prescribed rate is capped at £184.03 per week. Fathers and partners would also be given an additional month of leave (on a 'use it or lose it' basis), paid at 90% of salary (again subject to a cap);
- large employers would be required to publish their parental leave and pay policies.
Further, when public finances allow, the Liberal Democrats would offer parents six weeks of leave per parent paid at 90% of earnings and 46-weeks of parental leave that can be shared between themselves as they choose, paid at double the current statutory rate.
Pay and tax
In this area, the Liberal Democrats have said it:
- will seek to improve the National Living Wage by establishing an independent review to recommend a genuine living wage;
- give staff in listed companies with more than 250 employees the right to request shares to promote employee ownership; and
- when public finances allow, it has pledged to raise the tax-free personal allowance.
Equality, Diversity and Inclusion
The Liberal Democrats would:
- require large employers to publish data on gender, ethnicity, disability, and LGBT+ employment levels, pay gaps and progression, and publish five-year aspirational diversity targets. It is not clear how 'large' will be defined or what the specific reporting requirements will be;
- making it easier for disabled individuals to access work by introducing 'Adjustment Passports' to record the adjustments, modifications and equipment a disabled person has received, and ensure that Access to Work support and equipment stays with the person if they change jobs;
- every disabled person would have the right to work from home, unless there are "significant business reasons" why it cannot be accommodated. It is unclear what the 'significant business reasons' could be relied on but appears to be higher than the current threshold on the statutory grounds for refusing a flexible working request.
- extend the use of name-blind recruitment processes.
Sick pay
Like Labour, the Liberal Democrats would make statutory sick pay a day one right, by removing the waiting period. The lower earnings limit would also be removed.
It has said that the statutory sick pay rates would be aligned with the National Minimum Wage, and it would support small employees with the cost. Although this would be subject to consultation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.