Retail & Leisure: a summary of Labour’s potential changes on the sectors

Business taxation and compliance 

Cap corporation tax at 25% for the entire parliament. 

Retain permanent full expensing for capital investment and the annual investment allowance for small businesses. 

Replace business rates in England with a revenue-neutral system that levels the playing field between online and high streets. 

Labour’s manifesto fiscal plan includes £855m towards investment into HMRC compliance activities with the addition of 5,000 staff. Higher enforcement activity from HMRC is expected following this investment, albeit gradually over time.  

Public health 

Introduce a generational ban on purchasing tobacco products by carrying through the Conservative administration’s proposals. The aim is to create the first ‘smoke-free’ generation by legislating to ensure that children aged 15 or under in 2024 can never legally be sold tobacco.  

Further protect the health of children and young people by introducing bans on vapes being branded and advertised to appeal to children, advertising junk food to children, and selling high-caffeine energy drinks to under 16s. 

Employment  

Provide a National Minimum Wage that reflects the cost of living; currently NMW rates are based on average wages rather than how much things cost. Labour will also remove the age bands NMW so that all adults are paid the same regardless of their age. 

Remove the qualifying period for unfair dismissal claims, meaning a reduced ability to dismiss newer workers. Labour has previously stated that the changes will not prevent fair dismissal and will ensure that employers can operate probationary periods to assess new hires. However, the changes will help to ensure that newly hired workers are not fired without reason or cause.  

End the practice of ‘fire & rehire’, meaning that employers will be unable to adopt this practice as a way of cost saving/restructuring, and may face fines or be ordered to pay compensation when they do. However, Labour has acknowledged the importance of businesses being able to restructure to remain viable, and to preserve their workforce and the company when there is genuinely no alternative. However, this must follow a proper process based on dialogue and common understanding between employers and workers. This suggests that there may remain some scope for retaining a ‘fire & rehire’ option in critical circumstances.  

Labour has pledged to reform the UK’s ‘three-tier’ employment status structure where staff are classified as ‘employee’, ‘self-employed’ or an intermediate category of ‘worker’. It is proposed to replace these categories with a ‘single status of worker’, contrasted with the genuinely self-employed and ‘transition towards a simpler two-part framework for employment status’.  

Provide workers with predictable hours and work by introducing a new duty on employers to provide a contract based on the hours worked in the proceeding 12-week period. Labour has confirmed that this will not impact seasonal or fixed-term contracts, still providing employers within the sector the ability to increase their staff numbers during peak times of the year, such as Christmas and school holidays.  

There is also a commitment to end the ‘one-sided flexibility’ of ‘exploitative’ Zero Hours Contracts which do not guarantee staff minimum hours of work and allow work to be withdrawn at short notice. This will not be the outright ban of Zero Hours Contracts envisaged in Labour’s 2019 manifesto, but will comprise measures, yet to be confirmed, to prevent their misuse.  

Legislate that all tips go to employees. The Employment (Allocation of Tips) Act 2023, introduced by the Conservative Government, appears to have Labour support and is expected to come into force on 1 July 2024. The new law will make it unlawful to withhold tips from workers, and introduce several changes to tipping practices in the UK. The Act will be supported by a statutory Code of Practice.  

Make Statutory Sick Pay more accessible. It is suggested that SSP may become a ‘Day 1’ right and may somehow be extended to the self-employed.  

Extend employment tribunal limitation dates from three months to six months to make it easier for employees to bring claims. However, it should be noted that, even currently, many claims are successfully brought outside the tight three month timeframe as employment tribunals have broad discretion to extend the limitation period where appropriate.  

Again, introduced by the outgoing Conservative administration, the Worker Protection (Amendment of Equality Act 2010) Regulations 2023 will come into force on 26 October 2024, creating a positive “duty on employers to take reasonable steps to prevent sexual harassment of their employees in the course of their employment”. Employers will need to have robust policies and arrangements in place to demonstrate that action is being taken to protect staff.  

Looking at discrimination law, Labour’s headline proposal is to extend equal pay legislation, which currently only covers gender pay disparities, to cover the protected characteristics of race and disability. It’s not clear how this will work in practice. Compulsory reporting of ethnicity and disability pay gaps is also on the cards, (to supplement the current obligation to report on the gender pay gap).  

Family   

Make parental and shared parental leave a ‘Day 1’ right; currently, 26 week’s continuous service is required to qualify for leave. It is also anticipated that statutory pay for maternity, paternity and shared parental leave will significantly increase.  

Legislation which introduced carer’s leave in April 2024 will be reviewed. Employees are currently entitled to one week in any 12-month period to support a relative with ongoing care needs. Crucially, this leave is currently unpaid but Labour may potentially legislate to introduce paid leave.  

Implement the right to bereavement leave for all workers. Currently, statutory bereavement leave is only available to parents who have lost a child.  

Health and Safety  

Labour’s “Plan to Make Work Pay: Delivering a New Deal for Working People” will see a strengthening of workers’ rights and a review of health & safety law alongside unions, with a focus on protecting the long term physical & mental health of employees.  

As part of this, there is a suggestion of a right to ‘switch off’ from a 24/7 working environment, which in reality may be used to support claims for stress/harassment in the workplace against employers and their staff who fail to observe it. If anything, more, not less, ‘red tape’ for employers is anticipated. 

Labour has committed to ensure the safety of retail workers by creating a stand-alone criminal offence in respect of violence toward retail workers, to follow The Protection of Workers Scotland Act 2021. 

Labour’s Employment Rights Green Paper proposes a single enforcement body to make up for the perceived shortcomings of the HSE and local authority intervention. The suggestion is that this new body may have more funding and more power, thereby supporting increased intervention against offending employers for breaches of health and safety. 

Leasehold reform

Labour pledged in its pre-election manifesto to make key changes and improve conditions for leaseholders to bring the feudal leasehold system to an end.” The Conservatives had already passed legislation in the Leasehold and Freehold Reform Act 2024, with changes to banning the grant or assignment of certain residential leases and the regulation of permitted leases, the right to replace rent with a peppercorn rent, the right to manage and limitations on service charges, but most of this requires secondary legislation. 

It remains to be seen whether Labour enacts the secondary legislation, repeals it or replaces it entirely. This will not happen immediately as it is not in Labour’s “First Steps”. 

Conclusion  

Businesses are best advised to look at their working arrangements, consider their products/services, keep up to date with legislative requirements and seek support from legal professionals.  

Weightmans LLP has a dedicated Retail & Leisure Team, with specialists to support your business needs and offer a comprehensive advice.