The Employment Law Election? Work and pay the campaign spotlight

The general election is almost upon us and, if you have not already made your mind up about who to vote for and think that their approach to employment / HR issues will seal the deal for you, then look no further!

Rebecca Cairney, Principal Associate, explores the manifestos of four of the ‘main’ parties, commenting on the key employment take aways for Labour, the Conservatives, Reform UK and the Liberal Democrats.

Labour

Labour have promised to introduce new legislation within 100 days of taking office. Given the huge amount of employment issues they want to address, this is an enormous task to take on. It is worth noting that Labour have also committed separately to consulting on those matters with both businesses and unions before passing any new legislation, which suggests that the commitment is to publish draft legislation, rather than change the law, within that tight timeframe.  

Equality and discrimination

Turning firstly to discrimination, Labour proposes to introduce the concept of ‘dual discrimination’ in the Equality Act 2010. As it stands, if an individual wants to present a claim alleging discrimination because of, or related to, 2 protected characteristics, then they must present them as 2 separate ‘issues’ within the same claim, and there is the potential for a different tribunal finding on each. Dual discrimination would mean that an individual could allege differential treatment on the grounds that they have two protected characteristics (e.g. ‘I was treated differently because I am a married woman’).

Labour also wants to introduce a Race Equality Act, that is intended to mirror the rights afforded to women under equal pay rules, but based on ethnicity. We could also see the introduction of new obligations on ‘large’ employers to produce ethnicity and disability pay gap reports, alongside the current requirement to produce gender pay gap reports.

Finally, there is a suggestion that employers with more than 250 employees will need to create a ‘menopause action plan’ to set out how they will commit to supporting women in the workplace who are going through the menopause.

Contractual matters

Labour coming into power would also likely see several current employment practices being curtailed. The manifesto suggests that ‘exploitative’ zero-hours contracts would be banned, and employees would see the introduction of a right to hold a contract which reflects the hours they regularly work, based on a 12-week reference period.

Originally proposed by the Conservatives in their ‘Good Work Plan’, Labour want to move forwards with the proposal to establish a single enforcement body with the authority to enforce workers’ rights. Little detail is provided but the previous proposals in June 2021 sought to encompass HMRC National Minimum Wage Enforcement, the Gangmasters and Labour Abuse Authority and the Employment Agency Standards Inspectorate into a single body. Labour also proposes to introduce a new single status of ‘worker’ that encapsulates all but the self-employed.

It shouldn’t come as any surprise that Labour also intends to bring an end to ‘fire and rehire’ practices, which have been prevalent in the news over the last 12-18 months. However, they have not gone as far as to suggest an outright ban, bringing into question what regulatory measures might be brought in instead.

Trade unions

There are a significant number of changes that Labour, perhaps unsurprisingly, want to make to trade union recognition, collective consultation and industrial action, summarised as:

• Removing the requirement that 40% of individuals entitled to vote must vote for a ballot to be valid;
• A review of the requirements for collective consultation, including making the requirement dependant on the number of redundancies across the business as a whole, rather than the current test relating to the number of redundancies at each ‘establishment’;
• Removing the requirement for fully postal ballots for industrial action;
• Reversing the changes made under the Trade Union Act 2016 (which included increased turnout, information and notice requirements);
• Abolishing the Strike (Minimum Service Levels) Act 2023;
• Allowing unions access to workplaces for the purposes of recruitment;
• Requiring section 1 statements to inform new employees of their right to join a union; and
• Allowing collective bargaining across sectors, so that any agreements would be binding on all employees within those sectors.

Other

The manifesto refers to the introduction of a ‘Day 1 right’ to sick pay, parental leave and eligibility to claim unfair dismissal, although it does stress that there may be greater emphasis on probationary periods as a result. Also of note is the suggestion that the time limit to present most employment tribunal claims will be increased from 3 to 6 months.

Finally, Labour have stated they will introduce a ‘right to switch off’ (or, at least a right to discuss switching off with employers) and making flexible working the ‘default’ unless employers have good reason to refuse it.

Commentary

Many of these changes are ‘employee friendly’ and have the potential to increase costs for employers (especially increasing the time limit for tribunal claims and allowing unfair dismissal as a day 1 right).

Labour’s commitments (on employment rights alone) are far-reaching and it remains to be seen (if the party does come to power later this week) how much of this agenda a new government will actually be able to get through in 100 days. There is also little detail as to how exactly some of these changes will be implemented; for example what, in practice, might replace the widespread practice of ‘fire and rehire’ if this becomes unlawful.

For further discussion of Labour’s employment law proposals see our website here: Labour’s new deal | Weightmans

Conservatives

In stark contrast (again, perhaps unsurprisingly) the Conservative manifesto, places very little focus on employment / HR rights at all.

Equality and discrimination

The Conservatives propose to amend the wording of the Equality Act 2010, which they suggest is now outdated, to include a new definition of ‘sex’ to mean biological sex.  This is intended to signal a commitment to the provision of single-sex services, citing the importance of women’s safety and privacy. The party wants this approach to be consistent across the UK.

Furthering the war on a ‘sick note culture’, the Conservatives have committed to a reform of disability benefits, which would see a shift in responsibilities from GPs to specialist work and occupational health professionals in the issuing of Fitness for Work Certificates.

Contractual matters

In May 2023 the Conservatives announced an intention to reform restrictive covenants in employment contracts. The party stated that ‘when parliamentary time allows’ a cap of 3 months on non-compete clauses would be introduced, in an attempt to increase competition and boost the economy. This is not mentioned at all within the manifesto, which may suggest that this is no longer a priority. We will wait to see if this issue resurfaces if the Conservatives win a further term of office.

Tax

If you have heard any of the televised debates in recent weeks, then it will come as no surprise that there is a clear focus within the Conservative manifesto on cutting taxes for working people; the party has pledged to not raise income tax or VAT.

Another Conservative proposal is to cut National Insurance to 6% by 2027 and abolish it completely for those who are self-employed. This might sound fantastic at first sight for self-employed business owners, but does in fact raise many questions. For example, if self-employed people have not contributed via National Insurance would they still be eligible to receive a state pension? Would this be at the same level as employed people who have ‘paid in’ to the state pension pot?

The manifesto is light on details as to where the extra funding would come from to account for these tax cuts.

Other

There is no mention of the proposal to re-introduce employment tribunal fees. A consultation closed earlier this year on a proposal to introduce a £55 fee for all employment tribunal claims (with a limited number of exceptions) and a separate fee (also of £55) for each appeal.

Commentary

The Conservatives have been keen to showcase their ‘employer-friendly’ credentials during their time in power, so it comes as little surprise that there is not a great deal of focus on employment rights within the manifesto. In fact, the absence of employment law in the party’s policy agenda has in itself attracted attention and prompted much commentary and speculation.

The Liberal Democrats

Equality and Discrimination

The Liberal Democrats propose to introduce a new protected characteristic under the Equality Act 2010 for carers. There is little detail as to the scope of this but presumably it would follow the definition in the recently introduced Carer’s Leave Act 2023. This would protect employees with dependants with long term care needs (including a spouse, civil partner, child, parent or someone living in the same household who reasonably relies on the employee for care).

Like Labour, the Liberal Democrats also want large employers to publish pay gap data on ethnicity and disability, but go a step further also calling for employers to publish data on any LGBTQ+ pay gaps, and also on progression. There is also reference to employers publishing a 5-year plan to address any pay / progression / diversity gaps.

Focusing on supporting disabled people in the workplace, the Liberal Democrats want to introduce  specialist ‘disability employment support’ (no details have been provided on what this means) and simplify the existing Access to Work scheme (which is likely to come as a welcome change to anyone who has requested support through the scheme previously). In addition, they propose to introduce ‘passports’ which would record any adjustments, specialist equipment or modifications an employee requires in the workplace, which would remain with them throughout their employment (whether with the same employer or elsewhere). Presumably there would be a requirement for this to be reviewed periodically. There is no notable detail available as to how transition between employers would be managed in terms of funding, continuing provision of specialist equipment or ongoing reasonable adjustments.

The party also proposes to extend the use of ‘name blind’ recruitment, to reduce the risk of any unconscious bias creeping in to processes through prospective new employers ‘guessing’ the age, sex, or ethnicity of a candidate.

Contractual matters

The Liberal Democrats want to introduce a new ‘dependent contractor’ status to fall somewhere between the current definition of an ‘employee’ and a self-employed contractor. The manifesto sets out that a ‘dependent contractor’ would have entitlements to basic rights such as sick pay and paid holiday. What is strange about this pledge is the lack of reference to the current definition of a ‘worker’ and how ‘dependent contractor’ status would differ. In addition, the party proposes to change the burden of proof in the employment tribunal so that it would be for employers to disprove that an individual is an employee / ‘dependent contractor’ / worker, rather than the individual having to prove their status, as currently.

There is also a commitment to increase the minimum wage for people on zero-hour contracts by 20% at times of ‘normal demand’ in order to compensate them for working uncertain hours.

In addition, the Liberal Democrats want to promote employee ownership of businesses by giving employees of listed companies (with +250 employees) the right to request shares. It is unclear what employer obligations would be in this scenario.

Other

From a family friendly perspective, the Liberal Democrats propose a reform to the ‘broken’ statutory sick pay system, making the payment a day-1 right and removing the lower earnings limit.

In addition, the party proposes that parental leave should also be a day-1 right and have called for statutory maternity/paternity pay to be doubled to £350 per week.

Finally, they want to introduce a month’s paid leave for new fathers/partners, paid at 90% of their salary on a ‘use it or lose it’ basis.

Commentary

No surprises here that the Liberal Democrats’ manifesto is employee-friendly as the party has traditionally positioned itself as socially progressive and championed work-life balance and flexibility. However, the party’s 2024 manifesto also seeks to appeal to employers, emphasising that ‘businesses and entrepreneurs should be supported to create worthwhile jobs in every part of the UK’. Although the Liberal Democrats are unlikely to be handed the keys to Downing Street this time round, their positioning on employment issues could prove very important as new legislation is introduced and new alliances are forged post-election.

Reform UK

A very quick summary of the Reform UK ‘contract’ (as the party refers to its manifesto) includes an overall general pledge to ‘scrap thousands of laws that hold back British business and damage productivity, including employment laws that make it riskier to hire people’, ‘scrap EU Regulations with immediate effect’ and ‘replace’ the Equality Act 2010 (referred to as ‘the Equalities Act’) due to it allegedly costing the economy billions of pounds and creating division, inequality and exclusion.

It is worth noting that there is no detail at all as to exactly which laws Reform UK are referring to, whether they would be replaced and, if so, what would take their place.

Whatever the outcome on 4 July, the remainder of 2024 and beyond will be fascinating for employment lawyers and HR professionals, with some polar-opposite pledges being put forward by the parties. Watch this space!