United Kingdom: General election – employment law and HR proposals

by Admin
July 4, 2024

In brief

The UK will have a general election on 4 July 2024, which will decide who the next government will be. The political parties have been publishing their employment and HR-related proposals, which we summarise in this article. We have limited ourselves to Labour, the Conservatives, Reform, the Liberal Democrats and the Green Party, as the current top-polling parties fielding candidates throughout Great Britain.

Between them, the various political parties propose significant changes to employment law in the UK.

Looking at Labour’s plans, their proposal to amend the threshold tests for collective redundancy consultation would likely mean that the duty to collectively consult would be triggered in many more cases than currently. In addition, as is the stated aim, their reforms to trade union laws would make trade union recognition and participation easier. The party has committed to legislate within 100 days of taking office, but will also consult fully in advance of passing legislation. This might prove to be a tight timescale. They have expressly said that the proposed review of parental leave would be in the first year of government.

If the Conservatives were to win the election, they propose to change the definition of sex in the Equality Act 2010 to align it to biological sex. This appears to be focused at service provision issues (such as single sex toilets) but it might have effects in the workplace too, and could conceivably influence the future trajectory of case law involving gender critical beliefs, which has been a hot topic in recent years. (See, for example, our earlier article Conflicts of belief in the workplace – forging a path.)

The other parties’ proposals include reviewing the IR35-related off-payroll rules (Liberal Democrats) through to scrapping the whole IR35 regime all together (Reform), and introducing a maximum 10:1 pay ratio (Greens).

It is clear that this general election could lead to a busy time for employment law and HR practitioners!

Labour

On 24 May, the Labour party published a Plan to Make Work Pay: Delivering A New Deal for Working People (New Deal). The party’s manifesto, published on 13 June, reaffirms their commitment to implement the New Deal.

Labour’s key proposals are:

Remove unfair dismissal qualifying periods. The right to not be unfairly dismissed is currently generally subject to a qualifying period of two-years’ continuous service. This is disapplied in some cases, for example if the reason for dismissal was that the employee blew the whistle. Labour proposes to remove this service criterion in all cases, making this a day-one right. The only exception they mention is for probationary periods: they will still be permitted but be subject to fair and transparent processes.
Amend the threshold tests for collective redundancy consultation. The threshold for the duty to collectively consult will be assessed by looking at the business as a whole rather than one workplace. By way of reminder, the duty is triggered when an employer is “proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less”. There has been significant case law on the meaning of “establishment”, with the result being that it currently denotes the local unit or entity to which the workers are assigned. Labour would broaden this to the whole business.
Strengthen and expand collective rights. This encompasses several proposals:
- Repealing the Strikes (Minimum Service Levels) Act 2023;
- Allowing electronic balloting;
- Ensuring workers in precarious and gig economy sectors have a meaningful right to organise through trade unions;
- Simplifying trade union recognition process (e.g. by reducing thresholds and bringing in simple majority voting);
- Allowing union officials to meet, represent, recruit and organise members, provided they give appropriate notice and comply with reasonable requests of the employer; and
- A duty to notify new employees of their right to join a trade union and to regularly remind existing staff of this right. The information will also need to be contained in the written statements of particulars which employers must give new employees.
Restrict fire and rehire. This is sometimes billed as banning fire and rehire, but Labour would continue to allow it in some, limited circumstances; namely, where the business needs to restructure to remain viable, preserve its workforce and the company when there is genuinely no alternative. However, this will have to follow a proper process based on dialogue and common understanding between employers and workers.
Create a Single Enforcement Body (SEB). The SEB would be tasked with enforcing workers’ rights. It would have powers to inspect workplaces and bring civil proceedings to uphold employment rights. The SEB would have trade union and TUC representation.
Banning “exploitative” zero hours contracts. This appears to mean that workers on zero hours contracts will be able to force a minimum number of hours: the New Deal refers to giving a right to have a contract reflecting actual hours over a 12-week reference period.
Protections from dismissal for returning mothers. It would be unlawful to dismiss a returning mother in the six months following return from maternity leave, subject to yet-to-be-specified exceptions.
Equal pay in outsourcing. Labour would put in place measures to ensure that outsourcing of services cannot be used by employers to avoid paying equal pay, including for work of equal value, to women. The New Deal does not specify how this would be achieved.
Introduce a Race Equality Act. This would include the introduction of race equal pay claims and strengthen dual discrimination protection.
Gender pay gap action plans. Large firms (which is not defined) would be required to develop, publish and implement action plans to close their gender pay gaps. Outsourced workers would need to be included in their gender pay gap and pay ratio reporting too.
Ethnicity and disability pay gap reporting. This would be required for employers with more than 250 members of staff.
National minimum wage to be a real living wage, and age bands removed. To achieve this, Labour would change the Low Pay Commission’s remit so that, alongside median wages and economic conditions, it would take into account the cost of living. Labour also proposes to remove the age bands for the national minimum wage.
Statutory sick pay a day-one right. Labour would also remove the lower earnings limit.
Reviewing parental leave, and make it a day-one right. This would be subject to a review in the first year of government.
Right to disconnect. This would follow existing models in Belgium and Ireland.
Single status of worker. There are currently three categories of employment status for employment rights purposes: employee, worker, self-employed. There have long been proposals on moving to a binary classification of just employee and self-employed (as exists for tax law purposes). Labour proposes to consult again on moving to such a model.
Six-month time limit for all employment tribunal claims.
Legislating on proposals within 100 days. Labour commits to legislating within 100 days of taking office. However, they also commit to consulting fully with businesses, workers, and civil society on how to put their plans into practice before legislation is passed.

Conservatives

As mentioned in our previous InsightPlus article, following the wash-up period before Parliament was formally dissolved, whilst some employment law proposals were pushed through Parliament, many of the anticipated employment law changes due to take effect from 2024 onwards were not progressed, meaning their status remains unclear. This includes:

Right to request more predictable working patterns under the Workers (Predictable Terms and Conditions) Act 2023.
Paid neonatal leave under the Neonatal Care (Leave and Pay) Act 2023.

Since Parliament was dissolved on 30 May 2024, the Conservatives have announced their manifesto on 11 June 2024, titled a Clear Plan.

The Conservatives’ key proposals are:

Cutting employee’s National Insurance from 12% to 6% by April 2027, with the aim to abolish National Insurance entirely (but with no timescale for achieving that).
Abolishing the main rate of Class 4 National Insurance for the self-employed by the end of the next Parliament (and will not raise income tax or VAT).
Maintaining the National Living Wage in each year of the next Parliament at two-thirds of median earnings, which is estimated at GBP13 per hour.
Limits on industrial action – continue to implement minimum service level agreements under the Strikes (Minimum Service Levels) Act 2023. Previously, the Conservatives launched a consultation to repeal regulation 7 of the Conduct of Employment Agencies and Employment Businesses Regulations 2003 which stops employment businesses from supplying agency workers to cover striking workers.
Stricter benefit sanctions and fit note reforms – as part of the Back to Work plan, the Conservatives had already announced that they intend to impose tougher sanctions on those not actively seeking work, including a more stringent work capability assessment criteria and reforms to the fit note process, requiring specialist health professionals rather than GPs to issue sick notes. As part of their manifesto, the Conservatives have confirmed these plans and have added that there will be removal of benefit entitlements for those who refuse to take up suitable jobs or mandatory work placements after 12 months on benefits and bringing forward the new claimant review point for the long term unemployed to 12 months (from 18 months currently).
Updating the definition of ‘sex’ in the Equality Act 2010 through primary legislation to mean ‘biological sex’ so that ‘an individual can only have one sex in the eyes of the law’. This is described as guaranteeing that single sex spaces and services can continue to be provided. The party previously stated that the change would not remove existing protections against discrimination on the basis of gender reassignment.
The much-publicised introduction of mandatory National Service for 18 year olds, either through unpaid civic service of 25 days a year or a paid year-long full time placement in military service. The manifesto promises to establish a Royal Commission to design the details of the National Service before implementing through legislation.

Before the manifesto was released, the Conservatives indicated the following changes would be made, which have not been specifically called out in their manifesto:

TUPE and European Works Councils (EWCs) reforms – proposed changes were announced prior to the election announcement which would prevent limb (b) workers from being covered by TUPE, meaning that only employees will transfer and assert rights under TUPE. The party also previously announced that they would abolish the legal framework for EWCs, which would likely remove any statutory obligation to have an EWC in the UK. For further details on these proposals which form part of their “smarter regulation” initiative, see our previous article here. However, these proposals were not specifically called out in the manifesto.
Post-termination non-compete clauses – introducing a cap on the duration of such clauses to three months in employment and worker contracts, which had been announced as being introduced when parliamentary time allowed, which it hasn’t.
Reintroduction of employment tribunal fees.

They had also previously said they would retain the two-year qualifying period for unfair dismissal and three-month time limit for the majority of claims.

Liberal Democrats

The Liberal Democrat party has announced their plan for a Fair Deal.

The Liberal Democrats’ key proposals are:

Reviewing the Conservatives’ off-payroll working IR35 reforms to ‘ensure self-employed people are treated fairly’. No further details were provided therefore what this would entail in practice is unclear.
Reviewing the national minimum wage to set a genuine living wage across all sectors.
Parental leave reforms – making all parental pay and leave a day one right, with ‘large employers’ being required to publish their policies on such matters. Fathers and partners would initially gain an entitlement to four weeks’ paid leave at 90% of pay on a ‘use it or lose it’ basis, with – when public finances allow – this to be extended to six weeks for all parents. At that point, 46 weeks of parental leave between each parent would then also be available at a rate of GBP350 per week. Statutory Maternity and Shared Parental Pay would be doubled to GBP350 a week, and increased paternity leave payments to 90% of earnings with a cap for high earners would be available. Paid neonatal care leave would also be introduced.
Statutory sick pay to become a day one right – payments to be made available from the first missed day of work, ‘aligning’ payments with the National Minimum Wage and removing the lower earning limit.
Care reforms – increasing the minimum wage for carers by GBP2 above the national minimum wage, introducing paid carer’s leave entitlements for unpaid carers, making ‘caring’ and ‘care experience’ a protected characteristic under the Equality Act 2010, and requiring employees to make reasonable adjustments to enable employees with caring responsibilities to provide such care.
Increasing the minimum wage for zero-hour contract workers – this would apply at times of ‘normal demand’ rather than during peak periods.
A right to request a fixed-hours contract after one year for zero-hours and agency workers which cannot be ‘unreasonably refused’ by employers.
A new class of ‘dependent contractors’ – a ‘new’ employment status which appears to be similar to worker status. The legal test for determining which individuals would be classified as dependent contractors is unclear, as is how or whether worker status would be impacted. The manifesto simply states that this would provide basic rights over pay and holiday entitlements to those who are neither employees nor self-employed.
Right to request shares – staff in listed companies with over 250 employees would have a right to request shares which will be held in trust for the employees’ benefit.
Increased diversity reporting requirements – requiring large employers to publish five-year aspirational diversity targets in addition to data on gender, ethnicity, disability, LGBT+ employment levels and pay gaps and progression.
Extending the use of name-blind recruitment processes in the public sector.
Amend the Equality Act to introduce two new protected characteristics of caring, and having care experience (being, or having been, in care).
Shifting the burden of proof in employment tribunals away from employees by requiring the employer to disprove employment status.

Reform UK

The Reform party has promised to repeal ‘thousands’ of laws that they believe ‘hold back British business and damage productivity’, including employment law protections making it ‘riskier to hire people’. The party has published a working draft manifesto titled Our Contract with You and is currently sitting third in the polls. Whilst the proposals lack detail and the finalised ‘Contract with the People’ (i.e. the manifesto) is yet to be released (planned for 17 June), the key proposals in the current “working draft” are:

Lifting the income tax starting threshold to GBP20,000 annually – this is a sharp increase from the current GBP12,570 threshold.
Abolishing off-payroll working IR35 rules to ‘support sole traders’.
Pushing to get two million people back to work through reforms to benefit support and training with a focus on 16-34 year olds, in addition to tax reliefs for businesses undertaking apprenticeships.
Introducing independent medical assessments for those on benefits and assessments for personal independence payments to take place face-to-face to prove eligibility for payments.
Mandating single sex spaces such as public toilets and changing areas, but without confirming how they would do this (i.e. through primary legislation).
Scrapping EU Regulations with immediate effect, including employment laws.
Leaving the European Convention on Human Rights and introducing a British Bill of Rights.
Replacing the Equality Act 2010 to remove positive action measures aimed at preventing discrimination and improving representation in the workforce and scrapping all Diversity Equality and Inclusion roles.
Introducing a Free Speech Bill.

Green Party

Green MPs would push for:

The replacement of current collective rights legislation with a Charter of Workers’ Rights, with the right to strike at its heart and a legal obligation for all employers to recognise trade unions.
Introducing a maximum 10:1 pay ratio for all private and public-sector organisations, so the most well paid employee’s salary would not exceed ten times that of the lowest.
An increase in the minimum wage to GBP15 for all employees (removing current age-related rates for younger workers and apprentices), and introducing a cut in National Insurance employer contributions for small employers to offset the cost of any wage increases.
Equal employment rights for all workers from their first day of employment, including those working in the ‘gig economy’ and on zero-hours contracts. Gig employers that repeatedly break employment, data protection or tax law would be denied licences to operate.
A move to a four-day working week.