An overview of the key employment law reform proposals within the Leading UK Parties’ manifestos.

Liberal Democrats

First off the blocks last week were the Liberal Democrats who announced its manifesto on 10 June.  Their key proposals are:

• Modernising employment rights to make them fit for the ‘gig economy’:
  • Establish a new ‘dependent contractor’ employment status with minimum rights such as holiday, sick pay and minimum wage
  • Setting a 20% higher minimum wage for those on zero-hour contracts
  • A right to request a fixed-hour contract after working for 12 months (which cannot be unreasonably refused)
  • When employment status is challenged, shifting the burden of proof to employers to disprove worker status
• Expand parental leave and pay, including:
  • Making them a day-one right and extend them to self-employed parents
  • Doubling statutory maternity pay and shared parental pay
  • Changing paternity pay to 90% of earnings (capped for high earners) and having a ‘use-it-or-lose-it month’ of paternity leave
  • Large employers to be required to publish parental leave policies
  • Introduce paid neonatal care leave
• Expand statutory sick pay (‘SSP’):
  • Making it a day-one right
  • Aligning the rate of SSP with the minimum wage (with small businesses to be supported with costs)
  • Changing/removing the lower earning limit on SSP so more people are entitled to SSP
• Give everyone a new right to flexible working and every disabled person the right to work from home (unless there are significant business reasons why it is not possible).
• Make ‘caring’ and ‘care experience’ protected characteristics under the Equality Act 2010, require reasonable adjustments for employees with caring responsibilities and introduce paid carer’s leave.
• Require large employers to monitor and publish data on gender, ethnicity, disability and LGBT+ employment levels, pay gaps and progression and publish 5-year aspirational targets.
• Giving staff in listed companies with over 250 employees the right to request shares, to be held in trust for the benefit of the employees.
• Apprenticeships:
  • Replacing the current apprenticeship levy with a broader and more flexible skills and training levy
  • Removing the lower apprenticeship wage rate, so apprentices will be paid minimum wage
• Introduce a Worker Protection Enforcement Authority to enforce the National Minimum Wage (‘NMW’), tackle modern slavery and protect agency workers.

If elected, the Liberal Democrat proposals will produce a fair amount of change in the employment law sphere, with a particular focus on supporting workers in the gig economy and bolstering family friendly rights.

Conservatives

The Conservatives were next to announce its manifesto on 11 June.  Given that we have had a Conservative government for well over a decade now, it is unsurprising that its manifesto is almost completely clear of any new employment law pledges or policies.  However, the following did get a specific mention:

• Amending the Equality Act 2010 to make clear that ‘sex’ means ‘biological sex’; a change intended to protect female only spaces and competitiveness in sport.
• A pledge to never introduce Labour’s “package of French-style union rules” and to continue implementing its Minimum Service Levels legislation (intended to limit the impact of strike action on public services).
• Maintaining the way the NMW is calculated (at two thirds of median earnings).
• An overhaul of the fit note process, and moving responsibility for issuing fit notes away from GPs towards specialist work and health professionals. There is also mention of integrating this with the new WorkWell service to provide support to help people into, or stay in, work.

If asked to form a government after the 4 July general election, we might also expect the Conservatives to press ahead with the following initiatives previously considered or committed to:

• A right to neonatal care leave and pay (due in force in April 2025).
• Establishing a new Occupational Health Taskforce.
• Exploring the reintroduction of fees to bring Tribunal claims and appeals.
• Exploring ways to further clamp down on the use of Non Disclosure Agreements (for example, by requiring individuals to obtain independent legal advice before entering into them).
• Limiting post termination non-compete restrictions to 3 months, with accompanying guidance on such clauses.
• Reviewing the whistleblowing framework with the aim of improving the existing regime.
• Amending the Transfer of Undertakings (Protection of Employment) (‘TUPE’) Regulations to provide clarity on the law in certain areas (including the type of worker TUPE applies to).
• Removing the current requirement to maintain existing European Works Councils.
• Strengthening rights to equal pay and protections from maternity and menopause discrimination and sexual harassment.

If the Conservatives are elected, it will be business as usual for employers heading into the summer with no significant changes on the horizon.

Labour

The Labour Party announced its manifesto on 13 June.  Having already published its Plan to Make Work Pay: Delivering A New Deal for Working People on 24 May, its manifesto promises to introduce legislation to implement its plans within 100 days of entering government (whilst consulting before any legislation is passed).

The headline proposals reiterated in its manifesto are:

• Banning ‘exploitative’ zero hours contracts.
• Ending current ‘fire and re-hire’ practices.
• Introducing day one rights to (1) parental leave (2) sick pay and (3) protection from unfair dismissal. (Importantly, the New Deal paper suggests that employers will not be prevented from dismissing during probationary periods, following a proper process.)
• Reform of trade union laws to strengthen workers ‘collective voice’.
• Creating a Single Enforcement Body to ensure employment rights are upheld.
• Ensuring the NMW takes account of the cost of living and removing NMW age bands so all adults are entitled to the same minimum wage.
• Strengthening rights to equal pay, protections from maternity and menopause discrimination.
• Take action to reduce the gender pay gap.
• Introduction of a Race Equality Act to enshrine the right to equal pay and strengthen protections against dual discrimination and racial inequalities.
• Equal pay for those with a disability and increased support with access to reasonable adjustments.
• Introduce disability and ethnicity pay gap reporting for employers of more than 250 employees.
• Modernise gender recognition law.
• Stronger protection for whistleblowers, including in the reporting of sexual harassment.

Whilst not specifically mentioned in the manifesto, there are numerous other employment law initiatives set out in Labour’s plan for a New Deal for Working Parents, the most significant of which are:

• Increase the time limit for all employment claims from three to six months.
• Making it unlawful to dismiss a woman who is pregnant for six months after her return (except in specific circumstances).
• Making flexible working the default from day one for all workers (except where it is not reasonably feasible).
• Ending ‘one-sided’ flexibility by ensuring all workers:
  • Have the right to a contract that reflects the number of hours they regularly work (based on a twelve-week reference period)
  • Get reasonable notice of any change in shifts or working time, with compensation for any shifts cancelled or curtailed
• Consulting on a single status of worker which differentiates only between workers and the genuinely self-employed.
• Strengthen redundancy rights and protections, including determining whether collective consultation applies by counting the number of people impacted across the entire business, rather than in one workplace only.
• Strengthening rights of the self-employed, including by introducing a right for the self-employed to have a written contract and extending health and safety protections to them.
• Introduce the right to bereavement leave for all workers.
• Introduce a right for workers to have a ‘constructive conversation’ about the right to ‘switch off’.
• Ensure that workers get to keep their tips, and it will be for workers to decide how tips are allocated.
• Banning unpaid internships (except where part of an education or training course).
• Strengthening collective bargaining / trade union reform:
  • Update trade union legislation and remove unnecessary restrictions on trade union activity
  • Repeal past Conservative legislation limiting trade union activity
  • Simplifying the process of union recognition and reducing the statutory recognition thresholds
  • Introducing rights for trade unions to access workplaces, for recruitment and organising purposes
  • Introducing a duty on employers to inform all new employees in writing of their right to join a trade union, and to periodically remind employees of this
• Numerous discrimination and diversity, equity and inclusion (DEI) initiatives:
  • Equal pay – implementing (1) an enforcement unit for equal pay and (2) measures to prevent the outsourcing of services to avoid paying equal pay
  • Gender pay gap reporting – (1) large employers to be required to implement action plans to close the gender pay gap and (2) include outsourced workers in reporting data
  • Strengthen the duty on employers to take all reasonable steps to stop sexual harassment
  • A requirement for employers with more than 250 employees to produce a menopause action plan on supporting employees through the menopause
• Modernise the Employment Tribunal system and improve and strengthen enforcement through Employment Tribunals.
• Extend the Freedom of Information Act to apply to private companies that hold contracts to provide public services (with regard to information on those contracts) and publicly funded employers associations.

Labour promises to deliver the biggest upgrade to rights at work for a generation, and it certainly seems that this will be the case if it follows through on all (or even some) of its numerous proposals.  The changes will likely have a huge impact on HR teams, especially in larger companies with trade union presence.

Reform UK

Reform UK launched its manifesto, or its “contract”, on 17 June.  There isn’t a lot to say about its employment law pledges, as they are thin on the ground to say the least, but the following do get a mention:

• A pledge to scrap all EU Regulations “with immediate effect” including those relating to employment laws. There is also a general statement that it intends to ‘slash red tape’ and scrap thousands of laws that hold back British business, including employment laws.
• A pledge to abolish IR35.
• A promise to reform discrimination law and abolish Diversity Equality and Inclusion rules which, it believes, lowers standards and reduces economic productivity.

There would be a lot to unpick if these proposals went ahead.  However, given that Reform do not expect themselves to be the next Government, we are unlikely to have to deal with the issues arising from these pledges in the foreseeable future.

Conclusion

If, as the pundits and polls suggest, there is a change of Government in early July, we should expect that to be followed by the biggest overhaul to employment law in recent years.  If that happens, we will be sure to keep you updated on developments as they appear.