With the general election coming up this week, we have set out a summary of some of the key employment law proposals from the main political parties.
Conservative
The Conservative Party has said little in its manifesto in relation to its plan for employment law, and they have proposed very few substantial employment reforms.
Its manifesto includes the following proposals:
- Create a new system for ‘fit notes’, moving the responsibility from GPs to other healthcare professionals.
- Continue with the implementation of their Strikes (Minimum Service Levels) Act 2023. This was passed with the aim to limit the impact on the public by imposing minimum service levels during strike action in services within several key sectors, such as health, transport, education, and fire and rescue. The Act restricts the protection provided to trade unions and employees in respect of strikes where minimum service levels apply.
- Cut employee’s National Insurance to 6% from 2027. This is part of a longer-term plan to remove National Insurance altogether.
- Abolish National Insurance for the self-employed by the end of the next parliament term.
- Legislate to clarify that “sex” means “biological sex” under the Equality Act 2010 (an individual’s “sex” is a protected characteristic under the Equality Act).
Labour
Labour has made its New Deal for Working People a core part of its plan for government if it wins the election. Labour’s promise to introduce legislation within 100 days was repeated (although it is likely that this is in relation to draft legislation only, as businesses and unions would need to be consulted first).
Some of the key points in Labour’s manifesto are:
- Banning zero hours contracts - Under a zero-hours contract, there is no obligation on the employer to offer a minimum number of hours’ work, or for the worker to accept them if they are are offered. Labour proposes banning ‘exploitative’ zero-hour contracts and that anyone working regular hours for 12 weeks or more will have the right to a regular contract.
- Banning ‘fire and rehire’ practices – ‘fire and rehire’ is where businesses dismiss employees who refuse to agree to contractual changes, and offer to re-employ them on new terms (this should always be a last resort for employers if they wish to vary the terms of a contract ). Labour plan to ban this as an option for employers (although the wording of the New Deal document suggests this would not be a clear out-right ban).
- Introducing a day 1 right to sick pay, parental leave and unfair dismissal – arguably the most significant change would be the right for employees to bring a claim for unfair dismissal from day one of employment. Currently, in order to bring a claim for unfair dismissal employees must be employed for two years. Labour also plan to remove the cap on compensation for unfair dismissal.
- Introducing a right to ‘switch off’ (or, at the very least, the right for employees to discuss switching off with their employer) – Labour proposes to introduce the right for workers to disconnect from work and not to be contacted by their employer outside of working hours. This has already been introduced in some European countries, and Australia has also passed a right to disconnect.
- Increasing tribunal claim time limits – Employees currently have three months to bring most claims to an employment tribunal. Labour propose to extend this period to six months.
- Changes to employment status - currently, employment law recognises three employment statuses: employee, worker and self-employed. The difference in status is important because different employment rights attach to each. Labour proposes a single status of ‘worker’ to include workers and employees. This would increase the statutory protection of those currently classed as workers so that, for example, they would be able to bring a claim for unfair dismissal (which currently only employees can do). A separate category of the genuinely self-employed will remain.
- Increasing wages – Labour proposes to increase the National Minimum Wage to at least £10 per hour for all workers. Currently below this are 18-20 year olds at £8.60 and 16-17 year olds and apprentices at £6.40. It also proposes to alter the criteria for determining National Minimum Wage. Instead of determining the rate based on age bands, it will instead consider the cost of living so all adults are entitled to the same minimum wage.
- Abolishing the Strikes (Minimum Service Levels) Act 2023 (discussed above).
- Introduce a requirement for employers with more than 250 employees to have a menopause action plan. There have been recent developments which have found that menopause can amount to a disability under the Equality Act 2010 (see Lynskey v Direct Line – the judgement emphasised to employers the value of providing specific training for managers on how to support employees going through the menopause).
- Introducing a right to unpaid bereavement leave (currently only available following the death of a child).
- New duties on large employers to produce ethnicity and disability pay gap reports.
- Making collective redundancy consultation requirements dependent on the number of redundancies across the whole business rather than the number at each establishment.
- A requirement for the section 1 statement issued to all new starters to inform staff of their right to join a trade union.
- Making flexible working a default right unless employers have a good reason to refuse it.
Liberal Democrats
Here are some of the proposals set out in the Liberal Democrats’ manifesto:
- Increase minimum wage for those on zero-hour contracts – Lib Dem propose an increase of 20% for people on zero-hour contracts at times of ‘normal demand’ to compensate for the uncertainty of fluctuating hours of work. Zero-hour workers would also be given a right to request a fixed hour contract after 12 months’ service, which cannot be unreasonably refused.
- Flexible working – proposals to make flexible working a day one right, as well as a new right for disabled workers to work from home (unless there are ‘significant business reasons’ why that is not possible).
- Establish a new ‘dependent contractor’ employment status – The definition of ‘dependent contractor’ falls in between employment and self-employment, with basic rights like minimum earning levels, sick pay and holiday entitlement. It is unclear how the ‘dependent contractor’ would differ from the existing status of ‘worker’.
- Right to buy shares – Lib Dem’s proposals would seek to encourage employers to promote employee ownership by giving staff in listed companies with more than 250 employees, a right to request shares.
- Introduce diversity reporting and initiatives – by requiring large employers to publish data on gender, ethnicity, disability, and LGBT+ employment levels, pay gaps and progression, and publish five-year targets. In addition to this, Lib Dem seek to extend the use of name-blind recruitment processes (i.e. removing the candidate’s name and other identifying factors from their application).
- Introducing ‘caring’ and ‘care experience’ as a protected characteristics under the Equality Act – as a result, employers would be required to make reasonable adjustments for carers, strengthening the rights of those with carrying responsibilities.
- Making parental leave and pay a day one right (and extending these rights to the self-employed). In addition to this, the Statutory Maternity Pay and Shared Parental Pay would be doubled, and Paternity Pay increased to 90% of earnings (subject to a cap), with a ‘use it or lose it’ month for fathers and partners paid at 90% of salary.
- Improving Statutory Sick Pay rights - by introducing it from day one, and removing the lower earnings limit.
- Introduce ‘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
Reform UK
Reform UK’s Employment Law proposals are limited, however it has pledges as follows:
- To abolish IR35 rules to support sole traders – IR35 is an anti-tax avoidance measure. Its purpose is to prevent workers from avoiding paying employee income tax and National Insurance Contributions by supplying their services through an intermediary, and paying themselves dividends, rather than as employees.
- Reform and simplify the tax system – to include increasing the National Insurance rate to 20% for foreign workers.
- Replacing the Equality Act (although there is no indication as to what will replace it).
- Leave the European Convention on Human Rights.
Green Party
And finally, some proposals from the Green Party:
- Legislate for workers to have “full employment rights” from day one of employment. Currently workers do not benefits from full employment rights as employees do, so this would increase their entitlement.
- Support reduced working hours and move towards a four-day working week.
- Introducing a salary cap on “the boss” of a company – the Green Party propose that “the boss” can only earn ten times that of the lowest paid.
- Increasing minimum wage to £15 for all ages.
- Removing the upper earning limit that restricts the amount of National Insurance paid by high earners.
Whilst the result of the election is not guaranteed, a Labour government is indicated by the polls. As discussed above, a Labour government would mean some significant changes to employment law. There is no certainty as to what will happen following the 4th of July, but proposals suggest an increase in flexibility for employees, a continued expansion of leave entitlement, and an attempt to tackle “one-sided” flexibility in arrangements such as zero-hour contracts.
For more information, please contact our employment team.
