UK General Election 2024: employment related manifesto pledges

In the run-up to the General Election on 4 July 2024, we take a look at the key employment related manifesto commitments made by the largest UK-wide political parties – Labour, the Liberal Democrats and the Conservatives – that would have an impact on employers and HR. 

Labour’s manifesto says it will create a partnership between business and trade unions and implement its New Deal for Working People published on 24 May, and is the most extensive in terms of employment related reform. Most of the major pledges in the New Deal have been mentioned before, with several of the commitments contained in the party’s 2021 Employment Rights Green Paper having been watered down. However, they remain significant. 

While reforming zero hours contracts and fire and rehire practices are likely to attract media attention, Labour’s less eye-catching proposals would likely prove to be the most significant for employers. Moving to a two-tier system of employment status involving workers and self-employed, would imply that all workers will benefit from employment rights currently enjoyed only by employees.

If the right to claim unfair dismissal becomes a day one right, and the time limit for bringing a claim is extended from three to six months as proposed by Labour, increases in employment tribunal claim numbers will be inevitable. It remains to be seen how the already stretched system would cope with this. Making flexible working a default right and introducing a right to disconnect could also prove challenging in practice.

A further proposal which may be unwelcome for employers is a change in the trigger for collective redundancy consultation, where the threshold would be met by including the number of people impacted across the business rather than in one workplace (or “establishment”).

The Liberal Democrats’ manifesto also promises significant reform including changes to the statutory sick pay regime, employment status, family-related leave and introducing a right to request to buy shares in an employer to encourage employee ownership.

The Conservatives’ manifesto contains only a handful of less significant proposals for employment related reform, perhaps unsurprisingly given the lack of employment law legislation under the current Government. Most notable is the proposal to protect female-only spaces and competitiveness in sport by making clear that references to sex in the Equality Act 2010 mean biological sex. 

Key employment related reforms

Below, we summarise the key employment related reforms proposed by Labour, the Liberal Democrats and the Conservatives.

Labour

Contracts and the employment relationship

• “Exploitative” zero hours contracts would be banned; workers would have a right to a contract that reflects the number of hours regularly worked, based on a twelve-week reference period.
• The law on dismissal and re-engagement (“fire and rehire”) would be reformed to provide effective remedies against abuse and to replace the “inadequate” statutory code of practice on fire and rehire with a strengthened code of practice.
• There would be significant changes to employment status – Labour proposes, subject to consultation, to transition towards a two-tier framework for employment status of (i) worker and (ii) self-employed to ensure that the wide range of employment relationships that exist within the UK are captured and to guard against contractual arrangements that seek to avoid employment rights. Currently there are three categories: (i) employees, (ii) workers, and (iii) self-employed.
• Employees would be able to raise collective complaints or grievances externally to Acas.

Ways of working

• Flexible working would be the default from day one for all workers, except where it is “not reasonably feasible”.
• There would be a “right to switch off,” following existing models in Ireland and Belgium.
• In relation to AI and digital workplaces, any proposal to introduce surveillance technologies in the workplace would be subject to consultation and negotiation with trade unions or elected employee representatives.

Statutory employment rights

• Day one rights would apply to unfair dismissal, parental leave and sick pay. This would not affect an employer’s ability to use probationary periods in a “fair and transparent” way (although it is unclear how this would operate in practice).
• Redundancy consultation obligations would be determined by the number of people impacted across the business rather than in one workplace, increasing the scope for collective consultation to be required.
• Existing rights and protections for workers subject to TUPE transfers would also be strengthened (although there is no detail as to what this would entail).
• Protection for whistleblowers would be strengthened, in particular for women who report sexual harassment at work.

Family friendly rights

• Labour would conduct a review of parental leave within its first year in Government, including making parental leave a day one right (removing the existing one year’s service requirement).
• It would be unlawful to dismiss a woman who returns from maternity leave for six months after her return, except in specific circumstances. It is not yet clear how this goes beyond the legislative changes introduced in April 2024 under the Protection from Redundancy (Pregnancy and Family) Leave Act 2023 which provides for enhanced protection for women returning to work from maternity leave.
• The benefits of introducing paid carers’ leave would be examined, bearing in mind the impact of the change on small employers. This could signal a row back from Labour’s earlier commitment to introduce paid carers’ leave. The Liberal Democrats’ manifesto contains a pledge to introduce paid carers’ leave.
• A right to bereavement leave would be introduced for all workers. 

Pay

• In a move towards fair pay, the living wage age bands would be removed, and the remit of the Low Pay Commission would be changed to ensure that the minimum wage takes into account the cost of living.
• Labour would extend the availability of Statutory Sick Pay, by removing the lower earnings limit and the existing three-day waiting period.
• Unpaid internships would also be banned, except where they are part of an education or training course.
• Hospitality workers would receive their tips in full and workers would be able to decide how tips are allocated. There is no reference to the Employment (Allocation of Tips) Act 2023 or the Code of Practice on the Fair and Transparent Distribution of Tips.

Trade unions

• Labour would repeal recent trade union legislation on minimum service levels during strike action, the use of replacement labour during strikes and the Trade Union Act 2016 which changed the process and thresholds for calling lawful industrial action.
• The process for trade union recognition and the law around statutory recognition thresholds would be amended by removing the requirement for at least 50% of workers to be in support of a union’s claim for recognition, and introducing electronic balloting.
• Workers would be able to access a union at work where the workforce support it. 
• Employers would be under a new duty to inform new employees (via their written statement of particulars) of their right to join a union, and to regularly re-inform staff about that right.

Pay gap reporting

• Large firms (expected to be those with more than 250 employees) would be required to develop, publish and implement action plans to close their gender pay gaps. Outsourced workers would be included in gender pay gap reporting.
• The publication of ethnicity and disability pay gaps would be mandatory for employers with more than 250 employees.

Equality and discrimination

• Labour would require large employers to produce Menopause Action Plans, setting out how they support employees through the menopause.
• The law on sexual harassment would be changed to protect workers from harassment by third parties. The legal duty for employers (due to be introduced in October 2024) would impose a more onerous obligation on employers to take all reasonable steps to prevent sexual harassment (rather than just “reasonable steps”) in line with the original proposals.
• Labour commits in its manifesto to introduce a Race Equality Act, to bring into law the right to equal pay for Black, Asian and other ethnic minority people and strengthen protection against dual discrimination.  
• Equal pay for disabled people would also be introduced, and access to reasonable adjustments would be improved.

Employment tribunals and enforcement

• The time limit within which employees are able to make an employment claim would be increased from three months to six months.
• A single enforcement body would be established to enforce workers' rights (something previously proposed but not taken forward by the Government), and would be empowered to inspect workplaces and take action against worker exploitation.

Liberal Democrats

Ways of working

• A new right to flexible working would be introduced and every disabled person would have a right to work from home unless there are significant business reasons why it is not possible.
• Employers would promote employee ownership by giving staff in listed companies with more than 250 employees a right to request shares, to be held in trust for the benefit of employees. This proposal is vaguely reminiscent of the employee shareholder status introduced in 2013 which was not widely taken up and subsequently abolished in 2016. 
• The apprenticeship levy would be replaced with a broader and more flexible skills and training levy and the lower national minimum wage rate for apprentices would be scrapped.

Enforcing employment rights

• Similar to Labour’s proposal, a new Worker Protection Enforcement Authority would be created unifying responsibilities currently spread across three agencies – including enforcing the minimum wage, tackling modern slavery and protecting agency workers.

Pay

• An independent review to recommend a genuine living wage across all sectors would be established.
• Again, similar to Labour’s proposals, the Liberal Democrats have pledged to reform the Statutory Sick Pay system by making it available to workers earning less than £123 a week, aligning the pay rate with the National Minimum Wage, and making payments available from the first day of absence.

Employment status and zero hours

• A new ‘dependent contractor’ employment status, in between employment and self-employment, with entitlements to basic rights such as minimum earnings levels, sick pay and holiday entitlement would be established.
• The tax and National Insurance status of employees, dependent contractors and freelancers would be reviewed to ensure fair and comparable treatment.
• A 20% higher minimum wage rate would be set for people on zero hour contracts at times of normal demand to compensate them for the uncertainty of fluctuating hours of work.
• Zero hours and agency workers would have a right to request a fixed-hours contract after 12 months not to be unreasonably refused.
• The burden of proof in employment tribunals regarding employment status would shift from the individual to the employer.

Family friendly rights

• Parental pay and leave would be made day-one rights, including for adoptive parents and kinship carers, and extending them to self-employed parents.
• Statutory Maternity Pay and Shared Parental Pay would be doubled to £350 a week.
• Paternity leave pay would increase to 90% of earnings, with a cap for high earners.
• An extra use-it-or-lose-it month for fathers and partners, paid at 90% of earnings, with a cap for high earners would be introduced.
• Large employers would be required to publish their parental leave and pay policies.
• Paid carers’ leave would be introduced.
• Caring would be added as a protected characteristic under the Equality Act 2010, and employers would be required to make reasonable adjustments to enable employees with caring responsibilities to provide that care.

Conservatives

• The statement of fitness for work (“fit note”) process would be overhauled. A new system would be designed which moves the responsibility for issuing fit notes away from GPs towards specialist work and health professionals.
• Primary legislation would be introduced to clarify that the protected characteristic of sex in the Equality Act 2010 means biological sex. This would guarantee that single sex services can be provided, for example in healthcare and sports settings.
• The minimum service levels legislation which gives the Government power to set minimum service levels for key public services during strike action would be pursued. 

If current polls are correct and Labour form the next Government, the real question is whether their expansive list of commitments will all end up on the statute books. Certainly, there would need to be a timetable to implement the proposed changes and enough time for employers to prepare for those. Although the introduction of a number of Labour’s proposals would be subject to consultation exercises, the party has committed to introducing employment related legislation within 100 days of taking office, which means significant reform may not be far off.