What Could the July General Election Mean for Employment Law?

We’ve been anticipating and guessing when it would be, we now have a date!

There have been lots of announcements form all parties on what they would do if they win the next election but none of it has been set in stone as manifesto pledges – until now.

As the political parties gear up for the election, it’s important to understand their positions on workplace reform. Here’s a rundown of the main political parties’ proposed changes to employment law.

Labour Party

Labour’s agenda focuses on strengthening workers’ rights and ensuring fair pay and conditions for all employees:

1. Day-One Rights: Labour plans to remove the qualifying periods for basic rights like unfair dismissal, sick pay, and parental leave, making them available from day one of employment.
   This would have a significant impact on employers, both in terms of cost and managing new starters. Assessment during the recruitment process will become ever more important to ensure that a new employee is the right fit to your organisation and can do that job you’ve taken them on to do. We assume that probation period will still be acceptable and managing new employees during this period will be crucial, they will need clear objectives and reviews throughout if the worse come to the worse and you have to justify the termination of their employment.
2. Single Worker Status: They aim to eliminate the distinction between employees and workers, ensuring all workers receive the same basic rights, such as sick pay, holiday pay, parental leave, and protection against unfair dismissal.This is probably no bad thing but it will reduce flexibility for employers who have ebbs and flows to their workflow.
3. Strengthening Rights: Labour intends to enhance existing rights for pregnant workers, whistleblowers, workers made redundant, and those subject to TUPE processes.
   It isn’t yet clear whether the enhancement for pregnant workers will go beyond those introduced in April 2024, we await more detail. As we do for other areas, we can assume that it will introduce more onerous requirements (and probably greater costs) on employers.
4. Raising Wages: Labour is committed to raising the National Living Wage and immediately increasing the National Minimum Wage to at least £10 per hour. They also plan to reform the Low Pay Commission, ensure paid travel time in certain sectors, address “sleep over” hours in social care, ban unpaid internships, and establish Fair Pay Agreements.
   All of these will have cost implications for employers and will probably lead to increased prices as employers pass on these costs to consumers unless businesses are prepared to see their profit margins eroded. The increase to the NMW may have an interesting impact on employees currently claiming state benefits to top up low wages.
5. Sick Pay: Increase Statutory Sick Pay and extend it to all workers, including those currently excluded due to low wages.
   Again this will increase costs to employers, the answer will lie in employee wellbeing and managing sickness absence.
6. Closing Pay Gaps: Labour will act to close gender, ethnicity, and disability pay gaps, allow equal pay comparisons across employers, and mandate the publication of ethnicity pay gaps for companies with more than 250 staff.
   This should be good for society and equality as a whole, there is unfairness at a macro level and that should be addressed. For many of our clients the fact that this, currently, will only apply to larger businesses will be helpful and we know that are clients pay fairly for the roles undertaken and do not discriminate.
7. Tackling Harassment: Employers will be required to maintain harassment-free workplaces.
   This is something which is being introduced in the autumn anyway. We will be running a webinar on what you’ll need to do shortly.
8. Flexible Working: Labour proposes a default right to flexible working from day one, with employers required to accommodate this as far as reasonable.
   This is not significantly different to what was introduced in April 2024.
9. Family-Friendly Policies: Labour plans to extend statutory maternity and paternity leave, introduce bereavement leave, protect pregnant employees from dismissal for six months post-maternity leave, and review shared parental leave.
   The six months post-maternity leave protection was introduced in April 2024, so isn’t new. If statutory leave is increased, it will be interesting to see whether statutory pay applies as well.
10. Caring Responsibilities: Strengthen workers’ rights to respond to family emergencies with paid leave, flexible working, and better enforcement of these rights.
    With so many people, and disproportionally women, having caring responsibilities as the population ages and we all live longer, this is no surprise and one which will be welcomed by many employee although employers may not agree if it means greater levels of absentee employees. Employers may want to look at their flexibility and wellbeing policies and culture.
11. Zero-Hours Contracts: Labour will ban “one-sided” flexibility, allowing anyone working regular hours for 12 weeks or more to gain a regular contract and ensuring reasonable notice for shift changes or cancellations.
    The whole point of Zero Hours arrangements is the ability of the employee to refuse work as well as accept it. We have always advocated that Zero Hours terms should only be used where there isa genuine requirement for flexibility and if a Worker is working regular hours they should be an employee whereby both employer and employee benefit from mutual obligations and loyalty.
12. Fire and Re-Hire: Labour will improve consultation procedures and adapt unfair dismissal and redundancy laws to prevent dismissals for refusing worse contracts.
    Following the wholesale dismissal and rehiring in P&O ferries a while ago, this was sure to be on the agenda and should be welcomed. It tends to be large and wealthy businesses who circumvent these rules (a la P&O ferries) which tends to be unfair on smaller businesses which don’t have those resources behind them.
13. Mental Health: Labour aims to raise awareness of neurodiversity and review provisions for stress, mental health, and Long Covid.
    Most savvy businesses now understand that making such provisions is essential for success. enlightenHR has published guides on these topics as we see them as vital to employee engagement and a successful workplace.
14. Right to Disconnect: Introduce a new right to disconnect and protect workers from remote surveillance.
    An interesting objective and it will be interesting to see how this plays out in the real world! Of course, we all now recognise the need to switch off from work and leading by example is key to success.
15. Trade Union Laws: Strengthen trade union rights, simplify union recognition processes, protect trade union representatives, and inform workers of their right to join a union.
    Unsurprising from a Labour manifesto. Employers who already engage with their employees (maybe through an internal employee representative body) may be less likely to be a target for union recognition and should already be benefitting from great employee engagement
16. Enforcement Rights: Extend the time limit for bringing employment tribunal claims and remove compensation caps.
    It is expected that the time limit for claims will increase to 6 months from the date of termination up from 3 months. It seems that Labour have removed their commitment to remove the cap on awards but as very few, other than the headline cases reported in the press, get anywhere near the current limits, although this sounded frightening it would probably only have affected a small minority of claims anyway.

Conservative Party

The Conservatives plan to continue their current agenda with the following priorities:

1. Current Agenda: Neonatal care leave and pay, industrial action law reform, the Back to Work Plan (including fit note reform), umbrella company market reform, continuing the National Disability Strategy, addressing the definition of “sex” in the Equality Act 2010, reintroducing employment tribunal fees, and reforming non-compete clauses and TUPE.
   So nothing new really, this has all been floating around for a while.
2. Bills Under Debate: Paternity Leave (Bereavement) Bill, Bullying and Respect at Work Bill, Fertility Treatment (Employment Rights) Bill, and Unpaid Trial Work Periods (Prohibition) Bill.
   Banning unpaid work trials will no doubt impact some businesses, especially hospitality, where this is often customer and practice prior to offering a role. However, the ban is for unpaid trials not to the trials themselves; in all fairness, if someone is doing a job of work on a trial basis they have probably earned their pay for that work. It seem only fair that fertility treatment should have protection from discrimination, currently protection only commences once the employee is pregnant. Bullying and Respect at work should really be a given in the workplace and will no doubt be swept up by employers as part of their duty to actively prevent harassment in the workplace.

Liberal Democrats

The Liberal Democrats have a strong focus on parental leave reform and increasing paternity pay:

1. Parental Leave Reform: All workers, including self-employed parents, will have a day-one right to parental leave and pay. Each parent would get six weeks of “use-it-or-lose-it” leave, with 46 weeks of parental leave to share. Parental pay after the initial six weeks would be £350 per week.
   This is an interesting approach which seems to go against the accepted definition of self-employment. Currently extending rights such as this to the self-employed has tended to negate that self-employed status.
2. Increase Paternity Pay: Paternity pay would be increased to 90% of earnings, with a cap for high earners.
   Probably long overdue to equalise this right with maternity pay and allow fathers to spend more time with their new children on birth or adoption.

The outcome of the July general election could bring significant changes to employment law in the UK. Stay tuned to enlightenHR for updates and guidance on how these potential changes might impact your business. If you need support navigating these developments, don’t hesitate to get in touch with us.

Need Advice?

If you need a hand with any of this, or anything else when it comes to the people and practices in your business, we’d love to help. We are always happy to debate the pros/cons, dos/don’ts with you so please do talk to us if we can help in any way, we are here to support you. Just give us a call and arrange a free consultation. You can talk to Alison directly on 07967 221595 or email info@enlightenhr.com