General Election Update

The Prime Minister, Rishi Sunak, has announced the long-awaited news that a general election will take place on 4^th July 2024. Both Labour and the Conservatives have made attempts in recent months to set out their employment law proposals. You may recall our earlier article which set out Labour’s “cast iron commitment” to introducing a new Employment Rights Bill. In contrast, the Conservatives election manifesto makes very little proposals in respect of employment rights, but does make certain proposals in respect of increasing the number of people in employment and an overhaul of the “fit note” process. We consider the key proposals made by the above two parties below.

Labour

Labour’s initial plans to introduce a new Employment Rights Bill within the first 100 days of entering office have since evolved into the promise of a “new deal for working people” which forms a core part of its manifesto for government if elected. Labour’s manifesto describes this plan as one which will ensure more people stay in work, strengthen trade unions and collective bargaining which it believes will be key to tackling problems of inequality, discrimination, enforcement and low pay in the workplace. Key proposals include:

• Day one unfair dismissal rights. This is likely to be considered the most extreme proposal made by Labour as employees would no longer require two-years’ service to acquire unfair dismissal rights. It will inevitably increase the number of unfair dismissal claims brought to tribunal.
• Replacing the upcoming code on “fire and rehire”. The new code of practice on fire and rehire, due to come into force on 18^th July 2024 (see here for our article on this) would be replaced with a “stronger” version. Labour have not announced what we can expect this code to look like.
• Changing the thresholds for redundancy consultation. Labour proposes to change the current trigger for collective consultation requirements. Employers would be required to consider the number of redundancies that are being made business wide rather than just at each site/workplace. Employers would also need to keep a close eye on the number of redundancies made to ensure compliance with collective consultation requirements.
• Ban on “exploitative” zero-hour contracts. Labour proposes to ban “exploitative” zero-hour contracts and introduce anti-avoidance measures. This will be a particular concern for businesses who rely heavily on this type of arrangement. It is not clear from the current manifesto what Labour deem “exploitative” and employers are likely to want guidance on this.
• Right to “switch off”. This would include a ban on employers contacting workers by phone or email outside of normal working hours.
• Employment rights for self-employed individuals. Those who are self-employed would enjoy rights to a form of employment contract, health and safety and blacklisting rights.
• Overhaul of the current three-tier employment status system. Labour propose to introduce a single “worker” employment status and a transition to a simplified two-tier framework. They accept that this will not take place without first conducting a consultation process, given the unavoidable impact on employment rights and the current tax regime.
• Increased employer reporting requirements. More stringent reporting requirements for Gender, Disability and Ethnicity pay gap reporting are proposed.
• Extension of rights to bring equal pay claims. Labour plan to extend the right to make equal pay claims to black, Asian and minority ethnic workers as well as disabled workers stating that the current equal pay scheme is flawed. This will involve a new “Race Equality Act”.
• Plans to strengthen trade union rights. Labour say they will introduce new rights for trade unions to access the workplace in order to recruit and organise which is a big jump from the current rights of entry. In addition, Labour plan to introduce a simplified process of union recognition, with a lower threshold for voting. In contrast to the Conservatives plans, Labour pledge to abolish the Strikes (Minimum Service Levels) Act 2023 and regulations which allow agencies to provide cover for striking workers. The Conservatives have called these plans akin to “French-style union laws”.
• Further family friendly rights. Labour want to introduce a statutory right to bereavement leave, which is currently unpaid, and at the employer’s discretion to grant. It also plans to set out an outright ban on the dismissal of those returning from maternity leave within six months after returning from maternity leave, except in certain circumstances. Finally, Labour have suggested making the recently introduced carer’s leave, a paid entitlement, rather than unpaid.
• Statutory sick pay reforms. Statutory Sick Pay (“SSP”) would be payable from day one of sickness. They have not confirmed any increase to the level of SSP payable, but there is speculation that this could be brought in line with other European countries.
• Extension of the time limit to bring employment claims. Currently, employees have three months less 1 day to bring certain claims. Labour propose to extend this period to six months.

Conservatives

The Conservative manifesto does not make many specific employment law pledges, although it does make a clear commitment to increasing the number of people returning to work.

• National living wage updates. The Conservatives promise to maintain the national living wage each year until the end of the next Parliament with current forecasts estimating an increase to £13 per hour.
• National insurance cuts. The Conservatives plan to cut employee national insurance contributions to 6% as part of a long-term plan to remove national insurance altogether.
• Change to the definition of “sex” in the Equality Act 2010. This would be amended to refer to biological sex rather than “sex” as currently drafted.
• Minimum service levels. The Conservatives introduced the Strikes (Minimum Service Levels) Act 2023 in response to a raft of industrial action in the public sector. The Conservatives remain committed to implementing this legislation.
• Fit notes. In addition to proposals around a change to disability benefits, the Conservatives are proposing an overhaul of the current fit note system. This would include introducing a new system for fit notes which would shift the responsibility for issuing fit notes to specialist medical professionals rather than just GP’s. This new service would be called “WorkWell” and would also provide tailored support on helping people back to work after periods of absence.
• The Conservatives propose to fund 100,000 apprenticeships in England every year by the end of the next parliament.

As was perhaps to be expected, there are clearly quite differing views between these two parties. Labour’s proposals are likely to be a cause of concern for some employers on the basis that they seek to place considerably more responsibility on them. Questions remain about how many of Labour’s proposals will work in practice, particularly in respect of the proposed changes in employment status and how the already overwhelmed tribunal system would cope with an influx of new claims that new day 1 rights would almost certainly bring. Employees may however welcome enhanced rights in a number of areas. Conservative’s more modest proposals indicate a belief that the current rights and protections do not require such dramatic change. In contrast to Labour’s widening of the scope for bringing claims, let’s not forget that in addition to the proposals set out in their manifesto, the understanding is that the Conservatives will continue with their plans to re-introduce fees in the employment tribunal (see our article on that here). With rarely a dull moment, the path for employment law in future will continue to be one to watch.

We may see more employment-related election promises released in the lead up to the election and we will bring you further information as and when more details (if any) emerge.