What does the general election mean for employment law?

As the general election approaches on 4 July 2024, the potential for significant shifts in employment law becomes apparent. Depending on the election's outcome, many proposed changes could be paused, delayed, or even dropped altogether, shaping the future of employment law. Samantha Randall of the Essex-based law firm Birkett Long examines these possible changes.

The current employment law changes hanging in the balance

As of 30 May 2024, Parliament was dissolved, and therefore, any unfinished legislation has effectively fallen away unless and until reintroduced in the next Parliament.

The employment law changes organisations had expected to see later in 2024 and beyond included:

• Plans to tighten up rules around ‘fire and rehire’ practices.
• The reintroduction of employment tribunal fees.
• Plans to limit the duration of non-compete clauses in employment contracts.
• Further reform of industrial action laws, including the introduction of minimum service levels during strikes in hospitals and schools.

There are also several employment laws that have received Royal Assent but have not been implemented. These are:

• A requirement for employers to give all tips and gratuities to workers without any deduction. The law received Royal Assent but has not been enacted, with its implementation recently delayed until October.
• A new right for workers to request a more predictable working pattern was expected in September 2024. This was brought in under the Workers (Predictable Terms and Conditions) Act 2023, which received Royal Assent last year.
• A proactive duty to prevent sexual harassment at work, under Worker Protection (Amendment of Equality Act 2010) Act 2023. This received Royal Assent last year, with an expected implementation date in October 2024.
• The Neonatal Care (Leave and Pay) Act 2023 gives parents the right to take up to 12 weeks of paid leave if their baby requires specialist care after birth, which is due to come into force in April 2025.
• Plans to lower the pensions auto-enrolment age from 22 to 18 under the Pensions (Extension of Automatic Enrolment) Act 2023, which received Royal Assent last year.

These laws that have already received Royal Assent will remain on the statute books unless a new government passes laws to repeal them.

Several consultations had also recently been launched around proposed changes to:

The Fit Note system in England by moving responsibility for assessing fitness to work away from GPs to “specialist work and health professionals”.

TUPE, including clarifying who it applies to and ensuring that employees can only be transferred to one new employer in situations where there are multiple parties.

Dental graduates and requiring them to work in the NHS for several years after graduating or repay their training fees.

The deadlines for existing consultation periods would likely be extended to allow all parties sufficient time to respond. However, it remains to be seen what will happen, as this will be down to the newly elected government.

The future of employment law

Depending on the election outcome, employment law may undergo unprecedented changes. We look at the manifestos of the main political parties and their promises regarding employment law reform.

The Conservative Party

The Conservative Party’s 2024 Manifesto states they propose to:

• Overhaul the fit note process so that people are not being signed off sick as a default. Currently, 94% of fit notes are being signed off as ‘not fit for work’. They propose to design a new system which moves the responsibility for issuing fit notes away from GPs towards specialist work and health professionals to help people stay in or get back to work. 
• Cut tax for workers by taking another 2p off employee National Insurance so that they will have halved it from 12% at the beginning of this year to 6% by April 2027, a total tax cut of £1,350 for the average worker on £35,000.
• To limit the impact of industrial action on public services and balance the ability of workers to strike with the rights of the public.
• Maintain the National Living Wage in each year of the next Parliament at two-thirds of median earnings.
• Create 100,000 more apprenticeships in England every year by the end of the next parliament.
• Raise the Skilled Worker threshold and Family income requirement with inflation automatically to make sure they don’t undercut UK workers.

Labour Party

The Labour Party’s 2024 Manifesto states they propose to:

• Establish a youth guarantee for all 18- to 21-year-olds, ensuring access to training, apprenticeships, or support to find work. This aims to reduce the number of young people not in education, employment, or training.
• Guarantee two weeks of work experience for every young person and improve careers advice in schools and colleges.
• Enhance in-work security, better pay, and more autonomy in the workplace, bringing substantial economic benefits.
• Updating Employment Laws
• Tackle Job-Related Poverty
• Create a partnership between business and trade unions by implementing 'Labour’s Plan to Make Work Pay: Delivering a New Deal for Working People.' Legislation will be introduced within 100 days, with full consultation with businesses, workers, and civil society.
• Ban zero hours contracts, end fire and rehire practices, and introduce basic rights from day one for parental leave, sick pay, and protection from unfair dismissal.
• Strengthen the collective voice of workers through their trade unions and create a Single Enforcement Body to uphold employment rights.
• Ensure the minimum wage is a genuine living wage by changing the remit of the independent Low Pay Commission to account for the cost of living. Discriminatory age bands will be removed so all adults are entitled to the same minimum wage, resulting in a pay rise for many workers across the UK.
• Introduce parental leave, sick pay and unfair dismissal protections from day one of employment.

The Liberal Democrats

The Liberal Democrats 2024 Manifesto states they propose to:

• Encourage employers to 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.
• Reform fiduciary duty and company purpose rules to ensure that all large companies have a formal statement of corporate purpose, including considerations such as employee welfare, environmental standards, community benefit and ethical practice, alongside benefit to shareholders, and that they report formally on the wider impact of the business on society and the environment.
• Invest in people’s skills by:
  • Replacing the broken apprenticeship levy with a broader and more flexible skills and training levy.
  • Boosting the take-up of apprenticeships, including by guaranteeing they are paid at least the National Minimum Wage by scrapping the lower apprentice rate.
  • Creating new Lifelong Skills Grants for adults to spend on education and training throughout their lives.
  • Developing National Colleges as national centres of expertise for key sectors, such as renewable energy, to deliver the high-level vocational skills that businesses need.
  • Identifying and seeking to solve skills gaps, such as the lack of advanced technicians, by expanding higher vocational training like foundation degrees, Higher National Diplomas, Higher National Certificates and Higher Apprenticeships.
  • Improving the quality of vocational education and strengthening careers advice and links with employers in schools and colleges, as set out in chapter 8.
• Fix the work visa system and expand the Youth Mobility Scheme, as set out in chapter 18, to help address labour shortages. 
• Establish a new Worker Protection Enforcement Authority unifying responsibilities currently spread across three agencies – including enforcing the minimum wage, tackling modern slavery, and protecting agency workers.
• Establish an independent review to recommend a genuine living wage across all sectors, with government departments and all other public sector employers taking a leading role in paying it. 
• Modernise employment rights to make them fit for the age of the ‘gig economy’, including by:
  • Establishing 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.
  • Reviewing the tax and National Insurance status of employees, dependent contractors, and freelancers to ensure fair and comparable treatment.
  • Setting a 20% higher minimum wage for people on zero-hour contracts at times of normal demand to compensate them for the uncertainty of fluctuating hours of work.
  • Giving a right to request a fixed-hours contract after 12 months for ‘zero hours’ and agency workers, not to be unreasonably refused.
  • Reviewing rules concerning pensions so that those in the gig economy don’t lose out, and portability between roles is protected.
  • Shifting the burden of proof in employment tribunals regarding employment status from individual to employer.
• Expand parental leave and pay, including making them day-one rights.
• Making Statutory Sick Pay available to the more than one million workers earning less than £123 a week, most of whom are women.
  • Aligning the rate with the National Minimum Wage.
  • Making payments available from the first day of missing work rather than the fourth.
  • Supporting small employers with Statutory Sick Pay costs, consulting with them on the best way to do this.
• Improve diversity in the workplace and public life by:
• Requiring large employers to monitor and publish data on gender, ethnicity, disability, and LGBT+ employment levels, pay gaps and progression, and publish five-year aspirational diversity targets.
• Extending the use of name-blind recruitment processes in the public sector and encouraging their use in the private sector.
• Providing additional support and advice to employers on neurodiversity in the workplace and developing a cross-government strategy to tackle all aspects of discrimination faced by neurodiverse children and adults.

The Green Party

The Green Party 2024 Manifesto states they propose to:

• A £40bn investment per year in the shift to a green economy over the course of the next Parliament
• A £12.4bn investment in skills and training, equipping workers to play a full role in the green economy.
• A carbon tax set initially at £120 per tonne of carbon emitted and rising over ten years to a maximum of £500 per tonne, would raise up to an additional £80bn
• Repeal of current anti-union legislation and its replacement with a positive Charter of Workers’ Rights, with the right to strike at its heart along with a legal obligation for all employers to recognise trade unions.
• A maximum 10:1 pay ratio for all private- and public-sector organisations.
• An increase in the minimum wage to £15 an hour, no matter your age, with the costs to small businesses offset by reducing their National Insurance payments.
• Equal employment rights for all workers from their first day of employment, including those working in the ‘gig economy’ and on zero-hours contracts. Gig employers that repeatedly break employment, data protection or tax law will be denied licences to operate.
• A move to a four-day working week.

Reform UK

Reform UK's "Our Contract With You“ states they propose to:

• Scrap thousands of laws they claim hold back British business and damage productivity, including employment laws, making it easier to hire and fire.
• Introduce reforms to benefit support and training will help people back into work. Particular focus on 16–34 year olds, with tax relief for businesses that undertake apprenticeships.
• Legislate to scrap EU Regulations with immediate effect. Britain still has over 6,700 retained EU laws, which we will rescind. British laws on state aid, competition, employment, net zero and the environment are still based on EU regulations.

Conclusion

Regardless of the election's outcome, it has already been a significant year for employment law, with the potential for even more historic changes. Samantha Randall, Associate Solicitor in the Employment team at Birkett Long, states that “regardless of the outcome of the election, is it clear that employment law is set to be subject to the biggest overhaul in decades with all main parties planning to revamp employment law if successful. It is therefore important that employers stay up to date in this fast-moving area of law over the coming months”.