The General Election: Parties’ proposals for employment law

The general election on 4 July is fast approaching, and whilst the televised debates and interviews focus heavily on the economy, immigration and other pressing matters, there has not been as much talk about the parties’ plans in terms of employment law reforms.

To help you get a quick grasp of what is in each of the ‘main’ parties’ manifestos for the employment law sphere, we have put together a short guide to their proposals.

Note that the proposals below relate to England, Wales and Scotland only. Employment law is devolved in Northern Ireland. The Northern Ireland Assembly will decide if any reforms should be extended to Northern Ireland.

(Parties are listed in alphabetical order).

The Conservatives:

The Conservatives seem to be largely relying on the status quo and their continued plans for deregulation, to remain attractive to business and focus on economic recovery and growth. The Conservative party’s 80-page manifesto is (perhaps unsurprisingly) limited on their plans for employment law changes, however, the main highlights are:

  • Overhaul the fit note process – it seems that there is an intention to introduce a more rigorous process when individuals seek to obtain Fit Notes during a sickness absence from work. The Conservatives plan on designing a new system which shifts the responsibility of issuing fit notes away from GPs, towards specialist work and health professionals. This will be integrated with a newly planned WorkWell service which aims to provide tailored support to help people return to work.
  • Amending Equality Act 2010 – the next Conservative government plan to introduce primary legislation to clarify that the protected characteristic of sex in the Equality Act means biological sex.
  • Maintaining National Living Wage – the Conservatives aim to maintain the National Living Wage in each year of the next parliament at two-thirds of median earnings.
  • Prioritising apprenticeships – the Conservatives plan on creating 100,000 more apprenticeships every year in England, by the end of next Parliament. The industries they wish to target to create these apprenticeships are in the media and music sectors. They plan on funding this by curbing the number of ‘poor-quality’ university degrees which are currently on offer.
  • Delivering the ‘Lifelong Learning Entitlement’ – this will provide adults with the support and funding to train, retrain and upskill flexibly throughout their careers and working life.
  • Cutting National Insurance contributions – they plan on reducing National Insurance by a further 2p, so that it will be at 6% by April 2027. They confirm that this would mean a total tax cut of £1,350 for those on £35,000 (average worker salary).
  • Minimum Service Levels legislation – they will continue to implement the Minimum Service Levels legislation to try to limit the impact of industrial action on public services, whilst also balancing the ability for workers to strike.

The Conservative manifesto can be found here: Conservative Manifesto 2024

The Labour Party:

Individuals will have more employment rights under Labour’s proposals.  There is also likely to be less flexibility for employers and increased costs. The Labour Party’s manifesto proposes a drastic change to the employment law sphere and these are clearly reforms that employers and employees should monitor closely. The main headlines of their plans are as follows:

  • Make unfair dismissal a ‘Day One’ employment right – the most significant of changes, Labour are planning to strengthen the rights of employees, by ensuring that they could claim for unfair dismissal from ‘day one’ of employment (subject to probationary periods). Currently employees can only claim for unfair dismissal after 2 years’ continuous service. There is a lack of clarity as to how the probationary period carve out will play out in practice, for instance how long can such period be and how diluted unfair dismissal rights will be during probation.
  • Remove the distinction between ‘employees’ and ‘workers’ – the difference between ‘employees’ and ‘workers’ is a bit of a grey area in law, and Labour would like to remove this distinction to give employment rights to all workers. There will in effect be two tiers of employment – the self-employed and workers. This will obviously have tax and National Insurance consequences for individuals and will create a larger pool of individuals with more significant employment rights.
  • Introduce a new ‘right to disconnect’ – Labour plan to ensure that employees have the right to disconnect from work and not be contacted by their employer outside of their working hours. This is like some European countries/companies, which introduced similar rights.
  • Extend the time limit for bringing tribunal claims – the current time limit to bring most employment claims is 3 months’ less one day.  Labour plan to increase this to 6 months, again with the aim of strengthening the rights of employees.
  • Ban zero-hours contracts – Labour plan to ban companies/businesses from hiring employees on “exploitative” zero-hours contracts. It is not clear if this is therefore an outright ban. The party pledge that any employee has a right to a regular contract, using a 12-week referencing period. In addition, employers will likely be required to provide reasonable notice of changes to shift times and compensate for cancelled shifts.
  • Statutory sick pay from day one – Labour plan to allow workers and those who are self-employed a right to be able to claim statutory sick pay from the first day they are absent from work due to sickness. At present, employees have to wait 3 days before they can receive statutory sick pay and self-employed individuals do not benefit.

There are further proposals from Labour regarding employment law, which can be found in their manifesto: Change Labour Party Manifesto 2024

Reform UK

Reform UK, similarly to the Conservatives, are not proposing a radical change to the current employment law landscape but focus more on tax changes and incentives for businesses.

  • Lift the income tax start point to £20,000 per year – Currently employees/workers will start paying income tax when they earn over £12,570 per annum. Reform UK would increase this threshold to £20,000. They plan to keep the basic rate of income tax at 20% but plan to introduce the higher rate of income tax at £70,000.
  • Abolish IR35 Rules to support sole traders –Reform UK claim in their manifesto that those who are self-employed often work longer hours, take more risks and that many have no pension and receive no sick pay. Therefore, they plan on abolishing IR35 rules.
  • Replace the 2010 Equalities Act – Within the first 100 days of government, if they get into power, Reform UK plan on replacing they Equalities Act 2010. They aim to scrap Diversity, Equality and Inclusion (DE&I) rules.

The Reform Party manifesto can be found here: Reform Party Manifesto

Whatever the polls say, it is clear that employment law changes (either small or drastic) are ahead, and employers and employees should carefully monitor this in the months and weeks which follow.

All information is true as at the date of preparing this article.