General election manifestos: what they mean for employers and employees

With the general election taking place on Thursday 4^th July, all parties have released their manifestos to help the public decide who will be our next Prime Minister; but what does this involve for employers and employees?

As the election nears, our employment law solicitors summarise the proposed key changes set out in each party’s manifesto.

Parties are listed in alphabetical order.

Conservative party

The Tories have 80 pages of proposals in their ‘Clear Plan, Bold Action and Secure Future’ manifesto, however, there are small changes that will affect employment law:

• National Insurance to be halved from 12% to 6% by April 2027
  Self-employed workers will have their main rate of National Insurance abolished by the end of the next Parliament which will not affect their entitlement to the State Pension.
• Overhaul of the ‘fit note’ process
  94% of fit notes are signed off as ‘not fit for work’. GPs will no longer be responsible for providing these, with the responsibility shifting to other healthcare professionals.
• Minimum Service Levels
  To limit the impact of industrial action on public services, e.g. health, fire and rescue and education services, and balance the ability of workers to strike with the rights of the public; ensuring the public can continue to access services they rely on during strike action. Minimum Service Levels legislation will stay in place.

Read the Conservatives’ full manifesto here.

The Green Party

The Green Party promises to ‘create a greener, fairer country together – one in which we are all safer, happier and more fulfilled’ and has proposed the following changes:

• Capital Gains Tax (CGT) will be reformed to align the rates paid by taxpayers on income and taxable gains affecting less than 2% of all income taxpayers.
• Pay rises
  • An increase in pay rates will be introduced as well as a career structure to rebuild the care workforce.
  • A maximum of 10:1 pay ratios for all private and public-sector organisations.
  • The minimum wage will increase to £15 per hour regardless of age with the costs to small businesses offset by reducing their National Insurance payments.
  • An increase in school funding of £8bn, to include £2bn for a pay uplift for teachers.
  • Tax rates on investment income with the tax and National Insurance Contribution rates on employment income.
• The Upper Earnings Limit that restricts the amount of National Insurance paid by high earners will be removed.
• Workers’ Rights
  Repeal of current anti-union legislation 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.
• Equal employment rights
  • All workers from their first day of employment will be entitled to equal employment rights, including those working in the ‘gig economy’ and on zero-hours contracts.
  • Gig employers that repeatedly break employment, data protection, or tax laws will be denied licenses to operate.
• A move to a four-day working week (they have not specified which sectors)

Read the Green Party’s full manifesto here.

Labour

Labour’s manifesto for change is a plan to kickstart economic growth by reforming Britain’s economy and bring about a decade of renewal.

The key proposed changes for employment are:

• Zero-hour contracts
  ‘Exploitative’ zero-hour contracts will be banned, with Labour ensuring everyone has the right to a contract that reflects the number of hours they regularly work, based on a 12-week reference period.
• Day-one rights to sick pay, parental leave and unfair dismissal will be introduced with probationary periods to have a special status.
• Altering the criteria for determining national minimum wage including considerations of the cost of living and removing age bands.
• A ‘Fair Pay Agreement’ will be created to allow for sectoral collective bargaining in the Adult Social Care Sector.
• Workers’ rights
  • Ending dismissal and rehire.
  • A single enforcement body will be set up to enforce workers’ rights.
• Taxes will not be increased on National Insurance, the basic, higher, or additional rates of Income Tax, or VAT.

Read Labour’s full manifesto here.

Liberal Democrats

The Liberal Democrats’ motto for the election is ‘For a Fair Deal’. They plan to impose the most changes that will affect employment law.

The Lib Dems plan to change:

• Statutory Sick Pay (SSP): the party aims to make SSP more accessible by:
  • Making it available to over one million workers earning less than £123 a week.
  • 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 SSP costs.
• Upholding the Equality Act 2010
  ‘Caring’ will become a protected characteristic under the Equality Act 2010 which will require employers to make reasonable adjustments for employees who care for others so they can carry out their caring responsibilities.
• Zero-hour contracts
  • Those on a zero-hours contract will have their minimum wage increased by 20% at times of normal demand to compensate for the uncertainty in their hours.
  • Zero-hours and agency workers will also be given a ‘right to request’ a fixed-hours contract after 12 months.
• Social care
  • A social care workforce plan will improve recognition and career progression and introduce a higher Carer’s Minimum Wage.
  • Unpaid carers will get support which will include paid carer’s leave and a statutory guarantee of regular respite breaks.
• Right to request shares
  Employers will be encouraged to promote employee ownership by giving staff who work for a company with more than 250 employees a right to request shares.
• Parental leave
  • The Lib Dems will extend parental leave and pay, making them day-one rights including for adoptive parents and kinship carers, and extending them to self-employed parents.
  • Statutory Maternity and Shared Parental pay will be doubled to £350 a week with 46 weeks of parental leave to be shared between the two.
  • Paternity leave pay will be increased to 90% of earnings with a cap for high earners.
• Disability help
  • The Access to Work scheme will become simplified and specialist disability employment support will be introduced.
  • ‘Adjustment Passports’ will record the adjustments, modifications and equipment a disabled person has received, and ensure that
  • Access to Work support and equipment stays with the person if they change jobs.
• Diversity
  Large employers will be required to publish data on gender, ethnicity, disability, and LGBT+ employment levels, pay gaps and progression and publish five-year aspirational diversity targets.
• Paid neonatal care leave
• Policies and recruitment processes
  • Large employers will be required to publish their parental leave and pay policies.
  • Name-blind recruitment processes will be extended.
• Employment tribunals
  The burden of proof in employment tribunals will shift from individual to employer.
• Dependent contractor employment status
  A new ‘in between employment and self-employment’ status will be established, with entitlements to basic rights such as minimum earnings levels, sick pay and holiday entitlement.
• Pensions will be reviewed so the transfer between roles is protected

Read the Liberal Democrats’ full manifesto here.

Reform UK

The Reform party has announced that only their party can secure Britain’s future as a free, proud and rich nation. Proposed employment changes will mainly affect employers and include:

• Income Tax start point is to be lifted to £20,000 per year with the basic tax rate staying at 20% and the higher rate at 40 to begin at £70,000 per year.
• Corporation Tax
  • Over 1.2 million small and medium-sized businesses will be exempt from Corporation Tax with the minimum profit threshold to be lifted to £100,000.
  • The main Corporation Tax rate will be reduced from 25% to 20%, then to 15% from year five.
• IR35 rules will be abolished to support sole traders.
• VAT threshold to be lifted to £150,000.
• Support small and medium-sized enterprises
  • Business rates for high street-based small and medium-sized firms will be removed and offset with online delivery tax at 4% for large, multinational enterprises.
  • Entrepreneur’s tax relief will be cut to 5%.
• Illegal workers
  • Significant penalties will be imposed on companies and directors that breach the hiring of illegal workers.
  • National Insurance will be raised to 20% for foreign workers.
• NHS staff:
  All frontline NHS and social care staff will pay zero basic rate tax for three years.
• Benefits
  • Tax relief will be available for businesses that undertake apprenticeships.
  • A two-strike rule for job offers will be introduced for those claiming benefits.
  • All job seekers and those fit to work must find employment within four months or accept a job after two offers otherwise benefits are withdrawn.
• Basic pay will be increased across the armed forces.
• Agriculture
  Many farmers spend over 15 hours a week on paperwork. Red tape will be cut from HMRC and the British Cattle Movement service.
• Replace the 2010 Equality Act
  Diversity, Equality and Inclusion (DE&I) rules will be removed.

Read the Reform Party’s full manifesto here.

Contact our employment solicitors

Although the proposed changes won’t come into effect until at least after 4^th July, being prepared for what this may mean for you as an employer or an employee is key.

If you’d like to speak to any of our employment lawyers regarding the proposed upcoming changes, get in touch.

For an initial chat, call us on 0117 325 2929 or fill out our online enquiry form.