Employment Law and the Manifestos

United Kingdom

Over the last fortnight the major political parties in the United Kingdom have released their election manifestos, outlining various employment law changes if they are elected. Common themes across the manifestos include changes to workers’ rights in the gig economy, parental rights, the pay gaps (gender and others) and new ways of enforcing employment rights - as well as some unique approaches to certain issues. The highlights are covered below.

Conservative Party

Not surprisingly as the party in power, the Conservative manifesto mostly sets out steps already taken or in contemplation, including:

  • creating a single enforcement body to crack down on employers abusing employment law;
  • scrapping exclusivity clauses in zero-hours contracts;
  • increasing the National Living Wage to two-thirds of average earnings and extend it to those over the age of 21 (it currently applies only to those aged 25 and over);
  • "considering" how to make it easier for fathers to take paternity leave;
  • reforming redundancy law so companies cannot discriminate against women immediately after returning from maternity leave;
  • publishing a National Strategy for Disabled people and reducing the disability employment gap;
  • introducing a new £3 billion National Skills Fund to provide matching funding for individuals and SMEs for high-quality education and training;
  • introducing an Australian-style points-based immigration system, meaning most people will require a clear job offer before coming to the UK and the introduction of bespoke visas for those who will make “the biggest contribution”;
  • freezing the rates of income tax, National Insurance and VAT; and
  • increasing the National Insurance threshold to £9,500 in 2020.

Labour Party

The proposals in their manifesto promise "the biggest extension of workers' rights in history"; a bold pledge indeed. Given the scale of the proposed reforms in the Labour Party's manifesto, we have selected some of the key proposals below:

  • creating a single status of ‘worker’ for everyone apart from those genuinely self-employed in business on their own account;
  • providing "everyone" full employee rights from day one on the job;
  • introducing Real Living Wage of at least £10 per hour for all workers aged 16 or over;
  • banning zero-hours contracts;
  • giving workers a stake in the companies they work for – and a share of the profits they create by requiring large companies to set up Inclusive Ownership Funds;
  • giving all workers the right to request flexible working;
  • reducing the average full-time weekly working hours to 32 across the economy within a decade, and mandating bargaining councils to negotiate reductions in working time;
  • introducing mandatory pay-gap reporting for companies with over 250 employees in relation to disability, extending pay gap reporting in relation to race and introducing equal pay legislation to address gender pay equality for the first time;
  • taking action to close the gender pay gap by 2030;
  • mandating that employers with over 250 employees obtain “government certification” on gender equality or face further auditing and fines - this will be lowered to workplaces with 50 employees by the end of 2020; 
  • increasing redundancy protections;
  • reviewing the proposed IR35 changes;
  • strengthening disability law including introducing disability leave; and
  • creating a single enforcement body (the Workers' Protection Agency) to enforce workplace rights. 

The Labour Party has also published its Race & Faith manifesto which pledges to extend pay gap reporting on ethnic minority grounds, tackle race pay discrimination and enhance the powers of the Equality and Human Rights Commission. It also promises to establish a Race Equality Unit within the Treasury to work alongside a new department for Women and Equalities.

Liberal Democrat Party

There are several proposed employment law reforms that are focussed on providing people with secure jobs, increased rights and fair pay. Employment law changes include: 

  • conducting an independent review to consult on how to set a genuine Living Wage across all sectors;
  • establishing a new Worker Protection Enforcement Authority;
  • legislating to provide flexible working from the first day on the job;
  • modernising employment rights to make them fit for the new gig economy. This will include establishing a new ‘dependent contractor’ employment status in between employment and self-employment; setting a 20% higher minimum wage for people on zero hour contracts and giving a right to request a fixed-hours contract after 12 months for ‘zero hours’ and agency workers, not to be unreasonably refused;
  • reviewing the proposed IR 35 changes;
  • develop a scheme to reward employers who invest in the mental wellbeing of their employees, piloting reduced business rates for employers who support employees’ mental wellbeing and provide mental health first aid training to staff; and
  • reforming immigration rules to enable industry bodies to sponsor work visas.

Scottish National Party

The most significant of the SNP's proposals is the plan to push for the devolution of employment law. Currently the majority of employment law is reserved to Westminster although some variations exist. The employment aspects of their manifesto are based on them securing the devolution of employment law with the aim of protecting workers’ rights by increasing the living wage and ending "the age discrimination of the statutory living wage".

Within Westminster, the SNP also plans to:

  • call on the UK Government to adopt the SNP’s Fair Work First approach – championing the Real Living Wage and opposing exploitative zero hours contracts;
  • push for tougher action to close the gender pay gap, including introducing fines for businesses that fail to meet agreed standards;
  • call on the UK government to take steps to extend auto-enrolment, so that more low paid and self-employed workers can benefit from regular pension savings;
  • push for reforms regarding parental rights, including increases to maternity pay, an increase in the length of paternity leave and pay for it, and an additional 12 weeks of shared parental leave; and
  • support a reduction in employers' National Insurance contributions, to help firms with the cost of creating new jobs;
  • call for greater worker representation on company boards; and
  • oppose Conservative plans to introduce a minimum salary threshold, preventing anyone earning less than £30,000 from being admitted to the UK.

Green Party

The Green Party’s manifesto is primarily focussed on the Green New Deal and the Green Quality of Life Guarantee. However, the manifesto is also focussed on the premise of a secure and basic income for all, and as a result several employment law proposals are promised.  If the Green Party holds a position of power or influence post-election, the major parties may need to consider the key Green Party proposals being put forward, including:

  • increasing the Living Wage to £12 and extending it to workers aged between 16 and 21;
  • legislating to ensure that the maximum wage paid to any member of staff in an organisation should not exceed ten times that paid to the lowest paid worker in the same organisation. Bonuses that exceed the annual wage of the lower paid worker will also be banned;
  • ensuring that gig economy workers receive the minimum wage, have job security, "sick leave", holiday pay and a pension provision;
  • requiring all large and medium size companies to carry out equal pay audits;
  • changing the law so it is easier to act against employers in unequal pay cases;
  • installing a 40% quota for women on major company boards;
  • requiring all employers to legally recognise any union chosen by their workforce to represent them;
  • establishing a cross-government strategy to tackle ethnic inequalities;
  • investing £2 billion a year in training and skills (including new apprenticeships); and
  • merging employees National Insurance, Capital Gains Tax, Inheritance Tax, Dividend Tax and Income Tax into a single Consolidated Income Tax.

Final thoughts

An interesting talking point relates to IR35. Although the issue was not covered in their manifesto, the Conservatives have recently said that they will review the IR35 changes which are due to come into effect next April, a view echoed by both Labour and the Liberal Democrats.  Our view is that employers should continue with their IR35 preparations until the position is clearer.

While this has been called the Brexit election, workers’ rights and employment law has still featured in the campaigns. The Labour Party's manifesto undoubtedly looks to be the most transformational in this area. At the date of writing the polls are still supporting a Conservative return to power. If that is the case, then the key issue in relation to the economy and workers’ rights will once again depend on whether there is a deal or no deal.