By Phoebe Gogarty, Associate Solicitor at Swinburne Maddison LLP
There are many promises of change ahead of the General Election on the 4th of July 2024, which differ greatly between the three main parties. From bringing back National Service to redefining Employment Status, we break down the key proposals that employers need to know.
Will there be any change to pay, tax, and NI contributions?
The Conservatives have pledged to reduce employee NI contributions to 6% and maintain the National Living Wage (NLW) at two-thirds of median hourly earnings by October 2024. Similarly, Labour proposes to link the NLW to the cost of living, while the Liberal Democrats plan to conduct an independent review to establish a ‘genuine’ living wage.
Additionally, Labour aims to implement a total ban on unpaid internships not connected to an educational or training course.
Will employees gain additional employment rights?
Labour has proposed significant changes to the right not to be unfairly dismissed after two years of qualifying service. Under Labour’s new proposal, this right would become a day one entitlement, removing any service-related eligibility for the first time. They also plan to update the code of practice on ‘fire and rehire’ to strengthen employee protections, meaning employers would need more than a substantial reason to change existing terms of employment. Further details of this proposed threshold are awaited.
Labour also intends to introduce new rights for greater predictability in working patterns by banning ‘exploitative’ zero-hours contracts and creating a right to an average-hours contract for hours regularly worked, based on a 12-week reference period, though no minimum number of hours has been specified.
The Liberal Democrats propose that zero-hours contract workers receive a 20% increase on their minimum wage during ‘normal demand’ periods to compensate for times when no hours are available. For agency workers, they would introduce a right to request fixed-hours after 12-months of service, which employers could not unreasonably refuse. Additionally, they propose a new right for disabled employees to work from home unless significant business reasons prevent it, with a higher threshold for employer refusal than for statutory flexible working requests.
Will there be changes to sickness absence or familyfriendly leave?
The current Statutory Sick Pay (SSP) waiting period is three days, making the fourth day of sickness absence the first eligible day for payment of SSP. Labour proposes to scrap this waiting period and the current Lower Earnings Limit to ensure eligibility for pay is available from day one for all employees.
The Liberal Democrats propose more extensive changes, including implementing Labour’s above suggestions and increasing the SSP rate to match the National Minimum Wage.
The recently increased protections against redundancy for those returning from maternity leave around the right to suitable alternative employment is to be further strengthened by Labour’s plan to ban dismissals for a six-month period after their return.
Currently, there is no statutory right to bereavement leave, leaving this to the discretion of employers. Labour intends to introduce a right to take compassionate leave but has not specified the fixed period or whether it must be paid.
The Liberal Democrat propose significant changes in this area, including a new day-one right to parental leave, removing the current one-year service eligibility requirement. In addition, they also propose new statutory rates for maternity pay and shared parental pay at 90% of earnings (subject to a cap) and an additional month of paternity leave with the same increased statutory rate of pay.
Will there be any amendments to equality and discrimination protections?
The Conservatives propose to clarify the existing protected characteristic of ‘sex’ under the Equality Act 2010 to read ‘biological sex’. This change would limit reliance on this characteristic by trans people to their assigned sex at birth, regardless of whether they hold a Gender Recognition Certificate.
A new duty on employers to take reasonable steps to protect employees from sexual harassment is set to come into force in October 2024. Labour proposes raising this threshold to ‘all reasonable steps’ and treating harassment as whistleblowing. This would allow employees to seek interim relief for their salary if their dismissal is linked to the harassment.
Following the outcome of 4 July’s vote, employers must be alert to the imminent announcements as to which proposals will be actioned and how they will affect their workforce. If you have any questions or concerns about the implications of the proposed changes for your business, please do not hesitate to contact the Swinburne Maddison employment law team for advice. You can also visit our website at swinburnemaddison.co.uk for more information and updates on the latest employment law developments.
www.swinburnemaddison.co.uk