As anticipation builds for the General Election on 4 July 2024, the Labour, Conservative and Liberal Democrat parties have launched their manifestos. Our employment and immigration team takes a look at what the election might mean for UK businesses.
Labour
Polling suggests that Labour have as much as a 20 point lead ahead of the Conservatives and look set to form the first Labour government for 14 years. They have promised to introduce new employment legislation within 100 days and to continue pursuing a reduction in net migration to the UK.
Employment
Detailed proposals for changes to employment law are set out in what Labour is calling its ‘Plan to Make Work Pay’. Proposals laid out in the Plan cover areas as wide ranging as equality and equal pay, TUPE and ‘fire and rehire’ and the law on industrial action.
Key areas for reform which employers and HR professionals should be aware of include:
- Claims - Labour says it will increase time limits for bringing a Tribunal claim from three to six months, giving employees more time to raise a claim. This would bring the time limit for all claims in line with the current limit for statutory redundancy and equal pay claims. In positive news for employers, the proposal to lift the cap on unfair dismissal awards has been dropped.
- Day one rights - Under Labour, ‘basic individual rights’ will become available from day one, including protection from unfair dismissal, parental leave and sick pay. There is however a concession to employers in that probationary periods could still be used for new employees. Businesses will no doubt be concerned about increased costs and procedural burdens, although Labour argues that employers will benefit from a boost to the labour market with employees no longer incentivised to stay in the same job to access employment rights.
- Replace the distinction between ‘workers’ and ‘employees’ with a single employment status of ‘worker’ - A simplified framework for classifying members of the UK workforce could introduce some much needed clarity to employment law - this could be welcome news for employers and employees alike. It does however also imply the extension of employee-only rights to all workers, which could mean increased costs for employers with a large casual workforce.
- Changes to parental leave, sick pay and carer’s leave - A number of employee friendly changes to time off work are proposed including: removing the lower earnings limit and waiting period for statutory sick pay, making parental leave a day one right, and considering the introduction of paid carer’s leave, building on the right to unpaid carer’s leave introduced by the Conservative Government in the Spring.
Other proposed changes include ending ‘fire and rehire’, banning ‘exploitative’ zero hours contracts and setting up a single enforcement body to enforce workers’ rights.
But how much will really change within the first 100 days? Many proposed changes would require significant consultation and could take years to implement – including creating a new framework of employment status or making changes to equal pay reporting (an introduction of pay gap reporting for ethnicity and disability has been proposed). Some changes will however be easier to bring in, so we might expect the introduction of a single enforcement body and tweaks to statutory sick pay to come in relatively quickly.
Immigration
The Labour manifesto seeks to reduce net migration through a reform of the points-based system and cracking down on abuse of the visa system – a goal not at all out of step with the current government’s aims.
Specifics on immigration proposed by Labour include:
- Barring employers who breach employment or immigration law from hiring workers from abroad - This sounds similar to existing sanctions under the sponsorship system, so it remains to be seen what Labour might do differently on this front. Employers should remain alert to potential changes in this area.
- Create an integrated strategy to address skills shortages, where improving working conditions sits alongside filling vacancies through migration - Despite the focus on reducing net migration, there is an acknowledgment here of the need for migration in certain sectors. Particular sectors that would be the likely focus of this include health, social care and construction. Labour has also committed to implement workforce training plans in these sectors to address labour shortages by means beyond immigration.
- Strengthen the Migration Advisory Committee (MAC) and establish a framework for joint working with skills bodies, the Industrial Strategy Council and the DWP - These changes could bring a positive increase stakeholders’ ability to influence immigration policy both through the MAC and directly, in the case of skills bodies (who can currently only make representations via the MAC).
Despite previous comments on the issue, Labour’s manifesto is notably silent on the new salary thresholds for skilled workers and Minimum Income Requirements for family visas and does not commit a new Labour government to reviewing these.
Conservatives
Employment
The Conservative manifesto is distinctly lacking in explicit references to employment law. We would expect the legislative programme of a re-elected Conservative government to proceed on a similar basis to the current Government. This would likely include:
- Continued reform of industrial action laws
- Addressing aspects of discrimination law, especially in connection with the definition of ‘sex’
- Regulating NDAs and reforming post-termination non-compete clauses
- Reintroducing employment tribunal fees
There are two (fairly minor) employment related proposals which can be gleaned from the manifesto:
- Overhaul the fit note system - Responsibility for issuing fee notes would be moved away from GPs to ‘specialist’ work and health professionals – which its suggested could prevent employees being signed off sick as a default.
- Continue to implement minimum service level agreements in industrial action - This contrasts with the position of the Labour party, which has committed to repeal the Strikes (Minimum Service Levels) Act 2023 and other legislation brought in by the Conservatives with a restrictive effect on industrial action.
Immigration
Again, we would expect the current Government’s general approach to continue. Immigration remains a major focus, with a section of the manifesto dedicated to plans to ‘control immigration’.
Key points on immigration include:
- Introduce a “binding, legal cap” on migration - The Migration Advisory Committee (MAC) would be asked to recommend the level of the cap each year, to be voted on by Parliament. Although the manifesto claims that the cap “cannot be breached”, the details of how it would be implemented or enforced are not clear.
- Raise Skilled Worker minimum salary thresholds (and minimum income requirements for family visas) with inflation - This follows on from the significant increase in both the salary thresholds for Skilled Workers and the minimum financial requirements for family visas introduced in Spring 2024. Although inflationary rises will not see individual increases as stark as those we saw earlier in the year, this could cause difficulties for employers and skilled workers if wages do not keep pace with inflation.
- Changes to the Immigration Health Surcharge - The Conservative manifesto proposes health checks for all migrants, with those deemed likely to be a “burden on the NHS” required to pay a higher IHS or purchase health insurance. This would mean a loss of predictability for visa applicants, and for the minority of employers who cover the IHS for sponsored workers. The student discount on the IHS would also be abolished.
- Reforms to the graduate visa route - Previous intentions to restrict the graduate visa route are not mentioned directly in the Conservative manifesto, and more modest reforms now seem to be the focus. Although the proposals are lacking in detail, the Conservatives claim they would aim to ensure that international graduates “are able to integrate into communities and participate in the economy”.
Liberal Democrats
Finally, this Liberal Democrats have made a number of commitments in their manifesto which indicate the positions their MPs might take in the Commons over the next five years.
The LibDem manifest makes a number of proposals on employment law, including:
- Increasing the minimum wage by 20% for people on zero-hour contracts at ‘times of normal demand’
- Encourage employee ownership by giving employees in large business a right to request shares
- Remove the lower earnings limit for Statutory Sick Pay and support small employers with the cost of paying SSP
- Expand parental leave and pay, including by making them day one rights
On immigration, headline proposals include:
- Overhaul and simplify the Immigration Rules, and extend the participation of devolved governments in UK immigration policy
- Introduce a merit-based system for work visas, ending the salary threshold system
- Reverse the ban on care workers bringing dependents to the UK and exempt NHS and care staff from the Immigration Skills Charge
Conclusion
While a Labour government is indicated by the polls, there is no crystal ball that tells us what is to come after 4 July. On employment, things look set to keep moving in the direction of increasing flexibility for employees and there is a cross party focus on tackling “one-sided” flexibility inherent in arrangements such as zero-hour contracts. It also seems likely that leave entitlements will continue to expand, especially in relation to family leave and sick leave.
On immigration, the tone of the two main parties continues to pursue a narrative of reducing migration and cracking down on abuse of the system. People moving to the UK and the organisations that employ them can expect the complex and sometimes hostile immigration system to remain in place for the foreseeable future.
