The general election is just over a week away and there are many policy proposals in the main political parties’ manifestos that will draw the eyes of HR leaders.
Among them are promises to strengthen workers’ rights, reform of the apprenticeship system and tackle worsening economic inactivity.
Read on for the key policy changes affecting HR and the workplace that have been proposed by each of the main parties.
Labour
Workers’ rights
Labour claims that Britain’s “outdated employment laws are not fit for the modern economy”, and promises to improve pay and security for workers.
In order to achieve this, Labour has pledged to introduce a raft of workers rights reforms in their first 100 days of office. These include banning zero-hours contracts, ending the practice of fire and rehire and introducing day-one rights for sick pay, parental leave and unfair dismissal.
A new enforcement body has also been proposed to ensure that companies adhere to employment regulation. This is something backed by the Recruitment and Employment Confederation (REC).
“Enforcing these regulations is what roots out the bad practice and gives a competitive edge to the good and great UK businesses out there,” says REC deputy chief executive Kate Shoesmith. “But any new enforcement body needs to be resourced effectively, responsible for the entire labour supply chain and really understand today’s flexible labour market and how people choose to work.”
Regarding pay, a Labour government would require the Low Pay Commission, an independent body that advises the government on the minimum wage, to account for the cost of living in its calculations. The party would also scrap age bandings, which set different living and minimum wages for those aged under 21.
While Labour had touted the possibility of introducing a ‘right to disconnect’, it’s promise to ban employers from contacting staff outside of working hours was dropped from its manifesto.
Skills
A Labour government would establish a new public body called Skills England, which will bring together business, training providers and unions to improve training opportunities and close skills gaps.
Under Labour’s plans, all 18-to 21-year-olds will be guaranteed an apprenticeship, training or support to find work. In addition, every “young person” will be guaranteed two weeks’ worth of work experience.
The apprenticeship levy is set for an overhaul under Labour and would be replaced by a flexible Growth and Skills Levy, which the party claims will expand the range of eligible courses and “ensure that qualifications offer value for money”.
Starmer’s party has also announced plans to reform the points-based immigration system and link it to skills policy. The manifesto also warns that employers who flout the visa system and break employment law will be barred from hiring workers from abroad.
Addressing economic inactivity
Jobcentre Plus and the National Careers Service will also be brought together to help more people into work and address the issue of economic inactivity. As part of this change, Labour promises the service will be “responsive” to the needs of local employers.
Shoesmith suggests that this could help to tackle current skills shortages but only if they are “funded sufficiently” and draw on insights from recruiters and businesses.
There is the potential for the Work Capability Assessment to be replaced under a Labour government, as part of its plans to help more disabled people into work and address the backlog of Access to Work claims.
Labour has also pledged to help employers to hire ex-offenders, but there is no detail on how this would be achieved.
Pay gap reporting
Labour has proposed a Race Equality Act, which will legally guarantee equal pay for Black, Asian and other ethnic minority workers.
Disability and ethnicity pay gap reporting will also be made a requirement for all large employers and will be handled similarly to current gender pay gap reporting rules.
Conservatives
Pay and tax
As part of the Conservative party’s pledge to support working people, the Tories have promised to make a 2p cut to national insurance by April 2027. The main rate of national insurance will be abolished entirely for those who are self-employed.
The Tory manifesto also promises to continue to match the National Living Wage to two-thirds of median earnings. The party predicts this will see the living wage increase to £13 per hour, if it remains in government.
The national insurance relief offered since April 2021 to employers that hire veterans, will also be retained under a Tory government.
Skills
A pledge to introduce national service for all school leavers grabbed headlines at the start of the election cycle. Under this plan, 18-year-olds will have the option of a full-time military placement over 12 months or community service equivalent to one weekend per month for one year. The Conservative party suggests that this will “give young people valuable life skills and build a stronger national culture”.
The Conservatives have also promised to fund 100,000 “high-quality” apprenticeships by reducing the number of so-called ‘Mickey Mouse’ university degrees.
The previously promised Advanced British Standard – a new qualification for 16- to 18-year-olds – will bridge the gap between A levels and T levels under one “Baccalaureate-style” qualification.
Rain Newton-Smith, CEO of the Confederation of British Industries, says: “Moves to reduce tax on workers and increase the number of apprenticeships are, in isolation, welcome – but both are areas where a more holistic approach could unlock the business investment needed to deliver the shared goal of a high-productivity, high-growth economy.”
Addressing economic inactivity
The Conservative manifesto reiterates their 2023 commitment to introduce free childcare for working parents of all children aged nine months or older by September 2025. The party hopes this will allow more parents to return to work sooner.
An overhaul of the sick-note process has also been proposed. The Tories claim that, under the current system, 94% of those requesting sick notes are signed off as “not fit for work”. They hope that, by taking the responsibility away from GPs and giving it to work and health professionals, fewer people will be signed off work.
The Conservative manifesto also promises reform of the benefits system and tighter sanctions for those who refuse to take up suitable jobs after 12 months on benefits. Those with “more moderate” mental health issues or mobility problems will also be given tailored support to help them into work.
Liberal Democrats
Workers’ rights
The Liberal Democrats’ manifesto includes plans to encourage greater employee ownership of businesses. Under its plans, employees that work for companies with 250 employees or more will have the right to request shares in the business, through an employee trust.
Nick Hurley, partner and head of employment at law firm Charles Russell Speechlys, says: “On the face of it, this policy could foster a more inclusive and invested workforce or it could end up becoming just another right to request, with little franchise.”
The fiduciary duty of businesses will also be revised to ensure that all large companies are required to consider employee welfare, environmental standards, community benefit and ethical practice, alongside maximising profit for the benefit of shareholders.
The party plans to introduce a new ‘dependent contractor’ employment status, which will sit between employed and self-employed. This will entitle dependent contractors to more employment rights, including minimum earnings levels, sick pay and holiday entitlement.
Those on zero-hours contracts will be entitled to a 20% higher minimum wage in order to compensate for the “uncertainty of fluctuating hours”. They will also be allowed to request a fixed-hours contract after 12 months.
Pension rules will also be reviewed to ensure gig workers can more easily build funds for retirement.
In a major change to the employment tribunal system, the burden of proof in cases involving employment status will be shifted from the individual to the employer.
Under Lib Dem plans, statutory sick pay will be made available to all those earning less than £123 per week and the rate will be aligned with the minimum wage. Payments will be due on the first day of missed work, rather than the fourth.
Skills
The Lib Dems have pledged to address the skills and recruitment crisis by increasing investment in education and training and by offering more apprenticeships and career-advice services for young people.
Under a Lib Dem government, the apprenticeship levy will be replaced with a more flexible skills and training levy. Pay for apprentices will also be raised to the national minimum wage.
Lifelong skills grants – non-repayable loans to be spent on education and vocational training – will be offered to adults and training for higher vocations will be expanded.
Moreover, the salary threshold for foreign workers will be replaced with a “merit-based system” for work visas. The party hopes this will allow employers to more easily address skills shortages by recruiting from abroad.
Parents and carers
Parental leave and pay will be extended to the self-employed and will become day-one rights for all new parents, including adoptive parents and kinship carers.
Statutory maternity and shared parental pay will also be doubled to £350 per week, should the Lib Dems gain power. In addition, employers will be required to publish their parental leave and pay policies.
Carers will be protected under the Equality Act 2010, meaning that employers will have to make reasonable adjustments for those who provide care.
Diversity in the workplace
The Lib Dems have would require all large employers to publish data on gender, ethnicity, disability and LGBT+ employment levels, pay gaps and progression. Diversity targets will also have to be set every five years.
Blind hiring, where people’s real names are obscured during the hiring process, will be adopted in the public sector and its use will be encouraged in the private sector.
The Lib Dems will also provide additional advice and support for employers on neurodiversity in the workplace and develop a cross-government strategy to tackle discrimination faced by neurodiverse people.
The party has also set its sights on closing the disability employment gap by implementing a “targeted strategy of support” to help disabled people into work. It hopes that a proposed “adjustment passport” will help with this, as it will allow employers to see what adjustments and equipment was provided to disabled hires in their previous jobs.
