Major business changes predicted under a Labour government

  • Business Advice
Major business changes predicted under a Labour government
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Peninsula Team, Peninsula Team

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A general election is almost guaranteed to be held this year, and employers can expect to see more from political parties about their plans for businesses and employee rights should they come to power

Kicking it off, the Labour Party has released a campaign document, Let’s Get Britain’s Future Back.

Under the parliamentary rules, the latest a Parliament can be dissolved for a general election is on the fifth anniversary of the day it first met. This means that for the current Parliament, it must be dissolved on or before 17 December 2024. From then, 25 working days are allowed to prepare for the election which means the latest date on which the next election must be held is 28 January 2025. Realistically, it is extremely unlikely it will take that long. Currently, it is speculated that the election will be held this autumn. It is however for the Conservative Prime Minister, Rishi Sunak, to decide when.

With 2024 likely to be an election year, we can expect to see more from the main political parties on what they would do if they got into government. Below, we look at what we know so far.

Let’s Get Britain’s Future Back — Labour Party promises

In late 2023, Shadow Deputy Prime Minister, Angela Rayner, made it clear that the Labour Party intends to bring forward an Employment Bill within its first 100 days in office, should it form the next government. This Bill could include some of the following promises made by the Labour Party.

The Labour Party has committed itself to “making work pay”. This means introducing a new deal for working people, including a “genuine” living wage that accounts for the real cost of living. As part of Angela Rayner and Shadow Chancellor, Rachel Reeves’ speeches at the 2023 autumn Labour Party conference, it was announced that this would be achieved by changing the Low Pay Commission’s remit when setting its recommendations for the National Minimum Wage, requiring it to take into account the real cost of living.

The party has also made it clear that it intends to ban zero-hours contracts and end employers’ ability to force changes to employee terms and conditions via the fire and re-hire (or dismissal and re-engagement) process. This would involve fundamental legal change and potentially an alternation of the “fair reasons” for dismissal under s.98 of the Employment Rights Act 1996 and could well be challenged in Parliament.

Another plan that Labour has announced is reform to the Apprenticeship Levy. Under a Labour government, this would become a “Growth and Skills Levy”, which the party claims would give employers more power over the training their money can buy. This greater flexibility, Labour says, will allow employers to train their workforce in new and relevant skills.

Angela Rayner has also set out Labour’s intention to reform trade union laws, and repeal provisions put in place by the current Government on trade unions. It would also update balloting laws in order to “bring them into the 21st century”. These changes would include removal of the minimum service rules.

Speaking at the Labour Party autumn conference, Anneliese Dodds, Shadow Women and Equalities Minister, set out plans for introducing mandatory disability pay gap reporting (currently, only gender pay gap reporting is mandatory for businesses over a certain size). This, alongside better support for women in the workplace, reforms to access to work and simplification of the process to secure reasonable adjustments at work, would form part of a wider package of reforms under which equality laws would be significantly changed under a Labour government.

In line with a Law Commission recommendation, there are also plans to extend the time limit to bring a tribunal claim from three to six months. This, Anneliese Dodds argues, would relieve the pressure felt by pregnant workers who feel they have been discriminated against to bring a claim whilst still pregnant, which, the shadow minister pointed out, can be particularly stressful and could impact negatively on their pregnancy.

The Labour Party have also proposed making ethnicity pay gap reporting mandatory, in line with the current rules on gender pay gap reporting. Under its proposed “Race Equality Act”, pay equality rights would be extended to ethnic minorities and disabled people. This would strengthen existing protections already within the Equality Act 2010, which prohibit direct discrimination in pay decisions.

Liberal Democrats

The Liberal Democrats Party also has plans to help working parents. At its autumn party conference, Munira Wilson, Party Spokesperson, announced proposals for changes to shared parental pay (ShPP) and leave that would enable more men to afford to be able to take this type of leave. Under its plans, the rate of ShPP would double to £350 a week, relieving the financial burden felt by families. The period of leave would also be increased to 46 weeks, and could even be expanded to self-employed workers under these plans.

Conservative Party

Under the current Government, a number of reforms to employment law have been made over recent years. Many of these will take effect in 2024, providing UK employees with more rights and entitlements, such as to take carer’s leave and to receive 100% of tips, service charges and gratuities (distributed fairly amongst the workforce).

Looking to the future

It is likely that over the coming months much more will be said by the UK parliamentary parties on their plans should they form the next government. Depending on which party that is, we may or may not see the reform or repeal of recently introduced laws. If that were to be the case, parliamentary process would need to be followed and the matter subjected to debate, which can take time. How easy it will be for the next government to put its plans in place will depend on a number of factors; this could mean that pre-election promises cannot be fulfilled.

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