How could the General Election impact you as a business owner?

In the middle of a Wednesday downpour, Prime Minister Rishi Sunak announced a snap General Election, vowing to “fight for every vote” come polling day on Thursday 4th July.

The announcement was met with surprise both within and outside of Government, leaving many employers wondering: What does this mean for my business?

To help you navigate the change confidently, let’s explore the main promises made by each major political party, and how they will impact your business.

Changes proposed by the Labour party

After 14 years of Conservative Government, Keir Starmer’s Labour party has been a firm favourite in the polls since the beginning of 2022.

Labour has set out a long list of radical workplace reforms in their recent manifesto, here are 16 ways they plan to shake up workers’ rights and what these changes could mean for your business:

1. Employment rights from day one

No more qualifying periods for basic employment rights like unfair dismissal, sick pay and parent leave.

Currently, employees are only protected from unfair dismissal after two years with an employer. But Labour has promised to protect employees immediately from day one.

If this law is introduced, employers will need to pay much closer attention to their disciplinary and dismissal processes. This means unfair dismissal claims will get higher and employers must ensure they have watertight HR advice support.

2. All workers to get the same basic rights and protections

Moving forward, the distinction between ‘employee’ and ‘worker’ will be done away with, giving everyone the same fundamental employment rights, including sick pay, holiday pay, and protection against unfair dismissal.

This will mean a big overhaul of current policies and contracts. Failure to give all employees the same rights, should this law come into effect, would lead to a lot more tribunal claims.

3. National minimum wage to increase to £10 per hour as a minimum

For those earning less than £10 per hour, such as young adult workers, the National Minimum Wage will be raised to ensure a minimum earning of £10 per hour.

Any change to the National Minimum wage should be taken very seriously by employers. Failure to pay the correct amount can result in penalties and enforcement from HMRC.

For expert HR advice in a flash, ask Bright Brainbox: What are the risks of not paying the national minimum wage?

4. Strengthened employment rights and protections

Safeguards for pregnant employees, whistleblowers, those facing redundancy, and those subject to TUPE will be enhanced.

Employers will need to make sure their policies are up to date to enforce these greater protections.

5. Increases to sick pay (SSP)

Sick pay will be bumped up, and made available to everyone, extending eligibility to workers who were previously excluded.

This will greatly increase the need for payroll advisers, so businesses fully understand their responsibilities and don’t subject themselves to grievances for underpayment.

6. Steps to close pay gaps

Labour will be taking steps to close gender, ethnicity, and disability pay gaps, as well as making it mandatory for firms with 250 staff or more to publish their ethnicity pay gap report.

7. Taking a stronger stance against workplace harassment

Labour will require employers to intensify their efforts to prevent sexual harassment, ensuring a safer work environment for staff.

Workplace training, sexual harassment policies, a clear and communicated zero-tolerance attitude and support to report incidents of sexual harassment can help employers navigate this change without risk.

8. Expanding flexible working rights

Flexible working arrangements will be made more accessible. Obliging employers should consider such requests to the fullest extent possible, establishing flexible working as a right from day one.

Employers will need to think carefully about any changes to policies and practices they need to make when rules on flexible working arrangements change.

9. Improving family-friendly rights

Statutory maternity and paternity leave will be broadened, the shared parental leave system will be reassessed, bereavement leave rights will be introduced, and protections for pregnant workers will also be bolstered.

10. Increasing support for workers with family obligations

Labour is committed to providing additional support for workers dealing with family emergencies and commitments by offering paid family and carer’s leave, more flexible working options, and stronger enforcement of rights.

11. Increasing job security for staff on zero-hour contracts

Labour will grant workers on zero-hour contracts who consistently work regular hours for 12 weeks or more the right to a regular contract, and ensure reasonable notice for shift changes, offering compensation for cancelled shifts and lost work.

12. Reforming ‘fire and rehire’ practices

Information and consultation processes regarding ‘fire and rehire’ tactics will be improved. Labour also plans to adapt unfair dismissal and redundancy laws to prevent workers from being dismissed after not agreeing to imposed terms. For expert advice on this topic, ask Brainbox: What is fire and re-hire?

13. Boosting mental health support

Labour wants to enhance efforts to promote understanding of neurodiversity and evaluate strategies for managing stress, mental health, and the health implications of long Covid.

Offering staff access to an employee assistance programme can be an effective way to make sure you’re supporting employee mental health ahead of any stricter workplace rules.

14. Empowering workers to disconnect

The ‘right to disconnect’ will be introduced, giving workers protection against the expectations of having to respond to work communications outside of work.

Any new legal right means an increased chance of employers getting it wrong and facing claims against them. But an HR documentation provider, backed up by legal expertise, could be your lifeline. To learn more, check out our practical document support, BrightBase.

15. Strengthening trade union rights

Enhanced workplace access rights for trade unions will be introduced to streamline the union recognition process, and ensure employers inform their workers about the right to join a union.

16. Extending time for tribunal claims and removing compensation caps

Finally, Labour is proposing an increase to the duration allowed for submitting employment tribunal claims and eliminating all limits on compensation awards.

Existing agenda of the Conservatives

Given that the Conservative party’s manifesto is yet to be released, we anticipate that they’ll maintain their existing agenda, which includes:

• Neonatal care leave and pay
• Reform of industrial action laws
• Back to work plan (including a proposed reform of fit notes)
• Reform of the umbrella company market
• National disability strategy
• Definition of “sex” reassessment in the Equality Act 2010
• Reintroduction of employment tribunal fees
• Reform of non-compete clauses
• Reform to TUPE

Changes proposed by the Liberal Democrats

The Liberal Democrats are also yet to publish their manifesto.

In the past, they’ve expressed a commitment to ensuring immediate parental leave and pay rights for all workers from day one, including those who are self-employed.

Additionally, they aim to raise paternity pay to cover 90% of an employee’s salary, with a cap applied for higher earners.

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