This week the Conservatives and Liberal Democrats have each published their manifestos ahead of the general election. The Labour Party, in its recently released ‘Plan to Make Work Pay’ (which we discuss here), has shown that, for them, employment rights will be an important pillar of their election campaign. To what extent are the Conservatives and Liberal Democrats following suit? Below we consider the employment law proposals in their recently released manifestos. 

Starting with the Conservative party, a read through of its manifesto reveals that, by and large, in contrast to both the Labour Party and the Lib Dems, it is content to leave employment rights as they are. As a result, the manifesto is light touch in terms of proposed reforms. 

Possibly of most relevance is that the party has confirmed its opposition to 'Labour’s package of French style union rules'. Whilst no specific rules are referenced, one assumes this is intended to refer to Labour’s far-reaching plans to reform trade union law, as contained in its Plan to Make Work Pay. These include introducing electronic balloting, simplifying the trade union recognition process, and granting trade unions rights to access the workplace for recruitment and organisation. The Conservatives have also confirmed that they would continue to implement their Minimum Service Levels legislation, which allows for the setting of minimum service level requirements during strike action for specified public services in key sectors such as health services, education, and transport. In stark contrast, Labour has committed to repealing this legislation if it comes to power. 

Elsewhere the Conservatives have pledged to overhaul the fit note system so that ‘people are not being signed off sick as a default’.  They say they would do this by moving responsibility for issuing fit notes away from GPs towards specialist work and health professionals. This follows growing concern about the record number of people who are out of work due to ill health and the government’s call for evidence as part of its review of the fit note process. 

Finally, the Conservative manifesto also includes commitments to maintain the national living wage at two-thirds of median earnings and to introduce primary legislation to clarify that the protected characteristic of sex in the Equality Act means biological sex. The party claims that the latter policy would guarantee that single sex services and spaces could be provided in settings such as sport and healthcare, but this could have wider ramifications for discrimination law. 

The Liberal Democrats have gone further than the Conservatives in their manifesto in terms of proposed reforms. Whilst current polling suggests that they are unlikely to win the election, it remains a worthwhile exercise to consider their proposals as their policies may still influence policy-making – particularly if they make a number of gains or in the event of a hung Parliament. 

Interestingly, as Labour is also pursuing this line, the Liberal Democrat manifesto proposes change to the complex issue of employment status. Recent years have seen businesses shift towards more flexible employment models which has led to an increase in complex litigation on employment status and in particular the distinction between ‘worker’ and ‘self-employed’. 

In their manifesto the Liberal Democrats have pledged to establish a new ‘dependent contractor’ status which would sit in between employment and self-employment. Dependent contractors would have rights to minimum earning levels, sick pay and holiday entitlement. Assuming the definition of ‘dependent contractor’ status would be similar to the definition of ‘worker’ as it is currently understood, this would not represent a radical change, as workers are already entitled to the minimum wage and holiday, although they are generally not entitled to sick pay. Given this, the focus may, instead, be on clarifying who would fall within the definition of ‘dependent contractor’ which, if drafted carefully, could be helpful, albeit that drafting exercise would not be an easy one. 

Labour has suggested that it wants to go further and move towards a two-status framework. Under its proposals, the statuses of ‘employee’ and ‘worker’ would be combined into one single status of ‘worker’. Reforming the law in this area has the potential for very significant unintended consequences. Acknowledging these complexities, Labour has committed to consulting in detail prior to introducing any changes in this area if it comes to power. 

Any reforms to employment status would almost certainly have significant tax implications, as many workers are self-employed for tax purposes whereas employees are taxed through PAYE and, of course, employers pay NICs for their employees. The Liberal Democrats have pledged to review the tax and national insurance status of employees, dependent contractors and the self-employed to ensure fair and comparable treatment. Labour’s Plan to Make Work Pay does not address the tax or NI implications of moving towards a single employment status. 

Another area of focus for the Liberal Democrats is zero-hour contracts. This has been an on-going political issue - the argument being that a contract which offers no minimum guaranteed number of hours per week gives rise to insecure employment – and it is often the most vulnerable workers who are employed on this type of contract. Equally, however, the flexibility that these types of contracts can offer benefit individuals as well as the employer. The political parties take different views on where the balance between flexibility and certainty should lie. 

Taking a new approach, the Liberal Democrats have proposed that a zero-hour contract worker should receive a 20% higher minimum wage ‘at times of normal demand’ to compensate them for the uncertainty of fluctuating hours. There is much to flesh out here, such as what is meant by ‘times of normal demand’, but this is an interesting proposal, which could be worth exploring – possibly alongside other safeguards to prevent abuse. 

The Liberal Democrats have also suggested that an individual should have the right to request a fixed-hours contract after 12 months of working on a zero-hours contract or as agency worker, which could not be unreasonably refused by the employer. This proposal is along the same lines as the right to request a predictable working pattern which the current government was in the process of introducing prior to calling the general election. Labour has suggested it may go further by offering workers on zero-hour contracts the right to a fixed-hour contract (as opposed to a right to request), based on a twelve-week reference period. 

The Liberal Democrats have also proposed changes:  

• to statutory sick pay which would include removing the lower earnings limit and the three day waiting period for statutory sick pay, 
• to pay apprentices the national minimum wage; and 
• establish an independent review to recommend a genuine living wage across all sectors. 

Whilst there are differences, these proposals chime with proposals made by the Labour party in their Plan to Make Work Pay. 

One of the Liberal Democrats’ most far-reaching areas of proposed employment reform is the parental leave system with their policies including: 

• doubling statutory maternity and shared parental pay to £350 per week; 
• adding an extra ‘use-it-or-lose-it’ month of paternity leave in addition to the current two week statutory entitlement, and ensuring paternity leave is paid at 90% of earnings, with a cap for high earners; 
• making all parental pay and leave day one rights and extending these rights to self-employed parents; 
• introducing paid neonatal care leave; and 
• requiring large employers to publish their parental leave and pay policies. 

They have also suggested that they will carry out a more extensive reform of the system when ‘the public finances allow’. Their long-term vision is a more flexible system of parental leave, under which each parent will be entitled to an initial six weeks of ‘use-it-or-lose-it’ leave, paid at 90% of earnings, followed by a shared entitlement of 46 weeks parental leave, paid at double the current statutory rate, which parents can then decide between themselves how to share. 

These proposals are more detailed than Labour’s, which has, so far, only committed to a ‘review’ of the parental leave system within the first twelve months if it wins the election. 

Elsewhere, a major focus of the Liberal Democrat’s election campaign has been care. From an employment law perspective, the party has proposed making ‘caring’ a protected characteristic under the Equality Act and requiring employers to make reasonable adjustments for employees with caring responsibilities. The introduction of any new protected characteristic would always have wide-ranging implications for employers so would be a major development. 

Finally, the enforcement of employment law protections currently lies with a number of different authorities – for example the Health and Safety Executive has responsibility for taking action on working time breaches and HMRC is responsible for taking action for breaches of the national minimum wage. All three of the major UK political parties have shown support for the establishment of a single enforcement body in one form or another which would be responsible for the enforcement of employment rights. This suggests that this policy has a good chance of being introduced at some point. In its manifesto, the Liberal Democrats have proposed the establishment of a new ‘Worker Protection Enforcement Authority’ which would have responsibility for enforcing the minimum wage, tackling modern slavery and protecting agency workers. 

So, we have the Conservative manifesto suggesting minimal changes to employment law and a Liberal Democrat manifesto which contains proposals which resemble some (but by no means all) of the Labour party’s proposals in this space. The Labour party will release its manifesto later this week and all eyes will be on whether there are any significant additions or changes to their Plan to Make Work Pay. 

All in all, there is a lot for employers to mull over. 

This blog was co-authored with Kate Redshaw, Head of Practice Development (employment)