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

With Labour, the Liberal Democrats, and the Conservatives all having now released their manifestos, you’re probably wondering: what will the election 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 could 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 2022. Their manifesto, published on Thursday 13th June, outlines a ‘Plan to Make Work Pay’, including a long list of workplace reforms.

Here are the main ways they plan to shake up workers’ rights and what these changes could mean for your business:

• Employment rights from day one

Labour plans to remove qualifying periods for basic employment rights like unfair dismissal, sick pay and parental leave.

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

If this law is introduced, employers will need to pay much closer attention to their disciplinary procedures and ensure they have the right HR support in place. Our team of HR specialists are on hand to provide 24/7 expert employment advice and help protect businesses from an increase in unfair dismissal claims.

• All workers to get the same basic rights and protections

Labour also plans to remove the distinction between ‘employee’ and ‘worker’, 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, will lead to an increase in tribunal claims. BrightBase, our library of 300+ expertly written templates, policies, and contracts, has everything employers need to keep their business compliant with the latest legislation.

• National minimum wage to increase to £10 per hour and Statutory Sick Pay (SSP) to be extended to all workers

Labour plans to remove age bandings on the National Minimum Wage, so that all workers earn at least £10 per hour. They’ve also proposed bumping up sick pay and making it available to all workers.

Employers must take these changes seriously, as failure to pay staff the correct amount could result in costly penalties and enforcement from HMRC.

By investing in an integrated payroll software, businesses can automatically adjust for changes in wage regulations and ensure accurate, compliant payroll runs. Pre-register now for BrightHR Payroll, our end-to-end managed payroll service, so you can be the first to know when it launches.

• Strengthened employment rights and protections

If Labour win, 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.

• Steps to close pay gaps

Labour also plans to take steps to close gender, ethnicity, and disability pay gaps, including making it mandatory for firms with 250+ staff to publish their ethnicity pay gap report. For up-to-date advice on what this could mean for your business, reach out to our 24/7 employment law advice hotline.

• 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.

• Expanding flexible working rights

Labour will give employees the right to flexible working from day one, except where not reasonably feasible.

It’s not yet clear how this will be defined, or how it will differ in practice from current legislation, but either way, employers will need to think carefully about how their policies and practices might change.

To prepare for a more flexible workforce, employers should consider investing in scheduling tools or a digital time-tracking app like Blip, so they can manage flexible working requests effectively and maintain productivity.

• Improving family-friendly rights

Labour plans to broaden statutory maternity and paternity leave, reassess the shared parental leave system, introduce a right to bereavement leave, and bolster protections for pregnant workers.

Labour is also 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.

• 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. They also want to ensure workers get reasonable notice for any shift changes and compensation for cancelled shifts and lost work.

Our shift & rota planning software can help employers deal with these changes and ensure their rotas are planned in advance, avoiding any last-minute mishaps and legal penalties.

• Reforming ‘fire and rehire’ practices

Labour wants to strengthen enforcement against ‘fire and rehire’ tactics, including by improving consultation processes and amending unfair dismissal and redundancy laws, so that workers can’t be dismissed for not agreeing to imposed terms.

For expert advice on this topic, ask Brainbox: What is fire and re-hire?

• Boosting mental health support

Labour wants to enhance support for neurodiverse employees and evaluate strategies for managing stress, mental health, and long Covid in the workplace.

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

• Empowering workers with the ‘right to disconnect'

Labour plans to introduce a ‘right to disconnect’ and protect workers from surveillance out-of-hours. Should this change occur, employers will need to ensure they are not putting undue stress on staff to communicate outside of regular working hours.

To protect themselves against a rise in legal claims, businesses must make sure they have legally sound policies in place. An HR documentation provider, backed by legal expertise, could be your lifeline. To learn more, check out our practical document support, BrightBase.

• Strengthening trade union rights

Labour plans to strengthen trade union rights, including by introducing a new duty on employers to inform staff of their right to join a union in a written contract.

• Extending time for tribunal claims and removing compensation caps

Finally, Labour plans to increase the duration allowed for submitting employment tribunal claims and eliminate all limits on compensation awards.

Changes proposed by the Conservatives

The Conservatives released their manifesto on June 11th, with relatively few proposals on workplace reform.

Some notable inclusions are:

• A pledge to increase the National Living Wage to around £13 per hour by the end of the next Parliament
• Plans to overhaul the fit note process so that people are not signed off sick by default
• A commitment to cutting National Insurance for working people, including plans to abolish the main rate of national insurance paid by self-employed workers by the end of the Parliament
• Plans to create 100,000 more apprenticeships in England every year by the end of the next Parliament
• Plans to amend the definition of ‘sex’ in the Equality Act 2010 so that it is ‘biological sex’ that is the protected characteristic

It’s expected that the Conservatives will also move forward with other proposals they made before the Election was announced, including reforms to TUPE and non-compete clauses, though these were absent from the manifesto so have not yet been confirmed.

Changes proposed by the Liberal Democrats

The Liberal Democrat manifesto outlines several key pledges on employment law, including:

• Expanding family-friendly rights

The Lib Dems plan to give families more choice and flexibility by making parental leave a day-one right, extending the right to parental leave to self-employed parents, and increasing the length of paternity leave.

They also plan to introduce paid neonatal care leave and paid carer’s leave.

• Tackling late payments

The Lib Dems will require all government agencies, contractors, and companies with more than 250 employees to sign up to the prompt payment code, making it enforceable.

• Modernising employment rights for those under “the gig economy”

The Lib Dems will establish a new ‘dependent contractor’ employment status in between employment and self-employment, with entitlements to basic rights such as minimum earnings levels, sick pay, and holiday entitlement.

In a bid to end the uncertainty of fluctuating hours of work, they also plan to set a 20% higher minimum wage for people on zero-hour contracts and give zero-hours and agency workers the right to request a fixed-hours contract after 12 months.

• Revamping statutory sick pay (SSP)

The Lib Dems plan to make major changes to SSP, removing the current lower earnings limit of £123 per week and making it available to all workers from the first day of missed work.

They also hope to align the rate of SSP with the National Minimum Wage and support small employers with these new costs.

Changes proposed by Reform UK

Reform UK released their manifesto on 17 June, which includes the following points:

• Lift the income tax starting threshold to £20,000.
• Raise the National Insurance rate to 20% for foreign workers, but exempt essential foreign health and care workers, as well as businesses who employ five staff members and under.
• Abolish IR35 rules.
• Offer tax relief for organisations that undertake apprenticeships.
• Replace the Equality Act 2010 and scrap diversity, equality, and inclusion rules.
• Make St George’s Day and St David’s Day a public holiday.
• Scrap thousands of laws this party believes are holding British business back, including employment laws. They are also pledging to make it easier to hire and refire.

Changes proposed by the Green Party

The Green Party has made commitments to improve social housing, healthcare and reduce the impact of climate change. They've also proposed the following employment law changes in their manifesto to 'make work fair'.

• Repeal of anti-union legislation: Replacing this with a positive Charter of Workers’ Rights, with the right to strike at the heart and a legal obligation for all employers to recognise trade unions
• Introduce a 10:1 pay ratio: Which will apply to all private and public sector organisations
• Increase the minimum wage to £15 an hour: For everyone non-dependent on age, with the costs to small businesses being offset by reducing their National Insurance payments
• Introduce day-one rights: Like equal employment rights for all workers including those who work in the gig economy and are on zero-hour contracts
• Change working patterns: For example, moving to a four-day working week

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