How do the Labour and Conservative manifestos impact employers?

The snap election this month has given the parties an opportunity to set out their stall with regard to workers’ rights. Below is a summary of the two main parties’ pledges that are likely to have the biggest impact on UK-based employers.

Jeremy Corbyn’s ’For the Many, Not the Few’ Labour manifesto promises an outright ban on zero hours contracts, four new bank holidays and an increase in the minimum wage. The party also proposes to end the public sector pay cap, roll out maximum pay ratios through an ’excessive pay levy’ and impose a ban on unpaid internships. Labour also plans for those working irregular hours to be given the right to regular hours.  

If Labour wins the election and implements the above changes after the 8 June, the ramifications could be significant and potentially very costly for employers.  

While the use of zero hours contracts have come under much scrutiny in recent years the possible banning of them altogether could serve to not only hurt employers but also employees who enjoy the flexibility they afford them.  

There is also the Labour suggestion that all employees could be offered day one rights as opposed to the current legal position of employees requiring two years’ qualifying service for unfair dismissal rights.  

The Conservatives promise an increase in the National Living Wage to 60 per cent of median earnings by 2020 and then by the rate of median earnings. They also pledge to make executive pay subject to shareholder votes. They would also require listed companies to publish information in relation to executive pay compared to workforce pay in general. This continued focus on senior level pay does not seem to be abating.  

Both parties have made pledges in relation to maternity, paternity and family rights. Labour has pledged to double paternity leave to four weeks and increase paternity pay. They also say they will strengthen protection for women on maternity leave, however, they have not outlined how. They also say they will consider some sort of bereavement leave after the loss of close family members.  

The Conservatives have also made pledges in this area. They say they will support companies to take on parents and carers who want to return to work following long absences due to caring. The Conservatives specifically say they will offer workers the right to up to one year’s unpaid leave to care for relatives as well as paid bereavement leave of two weeks for those losing a child.  

While Theresa May has heralded these potential ‘new’ initiatives to be the ‘greatest expansion of workers’ rights by any Conservative government’ the impact is not expected to be that revolutionary given the time off in relation to long term absences is expected to be unpaid. We already know the take up of similar unpaid schemes is customarily low - think 'Shared Parental Leave' whose take up has been abysmal to date making its impact negligible.  

Interestingly, it is also hinted at that there could be a further expansion of the new Gender Pay Gap Reporting regulations introduced this year, which apply to all employers with 250 or more employees. Early indications point towards ethnicity needing to be reported on if the Conservatives make it back into power. This could result in greater administrative burdens on employers that do not currently store this information.  

Clearly the detail of all these pledges needs to be expanded upon and it will not be until a government is elected or re-elected that we will know what exact changes to expect.

Please contact Kerri Constable or Steve Sweetlove for more information.