Labour Party’s Manifesto: Implications for Employers

The country is waking up to its first change of Government since 2010, following this morning’s election results. The Labour Party’s recent manifesto outlined significant intended changes to employment and corporate law that could have far-reaching implications for both employers and employees.

With Sir Keir Starmer busy forming his Cabinet and working on his plan for his Party’s first 100 days in office, HK Law has analysed Labour’s employment law pledges and set out their potential implications for employers.

Key Commitments and their Implications

Workers’ Rights and Protections:
Labour has promised to substantially strengthen workers’ rights by bringing forward key employment protections to make them a “day one” right for all employees. This means that employees will no longer have to accrue two years of continuous service to benefit from enhanced rights including rights to sick pay, redundancy pay, parental leave, and holidays and even the right to bring a claim for unfair dismissal. If and when these promises are enacted, employers will need to adjust their HR policies to reflect these immediate entitlements and look to review their contracts of employment to amend their probation period provisions.

Minimum Wage Increase:
The manifesto commits to raising the minimum wage to at least £10 per hour for all workers aged 16 and over. Whilst higher wages can lead to higher productivity and employee wellbeing, employers, particularly those in industries reliant on low-wage labour, should take steps to reassess their wage structures and budgets and consider whether business expenses can be saved elsewhere.

Ban on Zero-Hours Contracts:
Zero-hours contracts, which offer no guaranteed hours of work, have been targeted for elimination by Labour. Employers relying on these contracts will need to transition to more stable employment arrangements, providing clearer and more predictable working hours. This is likely to necessitate more precise workforce planning to make up for the loss of flexibility that employers enjoyed with zero-hours contracts.

Enhanced Trade Union Rights:
Labour intends to bolster the power of trade unions by ensuring they have access to workplaces and by simplifying the process for unions to gain recognition. If this pledge comes to fruition, employers should expect to face more collective bargaining situations and increased union activity. This could result in increased negotiations over wages, working conditions and other employment terms.

Workers’ Representation on Boards:
To give workers a stronger voice in corporate decision-making, Labour proposes mandatory worker representation on company boards. For employers, this means adapting governance structures to accommodate worker representatives, which could influence company policies and strategic decisions.

Flexible Working and Work-Life Balance:
Promoting flexible working arrangements is another key element that Labour appears to focus on. Employers will need to give more consideration to flexible working hours and remote work options to accommodate employees’ needs for better work-life balance. This change, while potentially improving employee satisfaction and productivity, may require employers to invest in technology and develop new management practices to maintain efficiency and cohesion within a potentially more fragmented workforce. Challenges will include promoting and maintaining employee wellbeing, as well as productivity and motivation.

Equal Pay and Gender Pay Gap Reporting:
The labour manifesto emphasises closing the gender pay gap and enforcing equal pay for equal work. Employers must ensure transparency in pay structures and regularly report on gender pay disparities. Compliance may involve revising compensation strategies and conducting thorough audits to identify, and address, pay differences.

What Should Employers Do?
This article has highlighted some possible significant shifts in employment and corporate law. Every employer should stay informed, to ensure that their business is prepared should Labour implement their manifesto pledges.

HK Law is committed to helping you navigate any changes to employment law and ensure your business remains compliant.

For personalised advice and support, contact our Employment Law team at your nearest office – https://hklaw.uk/contact/.

This site uses cookies to offer you a better browsing experience. By browsing this website, you agree to our use of cookies.