General Election 2024: what would a win for the Liberal Democrats mean for employment law?

On 10 June 2024, the Liberal Democrats released their manifesto for 2024, entitled For a Fair Deal. This included a number of key commitments relating to workplace rights that would be relevant to employers to make up all or part of the next government. Below, we set out their key commitments and what that change could mean for the law.

Commitments to change the law

·       Establish a new “dependent contractor” employment status in between employment and self-employment, with entitlements to basic rights such as minimum earnings, sick pay, and holiday entitlement. They would also shift the burden of proof in status cases from the individual to the employer.

·       Introduce a new band of National Minimum Wage (NMW) for care workers, at a rate of NMW plus £2 per hour, scrap the separate apprentice rate, and introduce a rate for those on zero-hours contracts set at 20% higher than NMW at times of normal demand to compensate for the uncertainty of fluctuating hours of work.

·       Remove the lower earnings limit requirement and the waiting days, so that Statutory Sick Pay (SSP) is paid from the first day of absence. The rate of SSP would also be aligned with the NMW rate.

·       Hold an independent review to recommend a genuine living wage.

·       Give everyone a right to flexible working and give disabled workers the right to work from home if they want to, unless there are significant business reasons that makes this not possible.

·       Make parental leave and pay a day-one right for all workers and self-employed parents.

·       Double the rate of Statutory Maternity Pay and Shared Parental Pay to £350 per week. Increase paternity pay to 90% of earnings, capped for high earners.

·       Introduce a month of “use it or lose it” leave for fathers and partners, paid at 90% of earnings, capped for high earners, eventually increasing to six weeks. Provide 46 weeks of parental leave to share, paid at double the current statutory rate, and introduce paid neonatal care leave.

·       Require large employers (250 employees and over) to publish parental leave and pay policies.

·       Introduce paid carer’s leave.

·       Introduce the right to request a fixed-hour contract after 12 months for “zero hours” and agency workers, which is not to be unreasonably refused.

·       Make care-related duties a protected characteristic requiring reasonable adjustments and make care experience a protected characteristic.

·       Introduce “Adjustment Passports” to record the adjustments, modifications, and equipment a disabled person has received, and ensure that Access to Work support and equipment stays with the person if they change jobs.

·       Require large employers to monitor and publish data on gender, ethnicity, disability and LGBT+ employment levels, pay gaps and progression, and publish five-year aspirational diversity targets.

·       Replace the salary threshold scheme with a merit-based system for work visas. Exempt NHS and care staff from the immigration skills charge.

·       Remove the apprenticeship levy and replace it with a skills and training levy.

·       Give staff in listed companies with more than 250 employees a right to request shares.

·       Require large employers to have a formal statement of corporate purposes, including considerations such as employee welfare.

·       Establish a Worker Protection Enforcement Authority responsible for enforcement of these matters.

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What would these changes mean?

A number of the commitments made by the Liberal Democrats will bring pay increases for workers and employees earning NMW, in receipt of SSP or on family-related leave receiving statutory pay. Some of these payments will double to £350 per week, a cost which would need to be absorbed by the organisation.

The requirements for reporting on diversity in the workplace would also increase for large employers under the Liberal Democrats’ plans. Going beyond the current requirement of gender pay gap reporting, much more detailed information will need to be gathered by employers within the scope of this change, as well as more detailed analysis of the data collected. The new requirement will also mean employers will have to set out detailed plans for their diversity targets, increasing the workload for these businesses and necessitating organisational focus on identifying and reaching those targets.