What does the general election mean for employment law?

Published: 28 May 2024 | by Personnel Today

After Prime Minister Rishi Sunak announced a general election on 4 July 2024, Personnel Today looks at what might happen to the raft of employment law changes on the horizon.

After months of uncertainty for organisations, the Prime Minister has finally called a general election. In a rain-soaked speech outside Number 10, Sunak said it was time for Britain to “choose its future”, hailing the recent economic growth and reductions in inflation as proof that the priorities his government had set out “are working”.

“The question now is how, and who do you trust, to turn that foundation into a secure future for you, your family and our country? Now is the moment for Britain to choose its future. To decide whether we want to build on the progress we have made or risk going back to square one with no plan and no certainty,” he said.

General election 2024 employment law

In response, Labour leader Sir Kier Starmer said: “No matter what else is said and done, that opportunity for change is what this election is about.

“Over the course of the last four years, we’ve changed the Labour Party, returned it once more to the service of working people.

“All we ask now, humbly, is to do exactly the same for our country, and return Britain to the service of working people.”

Despite Sunak’s comments about certainty, the calling of the general election now raises questions about employment law that is yet to make its way onto the statute books.

If the Conservatives lose power on 4 July, could long-anticipated reforms fall by the wayside?

Employment law changes hang in the balance

The employment law changes organisations had expected to see later in 2024 and beyond include:

• Plans to tighten up rules around “fire and rehire” practices. So far only a draft code of practice has been published.
• The reintroduction of employment tribunal fees. A consultation closed in March and has not yet been responded to.
• Plans to limit the duration of non-compete clauses in employment contracts. A consultation closed last year and in its response, the government said limiting them to three months would be an appropriate timeframe. No further updates have been announced.
• Further reform of industrial action laws, including the introduction of minimum service levels during strikes in hospitals and schools. A consultation into minimum service levels in schools concluded in January and has not yet received a government response.

Several consultations have also recently been launched around proposed changes, including:

• Plans to overhaul the fit note system in England and move responsibility for assessing fitness to work away from GPs to “specialist work and health professionals”. A call for evidence closes on 8 July, shortly after the general election.
• TUPE law reforms, including clarifying who it applies to and ensuring that employees can only be transferred to one new employer in situations where there are multiple parties. A consultation runs until 11 July.
• Proposals to require dental graduates to work in the NHS for several years after graduating or repay their training fees. A consultation has been launched and closes on 18 July.

These consultations remain open for now, but once the pre-election period begins the government will not be able to respond to them or make decisions relating to their potential implementation.

Rob McKellar, director of legal and general counsel at Peninsula, said: “It’s likely that the deadlines for existing consultation periods would be extended beyond the election to allow all parties sufficient time to respond. Whether they go ahead after the consultation period closes, will be up to the newly elected government to decide.”

Several bills are working their way through Parliament, including the Paternity Leave (Bereavement) Bill, Bullying and Respect at Work Bill, Fertility Treatment (Employment Rights) Bill and the Unpaid Trial Work Periods (Prohibition) Bill.

If the current Conservative administration is unsuccessful at the general election, which as polls stand looks likely, the next government may still take forward some of these proposals. For example, Labour has pledged to strengthen the existing rights and protections offered to pregnant workers, whistleblowers, those subject to a TUPE process, and those being made redundant.

Stephen Simpson, acting content manager, employment law and compliance at Brightmine, said: “There are likely to be some swiftly arranged negotiations between the government and Labour over which draft laws could be quickly put through before Parliament is dissolved.

“I think the only employment law proposal that falls into that category is the fire and rehire code. All that needs is the code to be finalised and a brief commencement order. I could see that potentially being pushed through, as the government had already mooted an 18 July commencement date.”

McKellar said: “Any laws not passed by the time that Parliament is dissolved on 30 May would need to be reintroduced in the next King’s speech if they are to go ahead. It should be noted, however, that this would only apply to the laws that have not yet received Royal Assent, rather than those which have already received Royal Assent but not yet come into force.”

Labour has recently reached an agreement with trade unions on its employment plans, following criticism that it was watering down reforms promised under its New Deal for Working People last year. Labour’s proposed changes include banning zero-hours contracts, ending qualifying periods for basic rights including parental leave and statutory sick pay, and introducing a single ‘worker’ status.

Final versions of each party’s election manifestos, which could include employment pledges, are expected to be published in the coming weeks.

Employment laws yet to be enacted

There are also several employment laws that have received Royal Assent but have not been implemented. These are:

• A requirement for employers to give all tips and gratuities to workers, without any deduction. The law received Royal Assent earlier this month but has not been enacted, with its implementation recently delayed until October.
• A new right for workers to request a more predictable working pattern was expected in September 2024. This was brought in under the Workers (Predictable Terms and Conditions) Act 2023, which received Royal Assent last year.
• A proactive duty to prevent sexual harassment at work, under Worker Protection (Amendment of Equality Act 2010) Act 2023. This received Royal Assent last year, with an expected implementation date in October 2024.
• The Neonatal Care (Leave and Pay) Act 2023, which gives parents the right to take up to 12 weeks of paid leave if their baby requires specialist care after birth, which is due to come into force in April 2025.
• Plans to lower the pensions auto-enrolment age from 22 to 18 under the Pensions (Extension of Automatic Enrolment) Act 2023, which received Royal Assent last year. A Department for Work and Pensions consultation on implementing the new measures was expected.

Brightmine’s Simpson said quickly implementing laws such as the Worker Protection Act 2023 and Employment (Allocation of Tips) Act 2023 is not straightforward because they normally require supporting regulations as well as a commencement order.

“I would be very surprised if they are rushed through in time – although there would be nothing to stop a new government picking them up if it aligns with their priorities,” he said.

Peninsula’s McKellar said that laws that have already received Royal Assent will remain on the statute books unless a new government passes laws to repeal them.

Response to the general election announcement

Neil Carberry, chief executive of the Recruitment and Employment Confederation, said that the political parties should show they understand the needs of the labour market over the coming weeks.

“Economic growth and competitiveness need to be at the heart of this election campaign. A vibrant economy is the only way to higher wages, better public services and lower taxes,” he said.

“Any plan for competitiveness is fundamentally about the talent and application of our British workforce. In the next few weeks, politicians must show that they really get today’s labour market. From helping people build skills to investment in transport and childcare, there is a lot to do. But it starts with understanding that workers and businesses need a more flexible approach than in the past, and that our regulation, skills and tax systems need to keep up.

“The UK has a tight labour supply – we need to make the most of it. The cost to the UK economy in lost wages and profits could be up to £39 billion every year – the equivalent of two whole Elizabeth Lines – if we do get it wrong.”

Rain Newton-Smith, CBI CEO, said: “This general election needs to be about how our political leaders will get the UK economy firing on all cylinders and deliver sustainable growth for the benefit of our society.

“Our members want to see politicians having grown-up conversations about how we foster the investment we need to have a labour market which delivers higher living standards, to accelerate our transition to net zero and make the UK an attractive place to run and grow business. It’s critical that these issues that will affect the UK’s long-term growth prospects are reflected meaningfully in the debate over the next six weeks.”