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How the election results may affect employers

7th June 2024

The upcoming election creates uncertainty, and this is certainly true for employers across the country.  

But what might a change of Government actually mean for employers?  

The answer may well turn out to be quite a lot, as a number of proposals by both main political parties could result in changes to the administration, rights and remuneration of employees.  

See also our Election Tax watch article.

Workers’ rights 

Labour have announced their plan to “Make Work Pay” (a “New Deal for Working People”), which is based on improving workers’ rights and focuses on flexibility, equality, being family friendly, ensuring fair pay, and giving workers more of a voice and strengthening their rights.

We have taken a look at what some of the key changes might be for employers:

Key points for employers

  1. Increasing the national minimum wage to a genuine living wage which reflects the cost of living and does not depend on the age of the worker.   
  2. The banning of zero-hours contracts.  Employees would have a right to a contract that reflects their actual working hours, based over a 12-week reference period.   
  3. The banning of “fire and rehire” or “fire and replace” practices.  Employers will not be allowed to force lower pay or reduced terms and conditions onto employees, except in limited circumstances where there is no other alternative.   
  4. The banning of unpaid internships, unless part of education or training.   
  5. Basic employment rights to be provided from day one of employment.  This would remove the waiting time for employees to be entitled to rights such as unfair dismissal, statutory sick pay, parental leave. This is not planned to affect fair dismissal, redundancy or the operation of probation periods.  It would also become unlawful to dismiss someone within six months of their return from maternity leave.   
  6. It is intended over time that there will be one single status of ‘worker’.  This would mean that all workers will be entitled to the same employment rights.   A simpler framework has also been proposed to determine employment status.   
  7. Making flexible working the default arrangement for workers, unless where it is not reasonable to do so.   
  8. Employers would be required to inform all new employees of their right to join a trade union and provide this information to workers on a regular basis.   
  9. Large employers would be required to publish pay gaps for ethnicity and disability, as well as gender.  They will also need to develop, publish and implement action plans to close their gender pay gaps.  An action plan will also be required to support workers through the menopause.   

The above is not an exhaustive list, and there are a number of other proposals and initiatives in the “New Deal” which would also impact employers.   

Proposed Tax Policy 

In addition to the significant planned worker reforms, employers will be looking at potential tax changes.  There has been a promise that there would be no increase to income tax, national insurance, or VAT.  

However, there is no reference to the further national insurance rate cuts that were proposed by the Conservatives in February and who also have a long-term plan to abolish national insurance altogether.  It is not expected that Labour will continue this recent trend, meaning national insurance rates will likely be higher under Labour than a Conservative Government. 

Immigration and Global Mobility 

While immigration may not be the most pressing political issue for most employers, those with internationally mobile workers may be affected by proposed changes.    Both main parties are pledging to cut migration into the UK. 

Labour are pledging to cut reliance on overseas workers, focussing on a points-based system for those coming into the UK.   

The Conservatives are planning to cap the number of worker and family visas available to migrants each year.  

It therefore appears likely that regardless of the outcome on 4 July, it will become harder for employers to bring foreign employees into the UK, even in more skilled roles.    

Contact us  

We are here to support employers through any potential upcoming changes.  If you have any concerns or questions on the above, please contact our Employer Solutions team or your usual Bishop Fleming contact. 

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