Employment Edit: 13 June 2024

Manifesto News

The Conservative Party and the Liberal Democrats published their manifestos this week ahead of the general election. Below we pick out some of their employment-related pledges.

Conservative Party manifesto:

• Cut employee National Insurance to 6% by April 2027 and, by the end of the next Parliament, abolish National Insurance for self-employed people;
• Continue to implement minimum service levels legislation to limit the impact of industrial action on public services;
• Maintain the National Living Wage (NLW) in each year of the next Parliament at two-thirds of median earnings, which on current forecasts would mean the rate of NLW would rise to around £13 per hour; and
• An overhaul of the fit note process, including moving the responsibility for issuing fit notes from GPs towards specialist work and health professionals.

Liberal Democrats manifesto:

• Establish a new ‘dependent contractor’ employment status in between employment and self-employment, and review the tax and National Insurance status of employees, dependent contractors and freelancers;
• Set a 20% higher rate of minimum wage for people on zero-hours contracts at times of normal demand, in order to compensate the individuals for the uncertainty of fluctuating working hours;
• Introduce a right for zero-hours and agency workers to request a fixed-hours contract after 12 months, with such a request not to be unreasonably refused;
• Align the rate of Statutory Sick Pay (SSP) with the National Minimum Wage, and make SSP available from the first day of absence, rather than the fourth;
• Double the rate of statutory maternity and shared parental pay to £350 per week;
• Extend parental pay and leave entitlements to the self-employed and make those rights ‘day one’ rights; and
• Make caring a protected characteristic under the Equality Act 2010 and require employers to make reasonable adjustments to enable employees with caring responsibility to provide that care.

In this blog post, Kate Redshaw and James Leeman consider the Liberal Democrats and Conservative Party employment law proposals, and what they could mean for employers, in more detail.

We will continue to keep you informed on key pre-election employment news and analysis, including on any new points raised in today’s Labour Party manifesto (which, at the time of writing, has only just been published). In the meantime, why not check out our recent article which explores Labour’s ‘Plan to Make Work Pay’. The article can be found here, and is also linked in our thought-leadership section below.

Criminal disclosures and NDAs

Shortly before the dissolution of Parliament ahead of the general election, new legislation was passed which will make non-disclosure agreements (including confidentiality clauses) unenforceable where they prevent victims from reporting crime or making several other types of disclosure related to a crime.

Clauses will be void where they prevent a victim, or a person who reasonably believes that they are a victim, from disclosing information to certain categories of people. This will include disclosures to:

• a person who has law enforcement functions to enable them to carry out those functions (for example, a disclosure to the police to enable them to investigate the criminal conduct);
• a qualified lawyer providing legal advice in relation to the criminal conduct; and
• victim support services or the victim’s child, parent or partner, for the purposes of obtaining support in relation to the criminal conduct.

Employers will need to ensure that any confidentiality provisions, for example those in contracts of employment and settlement agreements, do not fall foul of these new rules – many contracts will already contain carve-outs that permit employees to make some of the types of disclosure detailed in the new legislation but, before it comes into force, it will be important for employers to carry out reviews to check that all of the permitted disclosures are allowed under their confidentiality clauses. No commencement date for the new rules has yet been announced so employers will need to keep a close eye on developments in this area.

EU Settlement Scheme

On 21 May, the Home Office announced further amendments it intends to make to the EU Settlement Scheme. In what would be a key change, pre-settled status holders would automatically have their status extended by 5 years where they have not obtained full ‘settled’ status prior to expiry of their pre-settled status. This follows changes introduced last year, which resulted in pre-settled status holders having their status automatically extended by 2 years.

The Home Office also stated that the pre-settled status expiry date would be removed from digital profiles generated by the online right to work check system, and that employers would no longer be required to carry out follow-up right to work checks where a relevant individual remains in their employment. It is not yet clear when each of the above changes will come into effect and how they might be impacted by the general election.

Third party benefits

In a recent judgment, the EAT held that an employer could not rely on its contractual terms with a third party in order to withdraw certain benefits from its former employees.
 
After they were made redundant, a group of claimants argued that their employer’s failure to provide life-long travel discounts (operated by a third party association) was a breach of their employment contracts. As part of its defence, the employer contended that the claimants’ entitlement to such benefits had been withdrawn. It relied on a right of withdrawal in the agreement between the employer and the association, as well as a notification issued by the association to the employer withdrawing the post-redundancy benefits from those employed after a certain date.
 
At first instance, the tribunal found that the right of withdrawal had been incorporated into the claimants’ contracts and that their contracts had been varied by the association’s notification. The EAT overturned this on appeal. It held that the right of withdrawal in the agreement with the association had not been incorporated into the employees’ contracts – it was not enough that the claimants were aware that the benefits were operated by the association. The employer could therefore not rely on that right of withdrawal to remove the travel benefits. The case is a useful reminder of the importance of ensuring that appropriate wording on third party benefits (such as provisions noting where a benefit is contingent on a third party continuing to provide it) is included in express terms in employment contracts

(Adekoya v Heathrow Express Operating Co Ltd)