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Employment Law & Worker Rights - The Liberal Democrats Manifesto

First out of the starting blocks with their election manifesto were the Liberal Democrats. Whilst Ed Davey has been horsing around for the cameras in the last few weeks and may well have looked like a man auditioning for a rebooted "It's a Knockout!", his campaign team have been hard at work on their newly published 116-page manifesto; a manifesto to “save the NHS”. However, they have also outlined a number of pledges which would have an impact on businesses and on employment law which could form the basis of interesting discussions in Parliament should the Liberal Democrats fare better in the election than they did in 2019 (when they won just 11 seats). Here's a summary of their key proposals, although with very little actual detail some of their pledges will just remain headlines for now (and probably, we suspect, always):

Liberal Democrats Key Employment Policies

Employee Ownership

For larger companies, the Liberal Democrats want to encourage employee ownership. They propose giving employees in listed companies with more than 250 employees the right to request shares to be held in trust for the benefit of employees, which on the face of it could foster a more inclusive and invested workforce or just be another “right to request” with little franchise.

Investment in Skills

A major focus would appear to be investing in the workforce's skills through various measures, including replacing the unloved apprenticeship levy with a more flexible system, boosting the take-up of apprenticeships, including by guaranteeing pay at the rate of at least the national minimum wage by scrapping the lower apprentice rate.

Worker Protection Enforcement Authority

A new authority is proposed to consolidate various enforcement responsibilities, ensuring compliance with minimum wage laws, tackling modern slavery and protecting agency workers. It’s arguable that this is of questionable value when we already have such bodies, which could do with more funding and resources to enable them to exercise their enforcement powers more effectively.

Living Wage and Employment Rights

The party plans to establish an independent review to recommend a genuine living wage and modernise employment rights to suit the 'gig economy'. This includes creating a “new” employment status for 'dependent contractors' giving them basic rights to minimum earnings, sick pay and holiday entitlement. This looks like no more than a re-badging exercise of "worker" status and arguably adds little. The review would also look at tax and National Insurance for each type of worker and reviewing pension rules for gig workers. Zero-hours contracts are also on the list for an overhaul with the party proposing to increase the minimum wage for zero-hours workers by 20% at times of normal demand to compensate them for the uncertainty of fluctuating hours of work and giving them a right to request a fixed-hours contract after 12 months – a request which could not be “unreasonably refused”. They would also seek to change the burden of proof in employment tribunal claims requiring an employer to disprove status.

Parental Leave and Sick Pay

Reforming the Parental Leave and Pay and Statutory Sick Pay systems is also on the agenda, with proposals to make these benefits more accessible and aligned with the National Minimum Wage by making both “day one” rights. They want to give parents genuine flexibility and choice in the crucial early months by:

  • Making all parental pay and leave day-one rights, including for adoptive parents and kinship carers, and extending them to self-employed parents;
  • Doubling Statutory Maternity and Shared Parental Pay to £350 a week;
  • Increasing pay for paternity leave to 90% of earnings, with a cap for high earners;
  • Introducing an extra use-it-or-lose-it month for fathers and partners, paid at 90% of earnings, with a cap for high earners; and
  • Requiring large employers to publish their parental leave and pay policies.

In the longer term, when the public finances allow, the party’s ambition is to give all families (including self-employed parents, adoptive parents and kinship carers):

  • Six weeks of use-it-or-lose-it leave for each parent, paid at 90% of earnings.
  • 46 weeks of parental leave to share between themselves as they choose, paid at double the current statutory rate; and
  • Introduce paid neonatal care leave.

Flexible Working and Diversity

The Liberal Democrats aspire to give everyone the right to flexible working and improve workplace diversity. This includes publishing diversity data, using name-blind recruitment processes, and supporting neurodiverse individuals. Within this section of the liberal democrats manifesto is the promise to grant everyone the right to flexible working. This pledge extends beyond the current statutory request framework, aiming to make flexible working a default position rather than an exception. The manifesto goes further for those with disabilities, advocating for the right to work from home, subject to "significant business reasons" that might render this impractical. By raising awareness and simplifying the Access to Work scheme, the manifesto recognises the need for practical support for disabled workers. The innovative concept of 'Adjustment Passports' would allow for a seamless transition of support when a disabled person changes jobs.  

The Liberal Democrats' employment law outline pledges are extensive and envisage significant changes for both employers and employees. Of course, the chances of any of these proposals actually becoming law are as likely as Ed Davey winning a new iteration of It's a Knockout although it will be interesting to see if any of these ideas end up being re-purposed by the next Government or become Private Member Bills.

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