Camino Partners' Managing Director, Matt Newman, chats to Nicola Ihnatowicz, Employment Partner at leading recruitment employment firm Trowers and Hamlins, about what the forthcoming election could mean for the staffing and recruitment sector based on an overview of the political parties' manifestos.

Matt Newman (MN): Will a change in government have any impact on the hiring processes for employers?

Nicola Ihnatowicz (NI): Not on the process itself, but changes being proposed by Labour might make employers more cautious before committing to permanent employment.  Labour's manifesto commits to basic individual rights from day one for all workers, including unfair dismissal.  It has stressed that this will not prevent fair dismissals and has stated that employers will be able to operate probationary periods with fair and transparent rules and processes to avoid people on their probationary period being fired without good cause.  In view of these potential new day one rights, it may be that employers will take longer to make recruitment decisions because of the potential ramifications of getting it wrong.  We might also see a rise in more interim consultancies as a precursor or an alternative to employment in some sectors.

At the opposite end of the spectrum, Reform UK has stated its intention to slash business red tape "including employment laws that make it riskier to hire people".

MN: Are there any plans to change the law around employment status?

NI: The Liberal Democrats state that they will establish a new "dependent contractor" employment status and review the tax and NI status of employees, dependent contractors and freelancers to ensure fair and comparable treatment.  Meanwhile the Greens will push for equal employment rights for all workers from their first day of employment, including those working in the gig economy and on zero-hours contracts.

Labour plans to introduce a single status of worker and transition towards a simpler two-part framework for employment status that differentiates between workers and the genuinely self-employed. 

MN: Will there be any changes to IR35?

NI: The only party to have specifically mentioned IR35 is Reform UK.  It has declared that it will abolish IR35 to support sole traders.  For the other parties, it looks like IR35 is here to stay.

MN: Will employment tribunal fees be reintroduced?

NI: The manifestos are all silent on the topic of employment tribunal fees.  Earlier this year the Government  launched a consultation on the reintroduction of tribunal fees whereby it would cost an individual £55 to bring a claim.  No response has been published as yet, and it is uncertain whether a new government would take this proposal forwards.  If Labour win tomorrow, I'd be surprised if they do.

MN: Are there any proposed changes to sick pay or holiday pay?

NI: Both Labour and the Lib Dems have said that they will remove the lower earnings limit to make statutory sick pay available to all workers.  They have also committed to payment being made on the first day of missing work rather than on the fourth day of sickness absence.

Noone is proposing holiday pay changes however, so we're going to have to keep getting to grips with the changes to the Working Time Regs that came in in January.

MN: Are there likely to be any changes to "fire and rehire"?

NI: The Code of Practice (Dismissal and Re-engagement) Order 2024, which was made on 24 May 2024 (as part of the Parliamentary "wash-up") is due to bring into force the statutory Code of Practice on dismissal and re-engagement on 18 July 2024.  However, given the general election takes place before then it's debateable whether this will happen.  Labour has pledged to end "fire and rehire" and has committed to reforming the law to provide effective remedies against abuse.  It says it will implement a "strengthened code of practice".

MN: Will there be any changes in terms of skills and training?

NI: Yes, almost certainly.  The Conservatives have said that they will create 100,000 more apprenticeships in England every year before the end of the next Parliament. They will deliver what they term "the Lifelong Learning Entitlement" which will give adults support to train, retrain and upskill flexibly throughout their working lives.  Meanwhile the Lib Dems have said they will invest in people's skills by replacing the apprenticeship levy with a broader and more flexible skills and training levy.  They will boost the take-up of apprentices and will also create a new Lifelong Skills Grants for adults to spend on education and training throughout their lives.

Reform UK has promised tax relief for businesses that undertake apprenticeships, while Labour has committed to reforming the Apprenticeship Levy and creating a flexible Growth and Skills Levy, with Skills England (a new body) consulting on eligible courses (these will be from an approved list of essential skills such as digital and green skills, social care or childcare) to ensure qualifications offer value for money. 

MN: Are there any key items in any of the parties' manifestos that will present a radical evolution to existing employment law?

NI: Yes, Labour has pledged to update trade union legislation and will repeal the Trade Union Act 1996 (this introduced longer notice periods for industrial action, higher ballot thresholds for public services and a six-monthly expiry deadline for ballot mandates).  It will also repeal the Strikes (Minimum Service Levels) Act 2023 which currently enables the government to set minimum service levels for strikes in certain relevant services.

Under Labour, trade unions will be strengthened and trade union representatives will gain new rights and protections.  It will also introduce a new duty on employers to inform all new employees of their right to join a union, and to require this as part of the written statement of particulars that all new workers receive when starting a job. This will apply whether or not the employer recognises a union.

About Trowers and Hamlins
Trowers' specialist recruitment team offers comprehensive commercial, legal, and regulatory advice to recruitment businesses. We support recruitment businesses through growth, restructuring, or exit, ensuring the best outcomes. With expertise in employment, compliance, and candidate engagement, we help you navigate challenges and seize opportunities in an evolving landscape. Contact us to discuss your business growth needs - https://www.trowers.com/sectors/recruitment

About Camino Partners
Camino Partners is the leading staffing consulting partner to the recruitment industry. Now in its second decade of supporting other recruitment companies with specialist support staff hires, our consultants advise companies in the UK and USA with strategic hires in their back office functions across;  accountancy and finance, board and c-suite, marketing, operations, human resources, legal and compliance and learning and development positions. please reach out to our subject matter expert, Matt Newman, at matt@caminopartners.co.uk for more information.