What does the Labour manifesto mean for employment?

Less than two weeks into Britain’s new Labour government, it would seem that Sir Keir Starmer has hit the ground running.

From the establishment of the National Wealth Fund to a review into the state of the NHS, it’s been a busy few days as the PM and his newly appointed cabinet put the Labour manifesto into action. And that’s in addition to a trip across the pond for a NATO summit with world leaders.

But with promises of a ‘New Deal for Working People’ and legislation promised within the next 100 days, all eyes are on the Labour manifesto for change, with questions about what the next few weeks, months and years have in store not only for the recovering UK economy but for ordinary working people.

As we move through the coming months, we will be taking deep dives into some of the biggest issues for workers and the Government’s plans to address them. For now, we’re kicking things off with a roundup of some key policies from the Labour manifesto that could impact workers across the UK and asking the question: what will the next few months bring in the world of employment?

Dive deeper: How can Kier Starmer ensure a smooth transition into leadership?

The Living Wage

The cost-of-living crisis has had a huge impact on finances across the working population, putting salary front of mind for many, struggling to balance their household’s books. Our own cross-sector data shows just how important salary is, with satisfaction levels with pay dropping from 54% in 2021 to 44% in 2023, despite record salaries.

It is no wonder then that workers’ pay is something that crops up multiple times within the Labour manifesto – particularly in relation to the Living Wage. Not only has the Government pledged to change the remit of the independent Low Pay Commission to account for the cost of living but they have promised to ensure the minimum wage is a genuine living wage. They will also remove current age bands, making all adults (18+) entitled to the same level of minimum wage.

While this does potentially mean a pay rise for hundreds of thousands of workers, the changes could be a double-edged sword for businesses, particularly small businesses who could be faced with a significant increase in operational costs.

With salary still sometimes considered a taboo subject, it’s crucial for businesses of all sizes to ensure that employees have a platform for open, transparent conversations around salary expectations, to properly prepare for any incoming changes.

Workers’ rights

As well as an all-out ban on zero-hours contracts, the Labour manifesto pledges to introduce basic day-one rights which will see workers entitled to sick-pay, parental leave and instant protection from unfair dismissal from their first day in a role. There are also plans to ‘strengthen the collective voice of workers’ through a Single Enforcement Body that will be in place to ensure that employment rights are upheld.

Should these policies be introduced, the changes could spell major changes for businesses in not only the way they recruit, but the way they manage their staff.

Perhaps now more than ever, it will be crucial for businesses to employ robust listening strategies, for example through regular employee engagement surveys, to ensure that they are regularly taking the pulse of their workforce, identifying potential sticking points and gathering insights that will guide their policies going forwards.

Better access to work

Headlines earlier this year revealed an increasing number of people out of the workforce as a result of being ‘long-term sick’, with one in ten sick notes issued due to mental health issues. Tackling the perception of ‘sick note Britain’ is another of the key aims within the Labour manifesto.

Underpinned by a change in workers’ rights and responsibilities, and consequences for businesses or employees who don’t fulfil their obligations, the PM has made it clear that he believes those who can work, should work.

What could that look like in practice? Firstly, it could mean major changes to Job Centre Plus and National Careers Service which will merge to help more people into work and better support them once they’re in employment. There are also plans for changes to the Access to Work system, to help more people with health conditions or disabilities into the workplace, making the workplace more inclusive.

This will require employers to reassess how they support their staff, not only taking a look at how they can protect their employees mental wellbeing, utilising things like employee wellbeing surveys but also what they can do to ensure that they are fostering an inclusive, supportive culture for employees with a range of needs.

Read further: What does it mean to be a good leader in the UK?

For more analysis on Labour’s plans as they progress, make sure you check back over the coming weeks and months where we’ll be decoding what it could mean for employees, employers and organisations as well as sharing our advice on how best to navigate business in times of change.