What Happens to the Contractor Market, if Labour Wins the UK General Election?

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Just like the weather outside as I write this, the winds of change are blowing through the world of work in the UK. If the polls are right and Labour wins the next general election, which is due to take place by January 2025, deputy leader Angela Rayner has pledged to overhaul temporary staffing, gig working and contracting within Labour’s first 100 days. This could have major implications for businesses relying on flexible workforces.? Rayner talked on Sky News about bringing in a "new deal for working people" including day-one rights for all workers, banning zero-hours contracts, and ending "bogus self-employment". The details are unclear, but businesses should start planning now for the impact on costs and supply arrangements.?

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Implementing these changes won't be straightforward. Simplifying the test for genuine self-employment has challenged many governments, Labour and Conservative, for decades. Add to this the current complex web of case law which makes status even harder to determine in many modern jobs and then throw in any new statutory definition risks creating loopholes and work-a-rounds. The banning of all "exploitative" zero-hours contracts would affect huge swathes of the economy. From elite daily rate professionals to casual hourly paid labourers, many roles involve no guaranteed hours. Are all these models set to change? Will rights apply from day one regardless of assignment length? This could create major administrative burdens for very short engagements.

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Part of the solution could be licensed "employer organisations" like guilds. They could act as employers of record for temps, contractors and gig workers. Providing pensions, holiday pay, training and benefits from day one of an engagement. This idea was suggested in the underutilised Taylor Review back in 2017 but didn't gain traction. Perhaps views will shift and see this as part of the fix rather than the problem.? If, and it's not yet a fait accompli, Labour wins the General Election, a swift consultation seems likely. Until then, we will need to watch out for policy announcements. Be ready to renegotiate supply contracts and change business models fast next year. And take great care drafting any long-term deals right now - they'll need flexibility for new processes and costs.

For clients relying on flexible workforces, what does this mean? Here are some key considerations:

• Look Out for Increased Costs: Extra employment rights and admin mean higher fees for temporary staffing and contractors. Be ready to adjust budgets.
• Prepare for Supply Disruption: Banning zero-hour contracts could mean shortages in some sectors if suppliers struggle to adapt models. Have contingency plans.
• Build in Flexibility: Long-term deals like MSPs will need mechanisms to accommodate regulatory change. Negotiate adjustable fees and exit options.
• Review Vetting and Screening Procedures: With complex employment status tests, audits of engagement models and rights compliance will be crucial.
• Work closely with Supplier Partnerships: Stay close to agencies, freelancer platforms and umbrellas on policy impacts. Brainstorm solutions together.
• Embrace New Models & Innovate: See this as a chance to improve. Trial employer organisations, portable benefits, and tech-enabled compliance.

While sudden change brings challenges, it can also clear away outdated practices and accelerate better ways of working. There are always opportunities in times of transformation and those Businesses willing to engage creatively can gain a distinct competitive edge. With the right preparations and partnerships, clients can navigate reforms smoothly and build more agile, ethically responsible workforces ready for the future.

As always, I'm here to advise on the best strategies and agreements to flexibly adapt as policies develop. The path ahead promises to be bumpy, but by staying alert and responsive, clients can keep operations running seamlessly. I'll monitor announcements closely in the coming months and years to translate each development into practical guidance. Whether advising on cost forecasts, supply chain risk management, contract negotiation or compliance processes, my aim is simple - to help clients continue delivering excellent services to their customers in this new era of employment. Though the destination is still unclear, with collaboration and imagination, we can find the right route forward.