Navigating Political Change: Elections, Employment Law and the Future of Work

Political change plays an important role in shaping the world of work, although it often receives less attention than other large-scale forces of change, such as technology, demographics and sustainability. However, Donald Trump and the Republican Party’s triumph in November’s US elections triggered a renewed focus on the impact of political change on the world of work.

In this in-depth article, we look at how the global political landscape is changing in economies like the UK – Western Europe, North America, Australia and New Zealand – and consider what conclusions we can draw to help businesses, particularly those operating across borders, to look ahead and navigate an increasingly complex and uncertain political landscape.

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While recent global elections have put the spotlight on the role political change has in shaping the world of work, there are other important drivers of change to consider.

Technology, demographics and sustainability are significant drivers transforming the world of work. Technological advances have thrust regulating AI in the workplace high up the agenda. Constant connectivity has led to a right to disconnect laws or codes of practice being introduced. Connectivity (and the pandemic) has caused many to value remote or hybrid working with consequent laws governing workers’ rights to work flexibly. Technology and a demand for flexibility has led to a myriad of irregular working relationships such as the platform economy where employment laws designed for a previous era have struggled to keep up with the evolving world of work.

National backlashes against migration have caused governments to increase minimum wage levels to encourage domestic workers to fill lower paid roles historically often the province of migrant labour. Social changes have resulted in governments improving family rights and equality laws.

Governments of all persuasions have needed to adapt to this changing world of work and approach employment law reforms against this shifting landscape. Businesses have needed to assess organisational and people strategies to prepare and respond to these large-scale forces of change.

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Each country’s political evolution and systems have their own individual nuances. For example:

• In some countries, influential political parties are based on regional independence or religious or language divisions.

• In countries like the UK and the US (with first past the post constituency based electoral systems) bigger parties tend to dominate and it can be more difficult for new parties and new politics to emerge than in countries with systems based on proportional representation which rely on coalitions with smaller parties. These coalition governments are often very unstable as recent events in Germany and France have highlighted.

Notwithstanding these differences, for generations, political change (as opposed to government decisions on tax, trade policy and investment, for example) has generally had limited impact on the world of work. Employers have relied on migrant labour to fill skills gaps and labour shortages. A broad political consensus has existed concerning the thrust of employment regulation (influenced in Europe by the development of a body of EU social laws). An increasing focus on diversity, equity and inclusion has been uncontroversial. A prominent role for trade unions in representing the workers has been accepted. Divergent social and political views were largely kept outside the workplace.

In many countries, a traditional economic political axis – a centre-right/centre-left duopoly – survived for generations. Although power fluctuated between the two parties, these ebbs and flows had a degree of predictability for employers.

In recent years, however, these accepted norms have come under pressure as the political status quo is threatened in many countries around the world. We’ve seen various themes emerging globally from recent elections – incumbents falling; support for populism rising; and politics fragmenting. And these political shifts are increasingly having a direct impact on employers.

The predictability the traditional centrist parties offered began to break down with the financial crisis in 2007/2008. Insipid economic growth and increasing inequality led to voters becoming poorer year on year with no longer an optimistic future of greater wealth than the generations before them. Global economic shocks from the pandemic and Russia’s invasion of Ukraine exacerbated tensions and both centre-left and centre-right governments seemed unwilling or unable to address their electorates’ woes.

These economic trends were coupled with technological and social change reinforcing the perception of many voters that they were being left behind. Misinformation and fermented disquiet on social media fuelled this further. Voters became disillusioned and disenchanted with the “establishment” and became increasingly open to considering alternatives.

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Employers have become used to centrist governments advancing a consensus politics embracing the benefits of the free-market, globalisation, labour migration and stable employment regulation. The emergence of populist parties of the right and the potential re-emergence of left-wing and Green parties threatens this. Not only are such parties becoming more influential but centrist parties are aping some of their policies to mitigate against their threat. This shift has elevated the focus of political change as an important driver of change in the world of work.

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The level of employment regulation in any country is linked to its legal and industrial relations history as much as current politics. The current level of regulation often reflects the limited influence largely centrist governments had on employment laws. The OECD publishes data on the level of employment protection in all OECD countries. The latest OECD data from 2019 shows that, among Western European countries, US, Canada, Australia and New Zealand – protection is weakest in the US and highest in the Netherlands.

This level of protection does not correspond to the politics of the current-day governing party. The Dutch government in 2019 was a centre-right coalition but had the highest level of employment protection. Canada, which is amongst those with least protection, for example, had a centre-left government at this time.

Even if the level of employment regulation relative to other countries is driven more by its legal and industrial relations history, to date political change has impacted on employment regulation relative to the position before that government came to power. A de-regulating government will de-regulate and a regulating government will increase regulation even if that country’s level of regulation compared to other countries might not change dramatically. The potential for more significant change in the level of regulation is evident with a shift beyond centre right and centre left governments.

France, with notoriously strict laws, saw a relative relaxation under centre-right Emanuel Macron but France’s laws remain restrictive comparatively. The UK’s centre-left government’s new employment law proposals may well be very significant domestically, but the UK will remain relatively employer-friendly even after these reforms. Argentina’s libertarian government’s reform marks a very significant move away from previous employment regulation, but globally are not far away from regulation commonly seen elsewhere.

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With politics fracturing and a range of political ideologies emerging, businesses face real uncertainty about how the legislative agenda might evolve and, in some cases, diverge.

As we’ll explore below, political shifts are likely to impact employers and employment law more significantly in the future. For example:

• Attracting both highly-skilled and low-skilled workers from overseas is likely to become more difficult for business.

• Promoting diversity, equity and inclusion is likely to become more controversial and contribute to societal divisions which spill over into the workforce.

• Significant change to employment laws and trade union rights is likely to increase.

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Over the last five years or so, the absence of any clear link between populism and employment laws has been a steady trend.

However, as populist parties gain increased power in many countries and other parties ape their agenda, employers could expect:

• Hiring migrants to both low paid jobs and highly-skilled jobs to become increasing difficult.

• Increased pressure to dial down on DEI initiatives (or at least, to progress such initiatives with less fanfare).

• Dismissal laws being relaxed (though not necessarily employment laws more generally).

• Minimum wage levels being preserved and even increased.

• Possibly even rules to favour home country nationals over non-nationals in the workplace.

Populist parties of the right generally espouse traditional/authoritarian/nationalist social values. However, they do not necessarily reflect the right-wing small state, pro-business, low tax, deregulation, free market politics historically associated with right-wing political parties. So-called right-wing populist parties vary significantly in their economic politics and their approach to employment regulation and trade unions is consequentially variable. This is not surprising as these politicians target voters that are often those most likely to benefit from workers’ rights and trade union protection.

The common social values of right-wing populists mean that they share support for strict migration policies. These hard-line policies can embrace opposition to all forms of migration from highly-skilled work migrants, low paid migrants, students, asylum seekers and dependants. It may well be that the reality of restricting low paid migrants and students will quickly confront any right-wing populists who introduce such polices with the higher pay needed to attract local workers to replace low paid migrants quickly, resulting in cost of living rises or higher taxes in conflict with the other priorities of their base voters.

Populist right-wing parties are generally opposed to so-called “woke” politics including DEI and sustainability initiatives. The increased divergence and intolerance among workers between supporters of right-wing populism with its traditional / authoritarian / nationalist values and liberal / progressive / internationalists is leading to an increase in social division which threatens to spill over into the workplace.

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Donald Trump’s Republicans represent the starkest example of far-right populists who share both the traditional/authoritarian/nationalist social values and right-wing economic policies. However, the US position is complicated. Many employment laws are determined at state level and divergency between Republican and Democrat-led states will continue. The Republican’s wafer-thin majority in the House of Representatives may also act as a brake on more radical changes. Further, the National Labor Relations Board which regulates collective bargaining and unfair labour practices will continue with a Democrat majority for the time being. Trump said little about specifics of employment law reform during the election campaign. Nonetheless, we can expect some changes from the new regime.

Over time, under Trump, trade union powers are likely to be curtailed, diversity initiatives scaled back, health and safety rules loosened, and the extent of employment regulation governed by Presidential executive orders reduced. For example, Joe Biden’s Executive Order on Safe, Secure, and Trustworthy Artificial Intelligence which promised to enforce controls on the use of AI in the workplace is likely to be rescinded. Trump’s tenure can also expect to see steps taken to make it easier to classify workers as independent contractors. The Trump government’s election focus on immigration is likely to result in both hiring migrants to fill low paid jobs and highly-skilled migration becoming more difficult.

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Right-wing populists’ approach to employment regulation in Western Europe varies but does not follow consistently a right-wing economic deregulation model.

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Giorgia Meloni’s government is the one example of a populist right-wing government in power in Western Europe. Meloni’s government has not been one of deregulation and had increased employment protection rights and enforcement for many workers.

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Le Pen’s Rassemblement National Party promotes some deregulation and talks of “simplifying the regulatory environment” to include reduced regulation over small and medium sized businesses. She supports a simplification of dismissal procedures and a greater flexibility in employment contracts. On the other hand, Rassemblement National Party advocates enhanced workers’ rights to parental leave, to work flexibly and to disconnect and supports a shorter working week. Most controversially, Le Pen promises to prioritise French nationals over non-French nationals for jobs. As far as prioritising French nationals over other EU nationals, she would come into immediate conflict with EU anti-discrimination rules.

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The AfD has a greater deregulating zeal than some other right-wing populist parties. It favours deregulating to make it easier to dismiss workers. It expresses support for the minimum wage but not for increasing it. It also proposes increasing regulation by restricting the use of temporary contracts. In a similar vein to France, the AfD calls for some deregulation by way of an urgent need for labour laws which “unify individual laws” and put an end to “excessive and inconsistent legal arbitration”. The AfD faces the same dilemma as other right-wing populists where their base comprises many of those who benefit most from employment protection laws.

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The Dutch PVV Party supports increasing minimum wage levels. Like its sister populist parties, it supports making dismissal easier (as with other populist parties, it refers to making “hiring and firing” easier but it is the firing not the hiring which tends to be regulated and which will be the target of reform). The PVV also talk of ending unnecessary rules and obligations for the self-employed and stopping EU “interference” in the Dutch labour market.

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The Reform Party said little in its manifesto about employment law. It proposes axing all EU-derived employment laws, but this reflects its anti-EU ideology rather than any deregulatory zeal.

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The Freedom Party is, arguably, closer to Trump’s combination of populism, right-wing social policies and right-wing economic policies. The Freedom Party promotes more openly the benefits of deregulation. Like many others, it wants to reduce burdens on hiring and firing and also, unlike, for example, Le Pen, making working hours rules more flexible. It is opposed to a national minimum wage and advocates reducing welfare payments. Unlike the French and Dutch populists who would reduce retirement ages, the Freedom Party would incentivise older workers to remain in employment.

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A resurgent left-wing populist movement in European could have more profound implications for employment law that any radical change from right-wing populist governments.

Employers could expect:

• Radical changes to employment regulation making employment dismissals more difficult.

• Steps to limit high pay/a higher minimum wage.

• Limits on and greater regulation of irregular working arrangements.

• Increased powers of unions and works councils.

• Greater State enforcement of workers’ rights.

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The left has garnered most support in France. In both the 2022 and 2024 elections, left-wing parties grouped together as NUPES (2022) and Nouveau Front Populaire (2024). The compromise policies of the group focused, as far as the workplace is concerned, on reversing Macron’s unpopular increase in the retirement age to 64 by reducing it to 60.

The possible ramifications of a government further to the left than we have seen with centre-left governments around the world can, however, be seen from France Insoumise’s manifesto for the 2017 presidential and legislative elections, The Common Future. As well as reducing the retirement age to 60, the proposals included:

• Banning redundancies when the business is not in financial trouble.

• Works councils’ right to veto dismissal plans.

• Redundancies suspended whilst legal challenges are completed.

• 35-hour working week.

• Restricting “precarious” employment contracts such as fixed-term contracts.

• Maximum salary of 20 times the lowest paid.

• Banning golden parachutes and stock options.

• Reinforcing and guaranteeing the powers of the labour inspectorate.

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For the 2017 and 2019 general elections, the UK Labour Party under Jeremy Corbyn’s leadership advanced employment policies in their manifesto which reflected closely the changes to be introduced by the new Labour leader Keir Starmer’s Employment Rights Bill. However, in 2017, in common with Mélenchon’s policies, it included a maximum salary of 20 times the lowest paid employee for public sector employers and companies bidding for public sector contracts.

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The populist left wing BSW in Germany promotes increased minimum wages, higher pensions and pro-union policies.

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Employers could expect:

• Extreme deregulation of employment laws.

• No increase to minimum wage levels.

• Reduced role for trade unions and works councils.

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Javier Milei’s proposals to reform employment law came into force in July 2024. These marked a major deregulation of employment laws. However, the changes move Argentina to a regulatory framework which would be recognised across much of Europe rather than any deregulated libertarian free for all.

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Denmark’s Liberal Alliance Party and New Zealand’s ACT Party, both examples of the libertarian right, favour deregulation of employment laws and the freezing of national minimum wage levels.

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Greens tend to advocate greater employment regulation focused on gender equality, family-friendly laws, working hours limits, enhanced rights for non-standard workers, improved minimum pay laws and enhanced collective bargaining rights.

Employers could expect:

• Increased employment protection rights.

• Greater role for collective bargaining.

• Limits on high pay.

• Improved family-friendly rights.

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Some policies Green parties promote are sometimes seen as more radical proposals than those of other political ideologies. For example, the UK Greens have, in past manifestos, included a right to remain in employment pending a challenge to the fairness of the dismissal and a requirement to prove redundancies are unavoidable or in the public interest. These can be compared to some of the more controversial proposals articulated by Mélenchon’s left-wing party in France (above).

In the UK Greens’ 2024 election manifesto this theme continued with proposals including a maximum 10:1 pay ratio (more ambitious even than Jeremy Corbyn or Mélenchon’s 20:1 proposals) and a move to a four-day working week.

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Employers could expect:

• Improved rights for non-standard workers.

• Greater regulation over the use of AI in the workplace.

• Increased minimum wage.

• Right to disconnect.

• Pay transparency laws.

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After 14 years of centre right rule, one of the UK’s Labour Party’s flagship laws is the Employment Rights Bill which promises the biggest change in employment rights in a generation and a rebalancing of rights in favour of the employee. Measures include day one unfair dismissal protection; protection for zero hours workers; improved family-friendly and sick pay rights; increases to minimum wage; and enhanced rights for trade unions. The Labour government also promises to consult on further reforms.

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As with the UK, in 2022 the centre left Australian Labour Party government came to power after a lengthy period (nine years) of centre-right governments. It quickly introduced a range of employment law reforms including increased rights to work flexibly, prohibiting pay secrecy, increasing protections against discrimination and harassment, limiting fixed-term contracts and higher minimum wages. More recently, prime minister Anthony Albanese’s government introduced a right to disconnect.

It may well be that, out of political expediency if nothing more, and reflecting on lessons from the US election, centre-left parties will adopt increasingly strict immigration policies and dial down on some of the more contentious DEI laws (though probably not those designed to drive greater gender equality).

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Pro-business centre-right parties generally pare back employment regulation and reduce trade union rights.

Employers can expect:

• Limited additional employment regulation.

• Stricter immigration rules particularly for low-skilled jobs.

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Macron’s electoral platform prominently included reducing employment regulation including, for example, making it easier to make redundancies and simplifying workplace social dialogue. These reforms which were controversial in France, nonetheless, left the country highly regulated in comparison with other comparable economies.

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The UK Conservative Party’s 14-year reign in the UK saw limited changes to employment laws save most notably for increased restrictions on industrial action. Arguably, the more populist shift under Boris Johnson’s leadership of the UK Conservative Party altered the Conservative’s electoral base and, as seen elsewhere, mitigated against reducing employment rights.

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Right-wing populists are on the rise in many places. But the policies of these parties vary considerably. The likely causes of the growth in support, namely disillusionment with the failure of centrist politicians to tackle growing inequality, low growth and a cost-of-living crisis for many, shows no sign of abating. Support for alternative politics may grow. We could easily see support for resurgent left-wing or Green politics. And although the days of centrist governments are far from over, we are likely to see centrist parties adopt some of the more populist policies, especially in relation to immigration.

In differing ways, right-wing populism or left-wing governments would pose challenges for multi-national employers.

With the right-wing populists, work migration promises to be severely limited. With national minimum wages increasing, not least to encourage local workers to undertake the jobs historically filled by low paid migrant workers, many employers may look to alternatives, including automating this work. With highly-skilled workers, the drive to limit numbers might not always match the zeal for restricting numbers of low paid migrant workers and future governments of any persuasion are likely to face a future world where governments compete for workers of the world with the skills needed for the jobs of tomorrow. Even so, any difficulties created by, for example, absolute caps on migrant numbers may cause some businesses to move elsewhere. These geographically mobile companies may also look to relocate from countries with traditional, autocratic, nationalistic governments if increased social division drives away the best people. Employers may well, nonetheless, welcome a general relaxation of rules on dismissal which right-wing populists generally advocate, even if this does not herald a broader bonfire of “red tape”.

Businesses will also watch any rise of left-wing politics with caution noting the increased regulation and taxes advocated by some of Europe’s stronger left-wing parties. Some of the more radical ideas, such as capping senior executive pay as a multiple of the lowest employee’s pay, would raise significant alarm for many businesses.

Anti-DEI politics in the US and an ongoing uncertain economic outlook across the globe will have long-term implications for DEI. There may be a scaling back of DEI budgets and programmes, particularly in US-headquartered organisations. And while workplace DEI initiatives will continue to evolve in jurisdictions needing to comply with upcoming EU and domestic political reforms, they may be given less publicity and possibly even be subtly reframed, with diversity becoming a less well-used term and more explicit emphasis on respect, inclusion and fairness and the “S” in ESG. Nonetheless, the strategic imperative for organisations to attract and retain the best people and meet evolving employee activism and voice at work will mean employers will continue to deliver on diversity and inclusion and sustainability whatever the febrile politics. The drive for gender equality will gather pace and we anticipate greater emphasis on generational and social inclusion.

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Donald Trump’s re-election in the US has catapulted political uncertainty, change and fragmentation to the top of many employers’ agendas, particularly those operating across borders. In this state of flux, monitoring and preparing for political change will be a key responsibility of those involved in workplace planning in the years ahead.

In the same vein employers should not lose sight of the other, interconnected drivers that are also transforming the world of work. Technology, demographics and sustainability are all playing a significant part in what is becoming an increasingly complex landscape for businesses.

Moving forward there can be no doubt that the interplay between elections, employment law, and these interconnected drivers will all continue to shape the future of work. Businesses must remain agile and forward-thinking if they wish to successfully navigate this dynamic and shifting environment.

*Lewis Silkin