Now we know what Government will be in place for the next 5 years, we can take a more focused look at what we can expect the employment law landscape to look like under a Conservative majority Government. We discussed in outline how each of the parties’ manifesto pledges could impact employment law, in our last update which can be found here.
The new Government is expected to prioritise laws on work and childcare. The Conservatives have said that measures on work and childcare will be at the heart of their first legislative programme due to be announced later this month and will be “fast tracked” through Parliament. Over the coming years, we can expect the following policy issues to feature on the agenda in light of the pledges made in the Conservative manifesto:
The Coalition Government had already paved the way for legislation requiring employers with over 250 employees to publish information on their gender pay gap prior to the election campaign. The current voluntary system, whereby companies can choose to disclose the difference between the average pay of their male and female employees, has seen very limited take up despite over 250 companies having signed up to the initiative. It will become compulsory by April 2016 for employers with 250 or more employees to publish their gender pay gap information in a significant change for employers.
The Conservatives propose to retain the recent introduction of fees in Employment Tribunals, though the legality of this system is still being challenged. Last month, Unison were granted permission to appeal their failed judicial review challenge of the fee system and that is expected to be heard this Summer. If the case is successful, it is possible that fees which employees have paid out could be ordered to be repaid.
National Minimum Wage (NMW) and the Living Wage
This was an election hot topic, with all parties declaring their support for the ‘Living Wage’ and an increase in the NMW. The Conservatives support an above inf lation rise in the NMW and have indicated that it will be over £8 by the end of 2020. They have said they will encourage companies to pay the Living Wage if they can afford it, although no further details have been provided as to how this will be encouraged.
In their manifesto, the Conservatives pledged to increase personal allowances to £12,500 by 2020. They also plan to raise the personal allowance automatically in line with the NMW under what has been termed the “Tax Free Minimum Wage Law”. Their manifesto said that this would be applied from the first Budget after the general election. This should result in people working 30 hours a week on NMW not having to pay any income tax.
Zero hours contracts
Zero hours contracts were another popular topic in the election campaign. Legislation is already on its way which will have the effect of banning “exclusivity clauses” in zero hours contracts, namely clauses in such contracts which do not guarantee any minimum amount of work but prevent the employee from working for another employer. The Conservatives have also pledged to enhance information and guidance available to improve transparency over the terms of zero hours contracts and the rights a worker will have under them. Given the controversial nature of zero hours contracts and the press interest in them, it is likely that this will remain a focus of the new government.
In/out European referendum
The Conservatives have pledged to renegotiate EU membership and hold an in/out referendum before the end of 2017. Recent press reports indicate that the referendum may even be brought forward. In the event the UK were to leave the European Union, this would have significant implications for employment law given that much of our domestic employment legislation is derived from European directives. Whilst an exit from Europe could result in significant changes to UK employment law, it would be unlikely that all existing employment law derived from Europe would be repealed. The new Business Secretary, Sajid Javid, has said that the Government will provide more information regarding the referendum over the coming weeks and months.
Human Rights Act
The Conservatives have stated their intention to repeal the Human Rights Act and instead introduce a British Bill of Rights. The party has made it clear that they want decisions on human rights to be made by UK courts and therefore propose that the Supreme Court would be the “ultimate arbiter” of human rights matters in the UK, breaking up the formal link between British courts and the European Court of Human Rights.
Other Conservative initiatives include; (i) as recently published, a reform of the strike laws, particularly in relation to essential services; (ii) a new concept of “volunteering leave” in the public sector and in companies with more than 250 employees (this leave would give employees up to three days’ paid leave per year in order to undertake voluntary work); (iii) the creation of 3 million new apprentices over the next 5 years; (iv) an increase in the number of women on boards; (v) an increase in the entitlement to free childcare for working parents; and (vi) halving the disability employment gap, the gap between disabled people’s employment rate and the rest of the population.
Many of the pledges set out in the Conservative manifesto are suitably vague, so it remains to be seen how these will develop under the new Government. Employment law has changed at a consistently regular pace since 1997 and many of the reforms that we have seen were not ones that had been predicted. With their unexpected majority, the Conservatives may feel emboldened to push forward with changes they have not previously thought possible. Sajid Javid has said that he will “look afresh” at aspects of employment law and regulations to encourage enterprise. It is likely that Europe will dominate the agenda until 2017 in light of the promised in/out referendum. Certainly, that has the potential for the greatest impact over the next five years for employment law and indeed more generally for the UK.