Earlier today the Queen delivered her speech at the State Opening of Parliament and the Government's plans for the year ahead were unveiled.
The Speech contained a number of proposed laws relevant to both employers and employees and these are outlined in my blog below.
This Bill will replace, from 2016, the current basic state pension and earnings related top-up with a single tier state pension. The new pension scheme will provide a flat rate of £144 per week (by today's prices) to replace the current basic pension of £110 per week which can then be increased by various means tested top ups. Under the proposals in this Bill derived entitlement to the basic state pension will also be removed. This currently allows the basic pension to be claimed based on the National Insurance Contribution record of a spouse or civil partner. According to the BBC website, about 70% of these payments since 2010 were to men living overseas who married women who had a UK National Insurance contribution record.
The Bill will also bring forward the time at which the retirement age will be increased to 67, so that this will now be introduced between 2026 and 2028. Interestingly the Bill will also make it a legal requirement for the pensions regulator to consider minimising the economic impact pension provision has on employers that provide for their employees.
The overall aim of this Bill (as the name suggests) is to reduce the amount of regulation which individuals, businesses and public bodies are required to comply with. Under this Bill those who are self-employed will be exempted from health and safety legislation where their work poses no risk of harm to other people. Also the ability of Employment Tribunals to make wider recommendations where a successful discrimination claims has been brought will be removed. Currently this allows the Tribunal, under the Equality Act 2010, to not only make recommendations to benefit the successful claimant but also the wider workforce. For example the Tribunal can currently recommend that staff are re-trained or that an equal opportunities policy is introduced.
The Coalition's desire to enact legislation to curb immigration formed the centre piece of the Queen's Speech. See our accredited immigration specialist, Jamie Kerr's, blog on this aspect of the planned new measures.
National Insurance Contributions Bill
This Bill, if passed, would introduce an employment allowance of £2,000 for every business and charity from 2014. This aims to support small businesses through reducing the cost of employing people and the Government hopes this will encourage businesses to hire more staff and thus create more jobs. The Bill also contains various anti-avoidance measures, such as preventing the use of offshore payroll companies, which can be used to help companies avoid paying National Insurance. Also the General Anti-Abuse Rule will be extended to National Insurance and the Bill contains measures to prevent the use of abusive tax schemes which help people avoid paying the proper amount of National Insurance. Lastly the Bill removes the presumption of self-employment for Limited Liability Partnerships ("LLP"), which currently allows partners of an LLP to pay self-employed rates of National Insurance Contributions which are lower that those which apply to employees.
Other changes in relation to employment law are still planned to be made over the next year by the Government but they do not require primary legislation and therefore were not mentioned in today's speech.