Cutting red tape

To make good the Coalition Government’s promise to promote a smaller state, the Business Secretary Vince Cable announced new rules to cut red tape, which were applied from September. The idea is to cut unnecessary regulation on businesses and the voluntary sector by making ministers proposing new domestic legislation first identify existing laws with “equivalent value” that can be removed.

A number of employment measures have already been targeted. These include the new maternity and paternity regime, due to come into effect next April but which the Government thinks could be made more flexible. Under the provisions bequeathed by the outgoing Labour administration, only the last six months of maternity leave are transferable to the father. Before the election, the Conservatives had thought it might be possible to adopt a still more flexible regime. However the Coalition Government has recently announced that the new regulations will come into effect in April as originally planned, but as an interim measure. It will be consulting later this year on more radical proposals to encourage shared parenting from the earliest stages of pregnancy.

The right to request time off to train (introduced for larger employers last April) is also under review. The options addressed in a consultation document published over the summer include the complete abolition of this new right.

In the early summer, the Government put the brakes on the registration scheme under the Safeguarding Vulnerable Groups Act, weeks before the first phase of implementation was due to start. Announcements were also made about axing the Agricultural Wages Board, and abolishing the code of practice that seeks to prevent the emergence of a “two-tier” workforce when local authority functions are outsourced. The Government has also promised to look at the “antiquated” legislation about child employment.

We know from previous policy statements that the Government would also like to water down the outsourcing provisions in the TUPE regulations and to make the Agency Workers Regulations, due to be implemented in October 2012, more employer friendly. Both these provisions are underpinned by EU law, so its room for manoeuvre here is more limited.

Ironically, because of the implementation of the Equality Act, the volume of legislation that employment lawyers have to apply has swollen considerably since the Coalition Government came into power. That’s because, although the Act will repeal and replace most of Britain’s historic discrimination legislation, we will still have to refer to the old law for a while yet while the transitional provisions work through.

Ending the default retirement age

Not all repeals are as popular with employers, however. One example is the Government’s plan to abolish the default retirement age, which currently allow employers to retire staff compulsorily at 65 without facing age discrimination claims. Announced in a consultation document published over the summer, the change would be implemented from 1 April 2011, with transitional protection for retirements notified before that date and taking effect before the following October. Given that the transitional provisions apply only where at least six months’ notice of retirement has been given, that does not give businesses much time to adapt to the new regime.

It will still be possible to retain a compulsory retirement age, but only if it can be objectively justified. The case law on this topic is still developing. A recent decision of the Court of Appeal in a partnership case (where the exemption has never applied) could be taken as suggesting that a compulsory retirement age of 65 for non-manual workers may still be justifiable in some circumstances. But a more cautious view would be that this will rarely be possible unless the job is physically demanding, as it is only in such a context that there is sufficient data available linking increasing age with a decline in performance.

It is also uncertain what consequential amendments will be needed to the unfair dismissal legislation. At present, retiring someone compulsorily at the age of 65 or over will normally be a fair dismissal. We do know that the elaborate procedures that allow employees to ask not to be retired will be abolished, but it is not clear exactly what if anything will take their place.

Flexible working

The Government has announced that, from April next year, the right to request flexible working will be extended to parents of children under 18 years old. It is estimated that this extension of one year (it currently applies to children under 17) will affect around 288,000 employees.

The Government will be consulting later this year about plans to extend the right to request flexible working to all employees, as part of its plans to the make sure the law “better supports real families juggling work and family life, and the businesses that employ them”.

Other legislation in the pipeline

The new Government’s first Queen's speech contains some clues about other plans that could affect employers, but it is very short on detail. Potential measures worth noting here include:

  • taking steps to tackle the gender pay gap, which could be in addition to plans already announced to promote flexible parental leave and flexible working;
  • abolishing ID cards; and
  • limiting the number of immigrants from non-EU countries, though it is not clear how this will be achieved.

Some limited steps to address the gender pay gap (such as limiting the use of pay secrecy clauses) have already been taken in the Equality Act 2010, but the most radical measure, which could have required larger private sector employers to publish details of their gender pay gap, has not been brought into force.