Given that the Conservatives lost their parliamentary majority and the election ended in a hung Parliament, it would now appear that they can only continue to govern with the support of the Democratic Unionist Party (DUP). The current position reported in the press is that the Conservatives will agree an informal 'confidence and supply arrangement' with the DUP instead of a formal coalition. This update considers what this outcome is likely to mean for employers.
During the election campaign, Theresa May asserted that the Conservative manifesto represented the "greatest extension of rights and protections for employees by any Conservative Government in history". This update sets out the key workplace changes proposed by the Conservatives in their manifesto, policy statements and pledges made in the lead-up to the election and which may be introduced, taking into account the workplace policies supported by the DUP.
The DUP's manifesto supported some policies which also appeared in the Conservative's manifesto, such as increases in the personal tax allowance and continued rises in the national living wage but, unlike the Conservatives, they also support maintaining a triple lock on pensions.
Theresa May has said that workers will enjoy the same rights after Brexit as they do currently. The Great Repeal Bill will convert EU law into UK law when we leave the EU. After that, Parliament will be able to pass legislation to amend, repeal or change any piece of that EU law.
Although our human rights laws will be retained during the Brexit process, once this process has been concluded, the government will reconsider these laws.
Worker representation on boards
Theresa May has promised to give employees a voice in corporate governance. Listed companies will either be able to nominate a director from the workforce, create a formal employee advisory council or assign specific responsibility for employee representation to a designated non-executive director.
National Minimum Wage
The Conservative Party pledged that the national living wage will be increased in line with the current target of 60% of median earnings by 2020. Rises in the national living wage are also supported by the DUP.
Employment status, the gig economy and tax
After the Taylor Review into employment practices has concluded this summer, the government will take steps to ensure that the self-employed and those working in the gig economy are properly protected.
Proposals to increase national insurance contributions for the self-employed earlier this year were abandoned but national insurance contributions rises in the next Parliament have not been ruled out entirely.
The Conservatives and DUP support an increase in personal income tax allowance. Theresa May announced they would raise this allowance to £12,500, with the higher tax rate starting at £50,000.
Closing pay gaps
The government plans to extend gender pay gap reporting for large employers, requiring them to publish more data on the pay gap between men and women – although it is not clear what further details would be required. In addition, the Conservatives will pursue existing initiatives to improve the number of female directors on boards.
Large employers will also be required to report on pay disparities between individuals from different ethnic backgrounds (the "race gap").
New leave rights
The government plans to introduce new leave rights, as well as seeking to improve the take-up of shared parental leave and helping companies to offer more flexible working environments.
The right to unpaid time off will be made available for workers with a family member who requires full-time care, allowing them to take between 13 and 52 weeks off work and to return to the same job and retain their employment rights.
A new entitlement to child bereavement leave will be introduced so that parents whose child has died could take two weeks' paid leave.
In addition, all employees will have the right to request unpaid time off for training (this right currently only applies to employees working in an organisation which has 250 or more employees).
Rights for parents and carers returning to work
The Conservative manifesto set out proposals for helping parents and carers who have taken time out to look after children or to care for a relative to acquire skills and experience to enable them to return to work. Employers would be offered support to take on parents and carers in this situation.
Mental health protection and disability inclusion
The government intends to extend discrimination protection to cover individuals suffering from mental health conditions that are "episodic and fluctuating". This proposal appears to be aimed at individuals who have depression, anxiety and bipolar disorder.
Changes will also be made to health and safety regulations, requiring employers to provide appropriate first aid training and needs-assessment for mental health in the same way as they currently do for physical health risks.
In addition, the government aims to get one million more people with disabilities into employment over the next decade and will provide employers with the support needed to hire and retain them.
The Conservatives plan to extend the remit of the directors' remuneration regime by making executive pay packages subject to annual votes by shareholders and to hold an investigation into the use of share buybacks to hit performance targets and inflate executive pay.
Increasing the Immigration Skills Charge
The Immigration Skills Charge levied on companies employing migrant workers will double to £2,000 a year by 2022 and the Conservatives have promised to cut net migration to “tens of thousands".
Protecting occupational pension schemes
The Pensions Regulator will be given new powers to scrutinise acquisitions that may impact on the sustainability of a pension fund. The Regulator will also have the power to issue fines if it is found that a pension scheme has been left wilfully under-resourced and, if appropriate, disqualify the company directors. The government will also consider introducing a new criminal offence for directors who deliberately or recklessly put at risk the ability of a pension scheme to meet its obligations.
It remains to be seen whether the Conservative government will be able to introduce all of these changes, especially now that (assuming they reach an agreement with the DUP) they will have such a slim majority, and at a time when the priorities are likely to be Brexit and national security. If Theresa May does manage to keep her pledges, there won't be dramatic changes in workplace law, but we do expect to see a widening of employment rights and additional obligations for employers.