General Election 2015 - The Implications
Meredith Hurst Monday, May 18, 2015
Employment law is much like fashion with trends we have been glad to see the back of, reappearing with successive governments. This is particularly relevant to the unfair dismissal qualifying period of service. New Labour reduced the qualifying period from two years to one and then the pendulum swung back again under the Coalition government when we saw an increase to a two year qualifying period. This will remain the same under a Conservative majority.
If the pre-election pollsters were to be believed, then anything could have happened and a hung Parliament looked likely. That was not to be and a surprise Conservative victory, albeit with a slim majority, means that there are likely to be fairly robust employment policies, the watchword being 'Deregulation'.
Some changes in this direction were afoot before the election, with the Small Business Enterprise and Employment Act 2015 (SBEEA) and the Deregulation Act 2015 receiving Royal assent on 26 March 2015. The SBEEA covers a whole raft of legislative reforms with the intention of reducing regulations which stymie the ability for small businesses to innovate and grow.
The employment provisions of the SBEEA provide among other things, financial penalties for unpaid tribunal awards and settlements, restrictions on exclusivity in zero hours' contracts, an extension to the financial penalty for failure to pay the national minimum wage, and power to restrict the number of times that parties can request postponements in employment tribunal hearings.
We shall have to see if David Cameron's pre-election blandishments come to pass. Below are just some of the promises the Conservative party made in its manifesto.
Zero hours' contracts
The Conservatives have promised to remove exclusivity in zero hours' contracts. SBEEA will insert a new Section 27A into the Employment Rights Act 1996 (which governs a large part of UK employment law) rendering void, any clause in a zero hours' contract which purports to prevent a worker from working for another employer, or doing so without the employer's consent.
Exclusivity has been heavily criticised as giving rise to abuse, since a worker might be held in contractual slavery, given no work by the principal employer, but unable to seek work elsewhere. This is indeed a welcome move.
The Human Rights Act
Less welcome in some quarters, is the indication that the Government will look to replace the Human Rights Act with a British 'Bill of Rights' with a nod to the USA. On the face of it, this might be seen as a radical move, and we are yet to see how the legislature will get around the European Convention on Human Rights which requires Member States to implement basic tenets of human rights law into domestic legislation. Some have regarded the Human Rights Act as a 'Criminal's Charter' and others, as causative of risk aversion among public authorities. It is not clear how a new Bill of Rights might operate in practice, the scope of the constitutional rights it might encompass, or how it might apply to Scotland. Watch this space.
National Minimum wage and Living wage
The Conservative manifesto makes a broad statement that it will increase the National minimum Wage from £6.50 to £6.70 from 1 October 2015 and that it is 'on course' for an £8.00 minimum wage by the end of the decade. The manifesto supports the so-called 'living wage' and continues to encourage businesses and other organisations to pay it whenever they can afford it.
Increasing the pre-tax personal allowance to £12,500 will be a welcome measure to anyone earning less than that amount. This means that by the end of 2020 people who work 38 hours a week on the increased national minimum wage, will no longer pay any income tax at all. The Government pledges to introduce legislation to increase the personal allowance automatically in line with the prevailing national minimum wage.
Work and family
The manifesto outlines the goal of welfare reform to 'reward hard work' and 'protect the vulnerable'. According to its manifesto, the Government will support the population, 'whether we choose to go out to work or stay at home to raise children'. Some may find this a restrictive model but it appears that the rewards are there for those who are able to work. The headline promise is to introduce tax-free childcare to help parents return to work, and to give working parents of three and four year olds, 30 hours of free childcare a week. This is likely to take effect from 2017 and would result in more than 600,000 extra 15-hour free childcare places every year.
The government makes a promise to reduce what it calls the disability employment gap, helping those will a long-term yet treatable condition back to work and providing support for mental health. The Conservative party will also aim to promote full gender equality by requiring companies with more than 250 employees to publish pay differences between male and female employees. Public sector duties are already ahead of the private sector in this regard.
Trade Unions and industrial action
In a nod to Thatcherite sentiments, the Conservative party has indicated that it will make strike action more difficult, introducing a tougher threshold for strike action in key services such as health, transport, fire and education which some may argue is no bad thing. New laws would require a minimum turnout of 40% of all those entitled to take part in strike ballots. The government will also abolish what it describes as 'nonsensical restrictions' which ban employers from using agency workers to cover striking employees.
One of the more meaningful areas of development is the effort made to eradicate exploitation of migrant workers. The Modern Slavery Act 2015 received Royal assent on 26 March 2015. This will enable government agencies to have wider powers to tackle unlawful trafficking, and will introduce a duty on commercial organisations to prepare a slavery and human trafficking statement. Businesses will have to make a commitment to ensure that their supply chains are 'slavery-free'. This comes after high profile cases reaching Supreme Court level where the question of the treatment of vulnerable workers has been considered.
What is not clear from the Conservative manifesto is the Government's intention with regard to access to justice. We have seen a drastic reduction in the number of employment tribunal claims coming through the Employment Tribunal system. This may be the result of a combination of factors, a reduction in the numbers of public sector equal pay claims, employment tribunal fees, but also ACAS early conciliation which can result in settlements before a case reaches the point of no return.
These are challenging times for employers and employees alike as we emerge from recession. We have certainly experienced challenges from a professional perspective as we adapt to the changing employment law landscape. Whatever does come to pass in the next five years, we will continue to encourage proper scrutiny of rights and liabilities by our law makers, and to give clear and sensible advice to our clients.