What Will the Election Result Mean for Employment Law?
The snap election is fast-approaching, and many are speculating about the changes to Employment Law that each of the main two parties are committing to. Both have made bold claims with regards to their proposed changes, and should either Labour or Conservative win – each policy could mean that the legislative changes we saw in 2015 could be overwritten. Experts at Taylor Rose give Lawyer monthly the run down.
The Labour Party’s manifesto includes a 20-point plan that the party trust will be end of the ‘rigged economy’. Under the plan, employment tribunal fees will be abolished, providing all employees with equal rights, regardless of the number of working hours that they are contracted to. The £950 fees were introduced in 2013, and ever since unions have called for them to be scrapped, claiming that they had altered the way that workplace disputes were handled, and that low-paid women that were bearing the brunt of the changes.
Labour also plan to ban zero-hour contracts, which rose by 600% after the 2008 financial crisis. This increase, along with the parallel growth of the gig economy drastically changed the face of the modern workforce. It’s no surprise that labour want to ban these contracts, along with unpaid internships; the media has been rife with stories of lazy employers using them to exploit employees, and recent legal judgements support this view. The Liberal Democrat manifesto echoes this sentiment, indicating that they too, plan to end these pieces of employment legislation.
Increases in the living wage has also been promised under a Labour Government; they have yet to commit to a figure but currently the increase stands at “at least” £10 per hour by 2020. This wage would be extended to employees aged 18 and over. They also pledge to end the 1% pay cap on public-sector pay with the addition of making sure that workers receive bonuses that are in line with rising inflation. The current cap is in place until 2020 under Conservative plans – by this time it would’ve been in place for eight years. This has dealt a devastating blow to the NHS as staff leave the sector and workloads increase – a situation that is threatening patient safety.
Organisations within the public sector, and private sector businesses carrying out public sector work, will also find themselves having to comply with the maximum pay ratio of 20:1. Meaning that those in executive positions will not earn more than twenty times the wage of the lowest paid employee.
With regards to pay, under Labour legislation we can also expect to see the introduction of an ‘excessive pay levy’ on annual salaries above £330,000. Firms paying staff more than this figure will be obliged to pay a 2.5% surcharge, that increases to 5% for salaries of £500,000 and over.
The current redundancy model could be reformed under Labour who are offering a review of existing arrangements that are often found to be unclear by around 50% of employers. They are also looking to increase statutory redundancy pay.
With regards to parental leave and wellbeing there are some interesting changes proposed; both Labour and the Liberal Democrats are pushing for an extended period of paid paternity leave, to encourage shared parental responsibilities and perhaps be a positive step towards closing the gender wage gap. There would also be a consultation on the introduction of a statutory bereavement leave period.
But how would Employment Law fair under a Conservative landscape? First off, let’s address wages. The Conservative party has too, vowed to make changes to the national living wage, increasing the figure in line with average earnings by 2022. They are standing by their previous commitment of increasing the rate to 60% of median hourly earnings by 2020, a figure less than the seemingly vague one promised by Labour at £8.75.
Conservative leader Theresa May has claimed that under her party, we will see the biggest expansion of workers’ rights than any of her Conservative Government predecessors. The expansion includes the protection of workers’ pensions from the ‘irresponsible behaviour” that has been previously witnessed. She has also guaranteed that throughout the Brexit negotiations, workers’ rights will remain unaffected, by enacting the Great Repeal Bill, converting EU law into UK law. Whereas Jeremy Corbyn has declared that Labour would replace the Bill with a new EU Rights and Protections Bill, safeguarding employee rights handed over from EU law.
May also stands by her budget pledge with regards to the representation of employees on the boards of listed companies. However, companies will not be required to appoint a specific member of staff to the board, but instead appoint a non-executive director to monitor any concerns from employees.
When it comes to skills and immigration, the Tories have vowed to double the immigration skills charge to £2,000 for companies employing migrant workers, a policy that is perfectly aligned with David Cameron’s previous pledge to cut net migration to tens of thousands. However, a policy that is almost guaranteed de-incentivise firms from employing foreign talent.
When it comes to employee wellbeing, the Conservatives are looking to remove the current requirement that states employees to have suffered from a mental health condition for twelve months before they are protected by the Equality Act. They also want to allow workers the right to a period of a year’s unpaid leave to care for a relative, as well as working to increase the uptake of flexible working environments and shared parental leave as the UK still lags behind the EU in this area.
Of course, once either party is elected, we are yet to see these changes come to fruition quickly, if at all.
