Andrew Masters, Partner and Head of Employment at leading South East law firm Furley Page explains how last week’s election result is likely to impact on UK employers.
As the Conservative Party, propped up with voting support from Northern Ireland’s DUP, press on with the business of government, employers and HR professionals will be wondering what lies ahead and what changes are likely to impact on them.
The challenging political situation means uncertainty for employers as the minority Government juggles with implementing new domestic legislation, while also embroiled in Brexit talks. Andrew presents a summary of some of the emerging employment issues:
EU rights guaranteed post-Brexit
The Government confirmed in the Brexit White Paper in February 2017 that it will introduce The Great Repeal Bill. This will apply from the point the UK leaves the EU and will repeal the European Communities Act 1972 and make all existing legislation currently derived from the EU freestanding as domestic law. This is a holding measure with current EU-derived rights being cut and pasted into domestic law until a decision is made whether to retain, amend or abolish them.
The direction of travel for the short to medium term suggests protection of EU-derived employment rights following Brexit with some possible enhanced rights for workers. It’s clear that securing the status of, and providing certainty to, EU nationals already in the UKand to UK nationals in the EU, is an early priority for the Brexit talks.
Employment status and the gig economy
A review is considering the extent to which modern business practices and the growth of non-standard forms of employment mean that individuals lose out on key employment rights, and whether the current definitions of employment status need to be updated to reflect new forms of working. This holds out the prospect of rights being extended to the self-employed (including workers in the ‘gig economy’) and those on zero-hours contracts.
National Living Wage
The National Living Wage applies to workers aged 25 and over (currently £7.50ph). The Government pledged to continue to increase it in line with the current target, which is for the rate to reach 60% of median earnings by 2020 and then by the rate of median earnings.
Worker representation on boards
The Conservative manifesto confirmed the intention to put workers on the boards of publicly listed companies (not privately owned businesses). Listed companies would nominate a board director from the workforce, or create a formal employee advisory council, or assign specific responsibility for employee representation to a non-executive director. By giving options to listed companies, the concept of workers appointed to the board has been watered down as many will adopt the second or third option, which is likely to reduce the effectiveness of the measure.
Employees will be given unspecified additional rights to information about the future direction of listed companies. There are also moves to curb executive pay by making executive pay packages subject to annual votes by shareholders.
Right to time off to care for sick relatives
A new statutory right to unpaid time off would be available for workers whose family members require full-time care. This would allow workers to take between 13 and 52 weeks off work, while retaining their employment rights and allowing a return to the same job at the end of the period. At present, the statutory right to time off for dependants only allows employees to take short periods of time off to deal with emergencies, or unexpected incidents. The right does not currently extend to the provision of longer-term care. It is also proposed that there be a new right to child bereavement leave.
Closing the gender pay gap and the ‘race gap’
The Government intends to extend the remit of mandatory gender pay reporting following the implementation in April 2017 of gender pay reporting for employers with 250-plus staff. This proposal may require larger employers to publish additional data on the pay gap between men and women. It is also proposed that larger employers publish information on pay for people from different ethnic backgrounds as part of a plan to tackle the ‘race gap’.
Additional measures proposed
There will be a right to request unpaid leave for training for all employees irrespective of the size of the business. However, the only obligation on employers would be to ‘consider’ such applications. There will be an extension of the Equality Act 2010 to provide more protection for those with intermittent mental health conditions, such as depression and anxiety.
There are measures to protect workers’ pensions by giving new rules to the Pensions Regulator to prevent ‘irresponsible behaviour’. Powers will be given to review the implication for pension funds of takeover proposals and to impose additional fines.
There will be ‘returnships’ following a return to the workplace after taking time out to look after children or to support an elderly relative, designed to make it easier to get back into the workplace. It is also proposed to introduce 30 hours of free childcare for working parents of 3 and 4 year olds.
“There is limited detail on many of these proposals. Notwithstanding Theresa May’s pledge to increase workers’ rights, there’s also no commitment to reverse the decision to implement fees at the Employment Tribunal, which has led to a reduced number of claims being brought, making it harder for workers to enforce legal rights.
“The prevailing political situation, including the lack of a parliamentary majority and the pressure of the Brexit talks, does leave employment law developments hanging in the air, raising significant questions as to which proposals from its manifesto the Government will be able to implement. We will need to follow developments very closely,” he adds.
Furley Page’s expertise in employment law is recognised by the independent legal guides Chambers UK and The Legal 500. Andrew is personally Top Ranked (Band 1) in Chambers UK for his expertise in employment law and HR related matters.