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Employment Law: What can we expect from this government?

Jun 8, 2015

Author: Anthony Purvis

The first Queen’s Speech of the majority Conservative government was delivered two weeks ago. In this blog we are taking stock of what it is likely to mean for employment law.

Before we start on the detail, it is worth noting that the previous Conservative-led coalition made several significant changes to the landscape for employers. The qualifying period for unfair dismissal rights was doubled to two years, Employment Tribunal fees were introduced, the right to request flexible working was extended and everyone is getting used to Shared Parental Leave and mandatory ACAS Early Conciliation. On this basis, we expect that the next five years will be less hectic, but as with any year in employment law, there will be changes!

Membership of the EU

Perhaps of the most significance is the proposal to have a referendum on EU membership by the end of 2017. So much of employment law is derived from EU law and yet this point has been relatively absent from the debate on membership. All UK employees are entitled to 5.6 weeks holiday each year, of which 4 weeks is afforded to them by EU law. Could leaving the EU mean that everyone has less than two weeks holiday each year? Probably not but the point is that a lot of UK citizens take for granted some rights which are present (at least in part) thanks to EU membership. We expect this topic to be debated ever more fiercely as we get closer to a possible referendum. If you’re a business owner or employee and you have any strong opinions for or against, do let us know.

National Insurance

We are told that there will be legislation to ensure that there are no rises in income tax rates and National Insurance contributions for employees and employers for the next five years (as well as VAT).

Enterprise Bill

This bill will reduce regulation on small businesses to help create more jobs. As set out above, the government has undertaken a fairly comprehensive “Red Tape Challenge” over the past five years. We are told this will continue by aiming to cut a further £10 billion of red tape. In addition, there will be a Small Business Conciliation Service which will aim to settle disputes between small and large businesses, particularly in relation to late payment.

Immigration

The government says that it will introduce new measures to deter illegal working, including making it a criminal offence, so that wages paid to illegal migrants can be seized as proceeds of crime. As always, employers should be checking the right to work of all new recruits in order to avoid penalties. Bear in mind that you can be fined up to £20,000 for each illegal worker so you should always ask to see everyone’s passport and/or proof of their right to work.

Strike Laws

We understand that the government intends to make a strike unlawful unless 40% of all eligible members vote in favour of industrial action.

Childcare

A new bill will increase the provision of free childcare for eligible working parents of children aged three and four years old to 30 hours a week (for 38 weeks of the year). This should help employees and employers alike to balance the needs of business and family.

Employment Tribunal Fees

Our view is that in light of the Conservative majority, fees are here to stay, despite concerns about access to justice from both trade unions and business. We understand that recently Shailesh Vara MP has said that the government “is currently considering the options for a review of employment tribunal fees“. In June 2014 the government announced a review of the impact felt by fees but this is yet to take place. We are also waiting on the outcome of Unison’s appeal against its unsuccessful application for judicial review of the fees regime, which will take place this month.

Employee Shareholders

Finally, there appear to be no plans to reform or remove the concept of Employee Shareholders. This was introduced in 2013 and provides that employees may forfeit certain rights in return for at least £2,000 of shares in their employer’s business. There had been concerns that a Labour government would abolish this arrangement and so we saw several businesses rushing to enter into Employee Shareholder agreements before election night. The Conservative government is unlikely to repeal this type of employment status and we will continue to advise on it.

Conclusion

At the moment, there don’t appear to be any plans which will have a significant impact on the day to day HR issues faced by our clients. If it looked likely that the fees regime might change or we had any detail of the employment provisions in the Enterprise Bill, then we might be saying otherwise. For now there do not appear to be any changes of a similar significance to the 2012 extension of the unfair dismissal qualifying period or ACAS Early Conciliation. However, it was Harold Wilson that said a week is a long time in politics. Five years is even longer and employment law can change very quickly.

If you would like to discuss any of the issues raised in this blog, please contact us on 020 7234 0200 or employment@waterfront.law