CWS 3.0: December 10, 2014

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What the 2015 UK elections might mean for employers

Since 2010, the coalition government between the Conservatives and Liberal Democrats has embarked on an ongoing employment law review aimed at achieving a labor market “that is:

  • Flexible - encouraging job creation and making it easy to stay in, and find work;
  • Effective - enabling employers to manage staff productively; and
  • Fair - employers competing on a level playing field and workers benefiting from core employment protections.”

By and large, the reforms to date have been employer-friendly. For example, the qualification period before employees can claim compensation for unfair dismissal was increased from one to two years for those employed after April 2012.

Also, measures have been taken to reduce the numbers of tribunal claims. Since the introduction of Employment Tribunal fees in July 2013 the number of single claims received by tribunals April-June 2014 dropped by 70 percent from the year-ago period to 3792; and since the introduction of early conciliation in April 2014, claims are a third lower than the previous quarter.

Reforms have also extended family friendly rights with the introduction of shared parental leave and the extension of the right to request flexible working.

What Is Still to Come?

There are more reforms in the pipeline ahead of the May elections.

Employment Agencies Act. We anticipate the second-stage consultation on draft amended regulations to replace the Employment Agencies Act (EAA) and Conduct Regulations 2003. Rather than amend the bill, the Department for Business, Innovation and Skills has decided to amend the Conduct Regulations, reducing the burden on business and focusing on areas where work-seekers are most at risk of exploitation. The draft regulations are still with ministers but when they are published there will be a further three-month consultation on the draft wording before they are brought into force.

Zero hours contract. The much-publicized ban on exclusivity in zero hours contracts is included in the Small Business Enterprise and Employment Bill, which is going through Parliament. It had its first reading in the House of Lords on the November 19, and is due to be considered in detail in January 2015.

In the bill, a zero hours contract is defined as:

a contract of employment or worker’s contract under which an undertaking to perform work or services is conditional on the employer making work available; but there is no certainty that work will be available”.

The proposal makes any provision of such a contract that prohibits the worker from doing work under another contract, without the employer’s consent, unenforceable.

Employment status review. The government has also launched a wide-ranging review of employment status. The spotlight on zero hours contracts has revealed 1 million people are on workers’ contracts rather than employment contracts, with fewer rights and less security as a result.

The review of employees, workers and the self-employed could result in the extension of employment rights, greater transparency and clarity in employment relationships, and improved stability. Officials expect to present interim findings by the end of the year with recommendations to ministers by March 2015.

But given there are now just five months to go before the election on May 7,  and the fact that Parliament will be dissolved on March 30 2015 to allow the political parties to conduct their campaigns, it is highly unlikely we will see much progress in relation to these proposals before the UK electorate goes to the polls.

Political Promises

Over the last couple of months each of the major political parties has made statements during their annual round of party conferences about what they will do in relation to employment law if they are elected.

All of the political parties have taken a stand against zero hours contracts. The Labour Party has suggested that any worker engaged on such a contract with a single employer for more than 12 weeks should have the automatic right to a full-time contract based on the average time worked over that period. The UK Independence Party, which has enjoyed a wave of popularity in recent by-elections, has announced they would devise a code of conduct under which large employers would have a duty to offer contractual fixed hours to those engaged on a zero hours contract for a year.

Both Labour and Liberal Democrats want to extend employment rights to a greater proportion of the workforce. Currently, workers are not entitled to rights which include a right to notice, unfair dismissal protection, statutory redundancy pay, Transfer of Employment protection, the right to return to the same or a similar job following statutory leave and the right to request flexible working. Extending these rights to workers would have significant implications for employers in terms of how they decide to structure their workforce, as well as increased employment costs and potentially more tribunal claims.

Labour Democrats have pledged to overhaul the employment tribunal system.  It is likely this would entail the abolition of some or all fees having announced that “affordability should not be a barrier to workplace justice.” They are also keen on extending diversity monitoring to include social backgrounds as well as gender, race, disability and sexuality, though it is unclear how they would expect employers to do this. They want large companies to publish average pay figures to highlight any differences in pay; and have left open the possibility of quotas for women on boards.

We can expect the Conservatives to continue their reforms, though without a coalition partner, this is likely to be more pro-business than hitherto. Of note is their intention to replace the Human Rights Act with a British Bill of Rights and downgrade European court rulings to “advisory status.” The impact of such a move is hotly debated.

Finally, while it is unlikely the UK Independence Party will gain a majority, they propose reviewing all legislation and regulations originating from the EU (3,600 new laws since 2010) and removing those which hamper British prosperity and competitiveness.

The unions should also not be forgotten in the context of employment law, with UCATT and Unite campaigning increasingly vigorously on the issue of false self-employment and putting an end to what they call the “Umbrella company con-trick.”