What might the General Election 2015 bring for employers?

Written on 2 Apr 2015

Only a few days in and the general election campaign has already seen some interesting debate around employment law and related areas. Yesterday Labour announced radical proposals on zero hours contracts, whilst the Liberal Democrats repeated their pledge to increase paid paternity leave. Today sees the live debate between seven party leaders. The showdown is for 2 hours from 8pm but with seven speakers jostling to make their pledges heard, any sort of in-depth discussion is unlikely.

We set out below some of the key areas in which the parties are focusing as part of their vision for UK employers post 7 May. No doubt we will hear many more proposals as the election campaign fires up.

Cracking down on rogue employers and the abuse of zero hours contracts

Cracking down on employers who appear to be exploiting workers, particularly the most vulnerable, is an area in which the parties are seeking to win over voters. The current Government has taken steps to tackle this over its past term by naming and shaming employers who fail to pay the national minimum wage (“NMW”) and imposing greater penalties on employers who do not pay the NMW or Employment Tribunal (“ET”) awards. It has also sought to tackle the potential abuse of zero hours contracts by providing for provisions to be brought into force at a future date preventing an employer requiring an individual to work exclusively for that employer. Many of the parties believe that more should be done and it is clear that this is going to be an area of focus during the campaigns.

All the parties seem to be in agreement that ensuring effective enforcement of the NMW is key. Indeed, the Liberal Democrats are looking to increase inspections of employers to check for compliance with employment legislation and are calling for a new workers’ right agency, which would be a one stop shop for the enforcement of workers’ rights, streamliming the work of the NMW enforcement section at HMRC, the enforcement of working time issues at the Health and Safety Executive, the Employment Agency Standards Inspectorate and the Gangmasters Licensing Authority.

Labour also announced yesterday that it intends further to increase protection for those on zero hours contracts, including by introducing new laws requiring that those who work regular hours under such a contract to be entitled to a permanent contract after 12 weeks’ service, and providing for compensation to be paid by an employer when shifts are cancelled on short notice. The Greens and UKIP have also indicated that they will seek to ban exploitative zero hours contracts, with UKIP indicating that “large” employers would be subject to a Code of Conduct requiring them to offer fixed hours to those working on zero hours contracts for more than a year.

A public enquiry into blacklisting in the construction industry is also on the Labour list of promises.

Workers’ wages

The last year has seen fairly constant publicity surrounding workers’ wages – see the “living wage” campaign. Again, the Election is proving a forum for parties to show workers that they are keen to address this issue. Labour has indicated that its “target” is to see the NMW increase to £8 an hour by the end of the next Parliament in 2020, that it will introduce tax breaks for employers who pay a living wage and that there should be an obligation on listed companies to report on whether or not they are paying the living wage. It will seek to promote the living wage through procurement contracts. The Greens are looking to ensure that the NMW increases to at least £10 by 2020 and Plaid Cymru pledge to see all workers receiving the living wage by that date. Meanwhile the Liberal Democrats are focusing on raising the NMW for apprentices, proposing to instruct the Low Pay Commission to consider ways of increasing the NMW generally and requiring a living wage to be paid by all central government departments from April 2016. The SNP is naturally keen to devolve this issue to the Scottish Parliament.

Family friendly

With shared parental leave impacting from next week, all the parties are keen to demonstrate that they are keen supporters of working families. Whichever party or parties come into power as a new Government, employers are likely to see more reform in this area. With the Conservatives looking to bring statutory maternity pay to self-employed mothers, the Liberal Democrats have highlighted their pledge to grant fathers an additional four weeks’ paid paternity leave. Not far behind, Labour has made a promise of increasing paid paternity leave by an additional two weeks. It has also focused on the years following birth, to address the issue of expensive childcare costs by promising working parents up to 25 hours’ a week free childcare for 3 and 4 year olds. No party, though, has gone as far as the Greens in indicating that it would provide for up to 22 months family leave on birth or adoption with each parent taking a minimum of six months leave and with pay at 90% of salary, although this is caveated by being “up to a reasonable level”.

Employment Tribunals

The contentious issue of ET fees is also in play. With the judicial review of the existing ET system still rumbling on (UNISON was granted a further leave to appeal yesterday), Labour, the Liberal Democrats and the SNP have stepped into the arena, promising that the current system will be reviewed. Plaid Cymru has also voiced concerns that the current fees are “far too high”. However, what all these parties are promising for the future is still unclear. Labour indicated yesterday in its workplace manifesto that it would “abolish the Government’s fee system” to make justice fairer for all but we shall need to wait and see whether this really does mean that access to an ET will again be free for all or in fact an alternative fee system will be put in place. Labour has also committed to making the ET system quicker. It will be interesting to see if Labour’s proposed reforms would go so far as the systems in some European countries, where employment disputes reach the courtroom within a relatively short period of time and are then dealt with by the court, sometimes along with three or four other cases within a day.

A European referendum?

Whilst Labour, the SNP and Plaid Cymru all continue to back European membership, the Conservatives, UKIP and Greens are looking for a referendum on whether the UK should stay or go. Whilst supporting European membership the Liberal Democrats have caveated that with support for a referendum if there is a plan for “material transfer of sovereignty” from the UK. What is clear is that should the UK, at some point, no longer be part of the European Union, this will have a significant impact on our employment laws and how they are interpreted and developed going forward.

Indeed, UKIP has stated that it would undertake a review of laws of EU origin with a view to abolishing any laws seen as an obstacle to British “prosperity and competiveness”. This would include repealing the Agency Worker Regulations as well as presumably some reform of our discrimination laws. UKIP is also proposing to introduce a form of work permit system for individuals from other European countries seeking to work in the UK.

Other issues on the political agendas

Other issues on which the parties are focusing include:

  • Strike rules: The Conservatives have announced proposals to change the rules on strike action, including a 50% minimum voting threshold for a strike to be lawful and a new three month time limit after a ballot. Currently a simple majority of those who vote is required.
  • Rights for self-employed workers: The current Government has already launched a review looking at the complex issues surrounding employment status. Should they win the election, Labour has indicated that it would look to introduce measures to ensure equal rights for the self-employed. However, at present it is not clear which existing statutory rights would be extended to self-employed workers or who will be affected.
  • Excessive Pay: Whilst a new provision in the Small Business Enterprise and Employment Act requiring regulations to be introduced within 12 months obliging employers with 250 or more employees to disclose their gender pay issues has now been introduced (see our blog here), issues surrounding excessive pay in the financial services sector and to senior executives in some companies are not likely to quietly go away. Labour has stated that it will “tackle excessive pay packages that are undeserved by requiring companies to publish the ratio of the total pay of their top earner compared to their average employees” and to put employee representatives on remuneration committees to ensure that the views of ordinary staff on top pay are heard.
  • A new British Bill of Rights: Both the Conservatives and UKIP have suggested that they would seek to introduce a new British Bill of Rights to replace the Human Rights Act 1998 with a view to decisions of the European Court of Human Rights becoming advisory only.

We shall provide further updates on the employment pledges being made as the election campaign continues. In the meantime, if you do have any questions or would like any further information on what any of the parties’ proposals might mean for you, please do not hesitate to contact your usual OC Contact.