What does the short-term hold for UK employment law under a majority Conservative government? A central theme of the Conservative manifesto was that of economic improvement.
In headline campaigning terms, “The Great Recession has given way to a Great Revival”: it spells out certain developments but much remains to be seen as to the effect of the inevitable change of personnel, with the Department of Business, Innovation and Skills (BIS) requiring a new Secretary of State (Sajid Javid) and similarly a new Minister for Employment (Priti Patel) as a result of the election.
This article looks at some of the policy commitments regarding individual and collective employment law and speculates on the potential for further changes, as well as noting certain key aspects where the status quo will now be expected to prevail notwithstanding pressure from the other parties for change during the election campaign.
No material voluntary change should be expected from the government. The absence of a detailed review of the effect of Tribunal fees was highlighted in the campaign (by the former Secretary of State at BIS). This may prove to be necessary as a result of further judicial review challenges by trade unions but the reduction in the volume of claims of circa 70% has been highlighted by Conservative Ministers of State and peers alike as being evidence of the effectiveness of fees in helping to encourage recruitment and removing the fear of small businesses, in particular, of facing claims which may have stifled recruitment.
Trade Union law
There are proposals to provide protections against “disruptive and undemocratic” strike action. Legislation is promised to introduce the following:
- A turnout threshold of 50% of those eligible to vote will be required to sanction lawful industrial action
- In the essential services of health, fire, transport and education a further threshold of at least 40% of all those entitled to take part in the strike ballot as well as the actual majority of those who actually vote, will apply
- Repeal of restrictions on hiring agency staff to provide essential cover during strikes
- A transparent opt-in process for payment of trade union subscriptions
It remains to be seen whether some unions will want to test the government’s resolve ahead of the promised changes, particularly if restrictions on public sector pay remain tight; although the commitment not to introduce regional pay in the public sector may help avoid this.
The manifesto promises to “scrap the Human Rights Act” such that the Supreme Court, via a promised “British Bill of Rights”, will be ultimate arbiter of human rights matters in the UK. This was mentioned amongst the criminal law reform section of the manifesto but given the development of European case law concerning the right to privacy and its impact on the work place, for example, this will be an area to keep under close review.
The Living Wage/Minimum Wage
The Living Wage will be “supported” and employers will be “encouraged” to pay it “whenever they can afford it” but there is no proposal to introduce it to central government departments, for example (which was a Liberal Democrat promise).
The Low Pay Commission’s proposal to raise the minimum wage to £6.70 in October 2015 has been accepted and an aim is expressed to increase it over the course of the Parliament towards £8.00 per hour.
Zero hours contracts
The government very recently introduced The Small Business, Enterprise and Employment Act 2015 (SBEEA) which contains a specific prohibition against the use of exclusivity clauses in ZHCs, i.e. clauses that prevent the worker from seeking additional work elsewhere. In other words, ZHCs are to be regulated as to their effect but not outlawed in their totality. Whether the government will go further than this is yet to be seen but there is no suggestion at the moment that they will.
Again, the theme is one of continued incremental development under the existing regime rather than significant changes. There is continued commitment to “removing barriers that stop women and disabled people from participating in our workforce” but no substantive articulation of how that will be done or indeed what “barriers” will be the focus of action.
The improvements in the gender composition of FTSE-100 boards are noted. Although the EHRC is currently undertaking an inquiry into the recruitment and appointment practices of FTSE-350 listed companies at board level in the context of equality law with a view to identify where improvements are needed to ensure that recruitment practices are fair, transparent and merit-based, the strong implication from the manifesto is that there is no perceived need to legislate for gender quotas.
Echoing 2010’s concept of the Big Society, there is the well-publicised proposal to provide the opportunity for 3 days per year paid leave for volunteering “for people working in large companies and the private sector”.
Pay regulation in Financial Services
There is no suggestion of a reduced focus on this issue as the commitment is made to ensure that “Britain continues to have the toughest regime of bonus deferral and claw-back of any financial centre”. The PRA and FCA continue to work on establishing suitable and workable regimes. This is not the forum for analysis of the detail as that is covered elsewhere but there seems no doubt that this must have received the specific blessing of the Chancellor and which presumably will influence the rigour expected to be applied by the regulators. It will also be interesting to see how the Conservatives react to Brussels’ recent proposal to extend pay regulation (including bonus-capping which the Conservatives opposed in government) across the whole banking sector as well as other European-led executive pay developments; both inside and outside the financial sector.
(One of the more interesting features in the Labour manifesto was a move towards requiring employee representation on listed company remuneration committees: despite the Conservative promise for tough policing of the potential forfeiture of bankers’ bonuses, no wider review of executive pay features in its manifesto.)
The Coalition government made a number of profoundly significant changes to UK employment law: the introduction of Tribunal fees and the reversion to a two year qualifying period for unfair dismissal stand out. These look very unlikely to change and although the Labour party indicated a root and branch review of the structure and level of Tribunal fees there was no indication that the two year qualifying period would be reviewed.
So, arguably the centre ground has already shifted to a more employer-friendly setting. With the exception of the strike ballot proposals, and possibly the ripples of the human rights revisions, the current proposals appear to be variations on an already established theme: it is evolution not revolution. Although revolution may come from the outcome of the promised referendum on membership of the European Union to take place in 2017 given the dramatic impact on UK employment law that would result from a decoupling from mandatory European labour laws.
Aspects of the evolution of UK employment law remain to be determined and from a practical perspective these may well be more important in the short-term. For example, there are significant on-going challenges to find a workable method of operating a practical and effective holiday pay system for many employers; and the government may, finally, provide its previously promised standard whistleblowing policy.
Perhaps a key question is the extent to which the Conservative government will view aspects of current employment law as still contributing to “the burden of regulation” affecting small businesses because the promise is to cut “a further £10 billion of red tape” through the Red Tape Challenge and the One-In-Two-Out rule when it comes to regulations.