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With the general election just over two weeks away, we take a look at the potential impact on employment law.

 

Party manifestos have been published, politicians have been hot on the campaign trail, pledges are being made and televised debates are taking place (for some anyway). This means we can get a pretty good idea of what’s to come in the world of employment law. The bookies have the Tories as clear favourites however, since the bookies also had a certain Mrs Clinton as favourite in the US election and ‘remain’ was odds on for the European Union referendum last year (we don’t need to remind you what happened there), we think it is worth considering some of the key employment pledges of each of the main parties.

Employment rights

Theresa May has promised what she says would be the biggest expansion of workers’ rights by any Conservative government, if her party were to retain power. May also promised to keep all workers’ rights currently guaranteed by European Union law. Labour were less than convinced by this apparent attempt to appeal to their voters, saying that Mrs May was “taking working people for fools”.

However, Mrs May has pledged new protections for “working people”, particularly in the so-called ‘gig economy’. Temporary and self-employed workers should expect to benefit from new rights following the outcome of the inquiry set up under Mathew Taylor, however, there are no details about what these rights may be. Labour’s manifesto trumps May’s pledges in this area, with a ‘20-point plan’ which includes giving every worker, whether part-time or full-time, temporary or permanent, “equal rights from day one”. The plan also includes an outright ban on the much criticised ‘zero-hours’ contracts, as well as unpaid internships. The Liberal Democrats propose giving workers on zero-hours contracts the right to ask for a “fixed contract” after a certain period.

Both the Liberal Democrats and Labour also plan to abolish the controversial employment tribunal fees. This will be welcome news for workers… and employment lawyers.

The Tories have vowed a change in the law to ensure representation for workers on the boards of large companies, who will be required to either: nominate a director from the workforce, create a formal employee advisory council or assign specific responsibility for employee representation to a designated non-executive director. This has been criticised as a watering down of an earlier pledge by Theresa May, since companies would not be forced to have employees in the boardroom. The Liberal Democrats also propose greater worker representation at board level; “there would be greater representation of employees on boards… with the potential for a German-style, two-tier board structure to include employee representatives”. In addition, they “would push current targets on female board representation even higher, with a view to having 40% board representation for women by 2025”.

The Conservatives have also proposed an extension to the scope of disability discrimination protection under the Equality Act 2010 for those suffering from mental health conditions. Currently, in order to meet the disability definition, a mental impairment must have a “long-term” effect, which means it must have lasted for, or be expected to last, at least 12 months. Health Secretary, Jeremy Hunt, said that the Conservatives would remove this requirement, meaning individuals would benefit from immediate protection. It is not clear how this will operate in practice. It may be that specific provision would be introduced to include certain mental health conditions as ‘deemed disabilities’.

Labour want to introduce four new Bank Holidays in addition to the current statutory minimum of 28 days. Their ‘20-point plan’ states; “we’ll bring our country together with new holidays to mark our four national patron saints’ days, so that workers in Britain get the same proper breaks as in other countries”. The new bank holidays would be; St George’s Day (23 April), St David’s Day (1 March), St Andrew’s Day (30 November) and St Patrick’s Day (17 March).

Family-friendly rights

The Conservatives have promised a statutory right to a year’s unpaid leave to care for a family member. Currently, 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. A similar right to that proposed by the Tories already exists in the Republic of Ireland. This pledge comes amid mounting concern around the scale of the social care crisis; with reportedly more than six million people acting as unpaid carers, a third of them spending over 50 hours a week looking after a family member. The new right would operate in a similar way to statutory maternity leave, in that the employee would be guaranteed their job after a period of leave. However, the fact that the leave would be unpaid raises the question of how many would actually use such a right, or how many could afford to.

Under their ‘20-point plan’, Labour have promised to “double paid paternity leave to four weeks and increase paternity pay – because fathers are parents too and deserve to spend more time with their new babies”. The Liberal Democrats also propose to expand parental leave rights, under which fathers would get “use it or lose it” statutory months’ shared parental leave right. Currently, eligible employees are entitled to take either one whole week or two consecutive weeks’ paternity leave within 56 days of a child's birth or placement for adoption.

Labour have pledged to extend the period of Statutory Maternity Pay (SMP) to 12 months. Currently, SMP is payable for up to a maximum of 39 weeks.

Pay

The Tories have vowed to increase the so-called ‘National Living Wage’ (NLW), which is currently £7.50 and is applicable to all workers aged 25 and over, to 60% of median earnings by 2020 (which would be around £8.75). There is no mention of any such increase to the ‘National Minimum Wage’ (NMW). The Liberal Democrats have said they will launch a “living wage review” into what should constitute a “genuine living wage”. In addition, party leader, Tim Farron, has previously supported a £10 NMW rate. Labour would “crack down” on employers that refuse to pay the NMW by increasing the number of prosecutions. The party have also promised to ensure that “no one in work gets poverty pay”, by raising the NMW to the level of the NLW, which it expects to be at least £10 per hour by 2020. The Green Party similarly pledges the introduction of a NMW of £10 by 2020, which is said to be a “necessary step towards tackling inequality and poverty”.

The Liberal Democrats also propose to extend pay gap reporting requirements. The Equality Act 2010 (Gender Pay Gap Reporting) Regulations 2017, which came into force last month, require employers with 250 or more employees to publish gender pay gap information. The Liberal Democrats would also require the publishing of data on ethnicity and sexual orientation pay gaps, as well as employment levels and pay gaps between the highest and lowest paid. The Tories have also said they would also extend the remit of pay gap reporting, with their manifesto stating that a new mandatory reporting requirement would be introduced for large employers on the “race gap”. Labour have said they will close the “ethnicity pay gap” by introducing equal pay audit requirements on large employers.

Business immigration

The Tories plan to make it even more costly to sponsor migrants under Tier 2 of the ‘points-based’ system. Regular readers of our Stronachs Insights will recall that only last month a new ‘Immigration Skills Charge’ was introduced, which means small or charitable businesses wishing to sponsor a worker will be required to pay £364, while medium or large employers (being those with an annual turnover of over £10.2 million and more than 50 employees) will have to pay £1,000. The charge is payable upfront in respect of each year of the visa or ‘leave to remain’ required for the migrant. If the Conservatives win the election, the charge for medium or large employers will double to £2,000 per year. This is likely to be unpopular with businesses across all sectors of the economy who depend on non-EU labour. It is said that the revenue generated will be invested in higher level skills training for workers in the UK. The Tory Manifesto provides no details at all on what the post-Brexit immigration system will look like for EU workers seeking to come to the UK.

Labour’s manifesto does not contain any such pledges on business immigration. However, the party has outlined its vision for immigration controls post-Brexit, suggesting that freedom of movement will end, but migration could be controlled by a “tailored mix” of work permits, visas and employer sponsorship. The Liberal Democrats are committed to preserving freedom of movement.

We will be keeping a close eye on further developments up to Election Day, on 8 June.

Rowan Alexander, Solicitor

 

Chambers UK 2106

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