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What the General Election means for Employment Law

What the General Election means for Employment Law

Published: 30 July 2015

Following the General Election, the new Government has set out proposed plans which could affect both Employers and Employees.

The two big Questions are:

  1. Will the Human Rights Act 1998 (1998 Act) remain?
  2. Will the UK remain in the EU?

Human Rights -v- British Bill of Rights

These are political ‘hot potatoes’ for the new Government, but it is doubtful whether the Human Rights Act 1998 will suddenly disappear or be reformed so that much of the protection it offers is lost.

It is notable that no mention of a British Bill of Rights was made in the Queen’s Speech which suggests that there will not be a serious attempt to repeal the Human Rights Act 1998 – for now – at least.

It is likely however that any proposed reforms of the Human Rights Act 1998 would curtail the powers of the European Court of Human Rights and clarify the rights under the European Convention on Human Rights (the Convention).The impact of such changes (should they occur) will be limited if the UK stays in the EU because being a signatory to the Convention, it is a requirement for EU membership to implement the European Convention on Human Rights. As such the primary effects for Employers would likely be limited to certain areas only, such as discrimination and trade union issues.

UK in or out of EU membership

As for the UK remaining in the EU, it may well be that after much ‘banging of drums’, the UK will ultimately gain some assurances from Brussels to stay where it is, as part of the growing European family. After all, as one of the ‘grandparents’ of the EU family it will be almost impossible for the UK to economically to abandon its responsibilities.

All businesses, small, medium or large are, to some extent, concerned about the effect and impact of the UK withdrawing from the EU if a Referendum went in favour of a withdrawal. There would be a devastating impact on businesses in various guises- (witness the chaos at the threat of Greece withdrawing or being kicked out of the EU ‘family group’ in recent weeks).

The government’s proposed timeframe for a referendum is by end of 2017 however a Referendum is expected before December 2017.

But even if there is no Referendum until end of 2017, all businesses should consider the impact on UK businesses that would be caused by a withdrawal from the EU. The businesses most affected will be those that export goods, facilities and services to the EU. Domestic businesses will also have to review their business plans bearing in mind possible price increases, tax increases and loss of commercial opportunities when trading with EU partners. The implications are uncertain but, even if the UK were to withdraw, there are unlikely to be sudden or drastic changes to current laws in the short to medium term. It is likely that we will see a slow and gradual change to rules, regulations and laws between the UK and the EU, through case law and future legislation.

The existing protection for both Employers and Employees would still remain.

Reforming the Trade Unions

The new Government made some references in the Queen’s Speech to proposed changes to strike and trade union laws. It is anticipated that new laws will be drafted to ensure that strikes should only result from a ballot in which at least 50% of the workforce has voted. This would have stopped the recent tube strikes (and the one planned for the first week of August 2015)

The Government is moving towards making it more difficult for strikes to be arranged and held by workers in core and essential public services, like transport and health services. In those sectors, proposed amendments to existing legislation would require the support of at least 40% of all those entitled to take part in the ballot, as well as a majority of those who actually turn out to vote, before a strike is even considered legal.

So there is a tide flowing towards Trade Union reforms and it will be wise for Employers keep a close eye on developments on the shop floor. Employers should follow good employment practices by having and maintaining good employee relationships through joint negotiation mechanisms in the workplace, to avoid any potential industrial discord.

Reducing Paperwork and Creating Jobs

The Government wants to create at least two million new jobs and plans to create a further three million apprenticeships during its time in office. Employers will therefore have the opportunity to take on more apprentices with less paperwork and easier schemes of recruitment.

There will be a new Enterprise Bill that will aim to reduce the cost of red tape by £10 billion through a continuation of the former government's Red Tape Challenge and so-called "one in-two out" rule. Where one new piece of Legislation replaces two old pieces of Legislation in the same area of Law.

The most recent examples include the removal of third-party harassment claims and discrimination questionnaires. This has already had the effect of reducing the number of discrimination claims by employees against employers.

A freeze on rates of income tax, National Insurance contributions and VAT for five years should also assist businesses in achieving the Government’s goal. Extended childcare support should further increase the flexibility of working parents, with pilot programmes for the tax-free provision of 30 hours of childcare per week due to start later in 2015.

Review of Employment Tribunal Fees

On 11 June 2015, the Government announced the start of a review of Employment Tribunal fees and the fee remission scheme. The review will take a wide range of evidence into account and is expected to be completed later this year. The tribunal quarterly statistics for the period January to March 2015 have also been published and show a continuing decline in the number of tribunal claims being received and disposed.

Auto Enrolment for Pensions

Auto-enrolment: Staging dates for small employers started on 1 June 2015

The staging dates for automatic pension enrolment started on 1 June 2015 for Employers with fewer than 50 employees. The overall staging period for this group runs until 1 April 2017. The new Employer duties are being implemented month by month over a five-and-a-half-year staging period that started on 1 October 2012. Larger employers passed their staging dates first. An employer can choose to bring forward its staging date if it wishes.

At a glance Employer auto enrolment duties are:

  • An Employer (once subject to the new duties) is required to automatically enrol an eligible jobholder as an active member of an automatic enrolment scheme with effect from the date the jobholder becomes eligible, unless he is already an active member of the Employer's qualifying scheme or falls within a class of statutory exceptions.
  • An eligible jobholder has the right to opt out of his Employer's scheme if he chooses. The Employer of an eligible jobholder who is auto-enrolled (and does not opt out) must pay mandatory minimum contributions to a defined contribution (DC) scheme or offer a minimum level of benefits in a defined benefit (DB) scheme. A default fund in which a jobholder is enrolled must comply with the statutory cap on charges.
  • Eligible jobholders who have opted out will be automatically re-enrolled every three years.
  • Workers who are not eligible jobholders may have the right to opt into their employer's qualifying scheme or, in some cases, a different scheme.
  • There are detailed provision-of-information requirements that Employers need to comply with.
  • Once it has passed its staging date, an Employer must make regular future assessments of whether its workers are eligible for auto-enrolment or if they need to be told about their right to opt into a scheme.

For advice and information on the above or any specific employment law matter please email Cyril Dennemont, partner or Julian Cox, partner and head of Employment.