Post election - potential employment law reforms
Conservative party reforms
Taylor Review recommendations
The Conservative party manifesto states that they will build on existing employment law with measures that protect those in low- paid work and the gig economy. Examples include:
- The creation of a single enforcement body and a crackdown on any employer abusing employment law, whether by taking workers’ tips or refusing them sick pay.
- Ensuring that workers have the right to request a more predictable contract and other reasonable protections.
- Encouraging flexible working and consulting on making it the default unless employers have good reasons not to.
- Legislating to allow parents to take extended leave for neonatal care. Considering ways to make it easier for fathers to take paternity leave.
For more information on the Good Work Plan which set out the Conservative government's proposals following the Taylor Review, Emplaw has published an updated article explaining the plan and progress so far.
The Conservative Party proposes an ‘Australian style’ points-based immigration system, post Brexit, ending free movement from European countries and with a focus on attracting skilled immigrants and filling vacancies in the UK. The system will include:
- Bespoke visa schemes for new migrants who will fill shortages in public services including a NHS Visa and active recruitment of leaders in their fields in, for example, technology and science.
- A student visa scheme to help universities attract talented students and to allow those students to stay on to apply for work in the UK after they graduate.
- A start-up visa to attract entrepreneurs who want to start businesses in the UK.
Family friendly rights
- Extending the entitlement to leave for unpaid carers, the majority of whom are women, to a week. Funding more high-quality childcare before and after school and during the holidays.
- A commitment not to raise the rates of income tax, National Insurance or VAT.
- A commitment not only to freeze taxes, but to cut them. The National Insurance threshold will be raised to £9,500 in 2020. The aim is to ensure that the first £12,500 earned is completely free of tax.
Controversially, the government will require that a minimum service operates during transport strikes.
National Skills Fund
The government proposes to create a new National Skills Fund worth £3 billion over the next Parliament. This fund will provide matching funding for individuals and SMEs for high-quality education and training.
The government states that it will improve incentives to attack the problem of excessive executive pay and rewards for failure.
The government states that it will improve the working of the apprenticeship levy.
Proposals outside the manifesto
The current government has previously made statements to the effect that it will preserve workers’ rights established under EU law. However, recent changes to the Withdrawal Agreement have been suggested by some to be a threat to EU rights.
Other employment-related initiatives announced prior to the publication of the manifesto include:
- Greater transparency over terms of engagement through compulsory written statements for workers
- Tighter controls over the tax status for workers through the extension of the IR35 rules
- Improved written information for agency workers and the scrapping of pay between assignment contracts.
Longer term proposals include:
- A new target for the national living wage of two-thirds of median earnings and reduce the age threshold to 21, both by 2024
- Curbing the use of confidentiality and non-disclosure agreements
- Greater onus upon employers to prevent harassment
- A right to request fixed hours
- Wider access to workplace modifications for those with health issues
- Ethnicity pay gap reporting, building on the gender pay gap regulations
Labour party reforms
The Labour Party intends significant employment law change, building on their 2017 manifesto.
Wages and employment rights
- Introduction of a Real Living Wage of at least £10 ph for all workers aged 16 or over
- Consideration of other ways to tackle low pay, including a Universal Basic Income
- Establishment of a Ministry for Employment Rights
- Full employment rights to everyone from day one on the job
- Strengthening of protections for whistleblowers and rights against unfair dismissal for all workers, with extra protections for pregnant women, those going through the menopause and terminally ill workers
- Ending bogus self-employment and creating a single status of ‘worker’ for everyone apart from those genuinely self-employed in business on their own account
- Banning zero-hour contracts and strengthening the law so that those who work regular hours for more than 12 weeks will have a right to a regular contract, reflecting those hours
- Increasing protection against redundancy
- Giving statutory rights to equalities representatives
- Setting up a Royal Commission to bring health (including mental health) and safety legislation up to date
- Banning unpaid internships
- Introducing four new bank holidays celebrating four patron saints’ days
- Allowing the apprenticeship levy to be used for a wider range of accredited training
- Requiring breaks during shifts to be paid
- Requiring cancelled shifts to be paid and proper notice for changes
- Reducing average full-time weekly working hours to 32 across the economy, with no loss of pay, funded by productivity increases
- Ending the opt-out provision for the EU Working Time Directive and enforcing working-time regulations
- Setting up an independent Working Time Commission to advise on raising minimum holiday entitlements and reducing maximum weekly working time
- Mandating bargaining councils to negotiate reductions in working time
- Keeping restrictions on Sunday trading in place and review unpaid overtime
Flexible working and family friendly rights
- Giving all workers the right to work flexibly
- Extending statutory maternity pay from nine to 12 months
- Doubling paternity leave from two weeks to four and increasing statutory paternity pay
- Introducing statutory bereavement leave, guaranteeing workers time off to grieve the loss of close family members or following miscarriage
- Reviewing family-friendly employment rights, including rights to respond to family emergencies
- Increasing paid maternity leave from nine to 12 months, doubling paternity leave to four weeks and extending pregnancy protection. Banning the dismissal of pregnant women without the prior approval of the inspectorate
- Transforming the workplace and requiring all large employers to have flexible working, including a menopause policy, and consider changes to sickness and absence practices
- Requiring employers to devise and implement plans to eradicate the gender pay gap – and pay inequalities underpinned by race and/or disability – or face fines
- Taking action to close the gender pay gap by 2030
- Delivering gender pay equality by making the state responsible for enforcing equal pay legislation for the first time. The new Workers’ Protection Agency working with HMRC to ensure that employers take equal pay seriously and take positive action to close the gender pay gap
- Requiring all employers with over 250 employees to obtain government certification on gender equality or face further auditing and fines. By the end of 2020, the threshold will be lowered to workplaces with 50 employees
Unions and collective rights
- Removing restrictions on trade unions
- Removing restrictions on industrial action
- Strengthening and enforcing trade unions’ right of entry to workplaces to organise, meet and represent their members and to recruit
- Banning ‘union-busting’, strengthening protection of trade union representatives against unfair dismissal and union members from intimidation, harassment, threats and blacklisting
- Repealing anti-trade union legislation including the Trade Union Act 2016 and create new rights and freedoms for trade unions
- Simplifying the law around union recognition
- Giving union reps adequate time off for union duties
- Increasing wages through sectoral collective bargaining
- Introducing a legal right to collective consultation on the implementation of new technology in workplaces
- The introduction of sectoral collective bargaining by establishing councils of worker and employee representatives that ‘negotiate collective agreements with minimum terms, conditions and standards for the whole of the sector and guarantee a legal minimum for every employer in the sector’ including pay and working hours
- Repealing the Trade Union Act 2016. The Act introduced new industrial action ballot thresholds, tightened the supervision of picketing, provided for longer advance notice of strikes and the re-balloting of ongoing disputes
- Introduction of electronic and workplace ballots
- Giving trade unions the right of entry to workplaces and strengthening the protection of trade unions and their representatives
Workers on boards and other worker rights
- Requiring one-third of boards to be reserved for elected worker-directors and giving them more control over executive pay
- Requiring large companies to set up Inclusive Ownership Funds. Up to 10% of a company will be owned collectively by employees, with dividend payments distributed equally among all, capped at £500 pa, the rest being used to top up the Climate Apprenticeship Fund
- Enabling positive action for recruitment to roles where employers can justify the need for more diversity and introducing a right for all workers to request flexibility over their hours from the first day of employment
- Extending pay-gap reporting to BAME groups and tackle pay discrimination on the basis of race
- Ending disability discrimination and updating the Equality Act to introduce new specific duties including disability leave, paid and recorded separately from sick leave
- Recommending that the Equality and Human Rights Commission prepare a specific code of practice on reasonable adjustments to supplement existing codes
- Requiring employers to maintain workplaces free of harassment, including harassment by third parties
Other recent Labour announcements included proposals to:
- 5% ‘excessive pay levy’. Companies would charge companies a 2.5% levy on earnings above £330,000 and 5% above £500,000
- McDonnell has stated that a labour government would ban private companies from bidding for government contracts if the pay ratio between their lowest and highest employee was more than 20:1
- Set a maximum pay ratio of 20:1 in the public sector
- Increase protection against unfair dismissal and redundancies, with a focus on rights for pregnant women
- Maintain a ‘managed migration’ system.
Liberal Democrat Party Reforms
The focus of the Liberal Democrat campaign has been on stopping Brexit which would preserve free movement.
- Development of the skilled workforce by introducing a new two-year visa for students to work after graduation and a major expansion of high-quality apprenticeships including higher apprenticeships
- Requiring all government agencies and contractors and companies with more than 250 employees to sign up to the prompt payment code
- Expansion of the rights and benefits available to those in insecure forms of employment, such as offering parental leave and pay to the self-employed
- Encouraging employers to promote employee ownership by giving staff in listed companies with more than 250 employees a right to request shares, to be held in trust for the benefit of employees
- Strengthening worker representation in decision-making, including staff representation on remuneration committees and requiring all UK-listed companies and all private companies with more than 250 employees to have at least one employee representative on their boards with the same legal duties and responsibilities as other directors
- Requiring binding and public votes of shareholders on executive pay policies
- Establishing an independent review to consult on how to set a genuine Living Wage across all sectors. The Living Wage would be paid in all central government departments and their agencies, and encourage other public sector employers to do likewise.
- Establishing a powerful new Worker Protection Enforcement Authority to protect those in precarious work.
- Change the law so that flexible working is open to all from day one in the job, with employers required to advertise jobs accordingly, unless there are significant business reasons why that is not possible.
- Modernise employment rights to make them fit for the age of the ‘gig economy’, including by:
- Establishing a new ‘dependent contractor’ employment status in between employment and self-employment, with entitlements to basic rights such as minimum earnings levels, sick pay and holiday entitlement.
- Reviewing the tax and National Insurance status of employees, dependent contractors and freelancers to ensure fair and comparable treatment.
- Setting a 20 per cent higher minimum wage for people on zero-hour contracts at times of normal demand to compensate them for the uncertainty of fluctuating hours of work.
- Giving a right to request a fixed-hours contract after 12 months for ‘zero hours’ and agency workers, not to be unreasonably refused.
- Reviewing rules concerning pensions so that those in the gig economy don’t lose out, and portability between roles is protected.
- Shifting the burden of proof in employment tribunals regarding employment status from individual to employer
- Strengthen the ability of unions to represent workers effectively in the modern economy, including a right of access to workplaces.
- Large companies to be required to publish their parental leave policies; shared parental leave to become a day one right; an additional four weeks of use-it-or-leave-it paternity leave
- 35 hours a week free childcare from when the baby turns nine months old
- A £10,000 grant to every adult, payable in instalments over a 30 year period which would be added to a ‘skills wallet’ to pay for approved education and training courses. This would be introduced in 2021/22.The government would put in £4,000 at age 25, £3,000 at age 40 and £3,000 at age 55. Individuals, their employers and local government will be able to make additional payments into the wallets.
- Expand the apprenticeship levy into a wider ‘Skills and Training Levy’ to help prepare the UK’s workforce for the economic challenges ahead with 25 per cent of the funds raised by the levy going into a ‘Social Mobility Fund’ targeted at areas with the greatest skill needs.
- A 20% higher minimum wage for zero hours workers at times of normal demand to compensate for the uncertainty of fluctuating working hours
- Tax incentives to encourage businesses to employ ex-offenders.