Employment Law - Coalition

Employment Law and the Coalition Government

As we know, the General Election in May 2010 failed to deliver a majority mandate for any of the political parties leading to the creation of a Coalition Government of the Conservatives and Liberal Democrats. There are a number of areas where the new Government’s plans are not clear. However, we do now have the document: 'The Coalition: our programme for government' and the Queen’s Speech was delivered on 25 May 2010. With this in mind, and whilst we are currently very short on detail and timings, it does seems an opportune time to at least consider some possible future changes to employment law that might occur under the Coalition.

Default retirement age

The Coalition is committed to phasing out the default retirement age (currently set at 65); we are not currently provided with a date for the change. There will also be a review to set the date at which the state pension age starts to rise to 66, although we know it will not be sooner than 2016 for men and 2020 for women.

Deregulation

The period since 1997, and particularly during the noughties decade, saw a seemingly endless flow of employment regulation, both domestic and European in source, with the aim of creating a fair yet flexible workplace. Whilst the Coalition is likely to retain the vast majority of the employment regulations brought in by Labour, it has indicated that it will stem the future tide by introducing a ‘one-in, one-out’ rule for new regulations, ‘regulatory budgets’ and sunset clauses to give businesses more freedom and greater flexibility.

Employment tribunals

Recent years have seen an escalation of claims going through the tribunal system with a subsequent increase in time and cost for business. Along with a review of the rules of procedure, it is certainly possible that reforms could be implemented providing greater costs penalties to discourage weak or vexatious claims. It is also possible that compulsory mediation would be imposed for certain types of cases, for example, discrimination cases.

Equality and the Equality Act 2010

There was no reference to the Equality Act 2010, which is to be implemented from October 2010, neither in the Government’s programme nor in the recent Queen’s Speech. While the Liberal Democrats broadly welcome the Act, the Conservatives have previously announced an intention to drop some aspects. Indeed, they have previously announced that they would not bring into force the duty on public authorities to tackle ‘socio-economic disadvantage’ and the encouragement of positive action in recruitment and promotion. The Conservatives also oppose compulsory pay audits, proposing that only an adverse tribunal decision against an employer should trigger an audit. The Coalition is, however, committed to “promote equal pay and take a range of measures to end discrimination in the workplace”. This will include proposals to undertake a fair pay review in the public sector and to implement a “20 times” pay multiple (the principle being that the highest paid person in the organisation is not paid more than 20 times the lowest paid) and to promote gender equality on the boards of listed companies. The Coalition is also committed to the retention of the National Minimum Wage.

Europe

The Coalition Government will examine the case for a Sovereignty Bill to enshrine the thus far unwritten principle of parliamentary sovereignty into British law. It will also work to limit the application of the Working Time Directive in the UK. The Government plans to end the so-called “gold plating” of EU legislation when implemented in the UK. This could lead to European Directives having less of a direct impact in this country as would future European Directives. Examples cited by the Conservatives prior to the General Election include: TUPE, Part-time Work Directive, Fixed-term Work Directive and the Agency Workers Regulations; the latter is due to come into force in 2011.

Redundancy

Possible changes to redundancy laws might be introduced that will incentivise employers to find alternative, suitable employment for potentially redundant employees, and also impose a greater onus on the employee to seek redeployment in the company.

TUPE

Under the general commitment to review employment and workplace laws, the Coalition may revoke the ‘service provision changes’ to TUPE legislation that was introduced in 2006 where activities are contracted out, contracted in, or reassigned from one contractor to another. The business argument being that it would take the transaction out of the scope of the law, giving firms more freedom to out-source work and change service providers, although it may well have adverse consequences for the employees.

Work and families

Before the General Election, both the Conservatives and Liberal Democrats promoted the importance of family-friendly policies; David Cameron has previously vowed to make the UK the most family friendly nation in Europe. With this in mind, it is proposed that the Government extend the right to request (not a right to demand) flexible working to all employees following full consultation. It is also likely that there be a new more flexible system introduced for shared parenting including a further extension to parental leave that goes beyond the current regulations.

Generally, the proposed changes appear to be a subtle shift rather than a deliberate overhaul of the current regulatory framework for employment law in this country. There appears to be an emphasis towards greater flexibility for business and a questioning of European influence in domestic employment law. Taken as a whole, it’s probably safe to say that there will be less employment related legislation under the Coalition Government than under the previous administration and, no doubt, some de-regulation as well. However, the future will certainly not be legislation free. Given the perilous state of the nation’s finances, the relevance of all of this will ultimately depend upon how high a priority these issues are on the Government’s political radar. As always, time will tell!