Employment Law Update (May 2010)
New team takes over Government
With the election result now clear, and a new Conservative –
Liberal Democrat coalition Government installed, employers will be
keen to know what the impact of the change of Government is likely
to mean for them.
Although things will take some time to become clear, one thing
that is certain is that the employment law landscape has changed
and employers will need to get used to a new Government mindset.
Things may become a little clearer once the emergency budget has
been announced, expected by the end of June.
To try and give employers a taster of what changes to expect on
the employment law front, here we take a look back at the
significant changes that happened during the years of the New
Labour Government and review the manifesto commitments made in this
May's election by the Conservatives and Liberal Democrats to see
the shape of what's to come.
The New Labour era – 1997 - 2010
The New Labour Government's three successive terms of office
since 1997 were characterised by a general increase in individual
employee workplace rights. In general, the Government tried to
introduce these in a measured and incremental way, with strong
efforts made to keep employers "on side".
However, it's still worth considering the amount of change
employers have had to get used to over that period. The list of
changes introduced since 1997 include:
- In 1998, the Working Time Regulations introduced statutory
rights to breaks, a maximum 48 hour working week (subject to
opt-out) and four weeks' minimum paid holiday entitlement for all
workers. The future of the U.K.'s "opt-out" is currently under
review by the European Union.
- In 1999, the National Minimum Wage was first introduced.
- The right for employees to be accompanied by a trade union
official at disciplinary and grievance meetings was introduced in
2000.
- Maternity Leave increased from 14 weeks in 2007 to a full year,
with 9 months of it being paid, by 2010.
- The statutory right to union recognition (which applies to
workplaces of 21 employees or over) was introduced in 2000.
- Two weeks' Paternity Leave for fathers was introduced in
2002.
- The right to request flexible working was first introduced in
2003 and now applies to parents of children aged under 17; parents
of disabled children under 18 and others with care
responsibilities.
- New anti-discrimination laws came into force – outlawing
discrimination on the grounds of religion and belief and sexual
orientation in 2003 and age in 2006. Part-time and fixed term
workers also gained equal status with permanent full-time
staff.
- In 2004, statutory disciplinary and grievance procedures were
introduced, only to be repealed and replaced by an updated ACAS
Code of Practice in April 2009.
- In 2008, the right to paid holiday was increased to first to
4.8 weeks in 2007 and then to 5.6 weeks in 2009.
What's on the agenda under the Conservative/Liberal
Democrat coalition
The new Conservative/Liberal Democrat coalition Government will
have to make some decisions about various items of work in progress
before getting underway with more long-term projects. Items
currently in the "in-tray" for the new ministers include:
The Equality Act
The Equality Act, which became law in April 2010, will only be
brought into force when the Government decides to implement it. The
original timetable was for much of the Equality Act to come into
force in October 2010, but this is expected to slip further into
the future owing to the change of Government.
Much of the Equality Act was supported by the Conservatives
while they were in opposition, but controversial parts include:
- The new power which would allow employers to practise positive
discrimination for the first time;
- Equal Pay Audits for larger businesses – the Conservatives'
view is that these should only happen in cases where businesses
have been found by an employment tribunal to be discriminating on
the grounds of gender.
The Vetting and Barring Scheme
The Vetting and Barring Scheme, which applies to people working
with children or vulnerable adults is due to come into full effect
in England and Wales in November 2010.
The Conservative manifesto promised to review the scheme and to
"scale it back to common sense levels", indicating some reduction
in the scope of the scheme. However, so much work has already been
done to make the new system work that it seems unlikely substantial
changes will be introduced at this stage.
However, one area that could be changed quite easily might be to
remove the introduction of work defined as "controlled activities".
Controlled activities are areas of administrative work but
involving some opportunities for contact with children or
vulnerable adults. It is proposed that barred individuals may work
in controlled activities but subject to safeguards.
A review of the scheme has already recommended that controlled
activities should be brought within the scope of "regulated
activities", which would mean barred individuals would not be
permitted to work in them. This change would be straightforward to
implement.
Maternity and Paternity Rights
The extension of maternity and paternity leave entitlements
looks set to continue under the coalition Government.
Regulations have already been put in place by the outgoing
Labour Government that will allow parents of children born after
3rd April 2011 to transfer up to six months' unused
maternity leave from the mother to the father.
The Conservatives' manifesto proposal for "flexible parental
leave" indicates that this proposal is likely to go ahead, although
it is not clear whether, or within what timescale, it might be
extended to cover the full period of maternity leave.
Flexible Working
The Conservatives' long-term ambition, as stated in the
conservative manifesto, is to extend the right to request flexible
working to all. Initially the manifesto suggests the right to
request flexible working will be extended to all parents with a
child aged under 18. Since the current law already extends to
parents with children aged under 17, or disabled children under 18,
such an extension is unlikely to have a significant impact on
employers.
Workplace Pensions
The Labour Government's plans for compulsory occupational
pensions for all employees, with employers contributing 3% of pay,
are likely to be reviewed by the new coalition Government but it
seems likely something similar will be introduced.
National Minimum Wage
Both the Conservatives and the Liberal Democrats have pledged to
retain the National Minimum Wage. Any future increases are
currently decided by an independent body, the Low Pay
Commission.
It is expected the coalition Government will retain the National
Minimum Wage but it seems unlikely that a Liberal Democrat
manifesto promise to uprate the NMW to the adult rate for all
workers (except apprentices) will be seen as a priority.
Retirement Age
The coalition Government has committed to "phase out" the
default retirement age of 65 currently permitted under age
discrimination law.
A Government review is already underway and it is highly likely
that this will result in either the abolition of the default
retirement age altogether or at the very least it being raised
closer to 70 as a first step in a phased removal.
With all of this on the new Government's agenda, there's plenty
to keep us busy here at Mentor. We'll be keeping a close eye on
developments as they happen and we will make sure you're informed
and up-to-date. Remember our Employment Law Team is available 24/7
to give you all the help you need.