Employment law and the new government – what’s on the agenda?

Following on from a general election there is always an anticipated period of change. As one of the most frequent areas of legislative change for businesses, employment law is no different.

Although the re-election of David Cameron will likely create fewer waves than if a labour government had taken power, the prospect of an EU referendum, along with other policies in the Conservative party manifesto, it is anticipated to be an interesting period for employment law. Following the Queen’s speech last month, here are the key areas of change we can expect on the employment law agenda over the coming months and years. We have already seen some changes come into effect since the majority Conservative government took power in the form of a small number of reforms from the Small Business, Enterprise and Employment Act 2015, which was passed in March. These include a ban on exclusivity on zero hours contracts, which aims to prevent those employed under such terms from seeking and working hours for other employers. In addition, an increase in the maximum penalty for underpayment of the national minimum wage has also come into force, drastically increasing the liability for employers who fail to pay employees under National Minimum Wage laws. There are some positive changes for employees so far as taxation is concerned; a tax-free minimum wage will be introduced to ensure that someone working 30 hours on the minimum wage won’t pay income tax. The government has also pledged to bring in a further increase to the personal allowance, which will gradually increase earnings exempt from income tax calculation, to reach £12,500 by 2020. There is good news for employers also as the government have announced a freeze on income tax, VAT and NICs rates. One of the headline changes will affect trade unions in the health, education, fire and transport sectors who wish to undertake industrial action. Going forward, a 50% turnout threshold will be necessary for a strike ballot to take place and in certain essential public services, 40% of all union members will need to vote in favour of industrial action for it to go ahead. An interesting change on the horizon is the introduction of private sector equal pay reporting regulations. There has been a commitment to bring in these regulations, which will require all private sector companies over 250 employees to publish the difference between the average pay of their male and female employees, no later than 26 March 2016. It has also been announced that the government will bring in a new Enterprise Bill to attempt to further tackle the red tape businesses face. Details of such legislation have been mooted; with some speculating that micro businesses will become unburdened by certain employment legislation; however details on the contents of the bill are yet to be confirmed. As the above demonstrates, employment legislation is set to be as changeable as ever over the coming years. We will of course continue to keep you up to date with all of the changes and how they might affect your business.