Just what does the election mean to UK employers?

By Taylors Solicitors

10 Mar 2015

With a date now firmly fixed for the general election - 7 May – and parliament set to be dissolved at the end of this month, what would a new government (or maybe a re-election) mean for the UK’s employers?

By Emma Swan, employment partner at Taylors.

Over the last four years, the coalition has pursued what was a largely pro-business employment law reform agenda, with a number of major changes taking effect in the last few years (and several more about to come into force).

I’m sure many employers and HR professionals would happily welcome an election manifesto without any proposed changes to employment law; it would give them chance to implement and understand some of the changes (some not always necessary!) that have been brought in during recent years, but this is unlikely to happen - employment law unfortunately continues to be a popular political football.

Although it is difficult to predict exactly what may happen after May, the three main parties and UKIP have all published their planned changes to employment law and here’s a summary of the principle changes that they have promised should they be elected into power.

The Conservative Party

The party has proposed several reforms, including introducing a minimum threshold for strike ballots and banning exclusivity clauses in zero hours contracts. A Conservative government would like to make it more difficult for employees to strike; they would like to implement a turnout of a minimum of 40% at a ‘recent ballot’ on the basis that they consider that strikes lack a real mandate where there has been a low turnout or it has been held months before the proposed strike.

Initially, the Conservatives had put forward a minimum of 50%, but critics have been quick to point out that many elections, even Parliamentary ones(!), would fail if that level of turnout was required!

There has been much commentary about the pros and cons of zero hours contracts; the Conservatives remain concerned about rogue employers who abuse staff on zero hours contracts by stopping them from working for others, even if the employer has no work to offer them. We wait to see how this will be changed in practice as many employers and employees still see significant benefits in having the flexibility that zero hours contracts offer.

Labour

Ed Millband’s party has put forward a number of planned changes and seems to be intent on creating further rights. So is this the party for business?!

The changes they intend to make include increasing the national minimum wage to £8 an hour by the end of the next Parliament; requiring companies to publish details of average pay to promote equal pay; increasing free childcare for working parents up to 25 hours per week; abolishing employment tribunal fees (although it seems more likely that a review will take place on the level of fees); reinstating third party harassment under the Equality Act 2010; criminalising the exploitation of migrant works; consulting on improving flexible working for family carers and promoting equal pay.

One change that will be of particular concern to employers is the proposal to ensure equal rights for self-employed individuals. It is unclear whether this means Labour intend to extend ‘employee rights’ to self-employed people, which might have far-reaching implications for how employers structure their businesses.

Currently, self-employed people are covered by discrimination laws provided they are obliged to personally perform the work but any changes wider than this would be a radical change for employers and employees alike.

The Liberal Democrats

Although the Lib Dems have seen their poll ratings drop dramatically since entering the coalition, they remain an influential party with their own plans for employment law changes. They also intend to increase the national minimum wage, but only for apprentices, and propose to extend employee rights, but to workers rather than self-employed people.

In relation to the latter, businesses will be concerned again that this will impact directly on them and make it more expensive to take on new staff. The Department for Business, Innovation and Skills believe that levelling out the rights between employees and workers would be good for employers and suggest that it will reduce employment tribunal cases - this would remain to be seen.

UKIP

And finally, in addition to their mantra that the UK should leave the EU and the red tape of European laws, UKIP has developed some of its own employment law proposals that include introducing a right for those employed on zero hours contracts by “large employers” to be given a fixed hours contract once they have been employed for a year. The party also proposes an exemption to discrimination laws allowing employers to discriminate in favour of a “young unemployed British person”. I’m sure each of you will have opinions as strong as mine on these matters and I’ve tried not to allow my thoughts to impinge on this article, but I’ll leave you with the thought that each parties’ plan still seems to be light in substance at this stage and, as always, the devil will be in the detail when the successful party (or maybe another coalition) takes power.

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