18/05/2015

By Su Apps, Associate at Ashfords LLP

Following months of campaigning, we now know the identity of our new government. So, will a majority Conservative government, unhampered by the restraints of the previous coalition, bring about significant changes in the world of employment law?

Based on their manifesto pledges, here are the key implications for employers.

Zero Hours Contracts

Exclusivity clauses in ‘zero hours’ contracts will be banned meaning that employers who do not guarantee regular work for employees will not be permitted to prevent those workers from also working elsewhere.

Whilst this eradication of exclusivity clauses is to be welcomed, the Conservatives, unlike many of the other parties, did not advocate banning zero hours contracts entirely, instead recognising the role that, used correctly, such contracts can validly play in many industry sectors and the benefits for some employees who appreciate their flexibility.

Pay and National Minimum Wage (NMW)

The more cautious approach of the Conservatives to the raising of the NMW will be of some relief to employers.

The Conservatives have pledged to increase the NMW to £6.70 by autumn 2015, with a view to reaching £8 per hour by the end of 2020.

The tax free personal allowance is also to increase, so that employees working 30 hours a week will no longer pay any Income Tax.

Whilst there has been talk of “encouraging” employers who can afford it to pay the Living Wage, there has been no mention of how they intend to do this – simple rhetoric or financial incentives?

Employment and Apprenticeships

Unemployment remains a serious issue for the UK and the drive to increase youth employment has seen the Conservatives pledge to create an additional three million apprenticeships by 2020.

As an incentive to employers, the Conservatives have already put in place legislation to ensure that from April 2016 employers of apprentices under the age of 25 will no longer be required to pay employer National Insurance contributions on earnings up to the Upper Earnings Limit for those employees.

Equality and Discrimination

It will be no surprise to hear that the Conservatives’ policies in these areas were not as far reaching as some of the other parties, but there is progress all the same.

In an attempt to promote gender equality and close the gender pay gap, large companies with over 250 employees will be required to publish the difference between average pay of their male and female employees.

There are also aims to halve the disability employment gap, although no further details on the proposed changes and how they will be implemented have yet been published.

The vague promises of increased support to employees whose mental health problems impact their work, are unlikely to be pushed forward with the same gusto as if their old coalition partners had been joining them in government.

Volunteering Leave

Employers of over 250 employees or in the public sector will be required to allow staff to take three days of fully paid volunteering leave each year. Those employers affected by this new initiative will need a thorough review of their leave policies to implement the new work place entitlement.

Industrial Action

Employers will no doubt welcome the significant changes which the newly appointed business secretary Sajid Javid has confirmed with be made to this area. Strike action will be restricted to only those situations where there has been a clear positive decision in a ballot with minimum 40% turnout. There is a particular focus on what is referred to as the disproportionately disruptive effect that strikes can have in essential public services such as health, transport, fire and education, which will require a majority vote. Other changes will include repealing legislation which prevents employers from using agency staff to provide essential cover during strikes. This sees a significant weakening of the impact of strike action.

Summary

It will come as no surprise that, under a Conservative government, the changes afoot for employers will not be as far reaching as they would have been had we seen a Labour or alternative coalition government. Instead we are likely to see our new government “finishing the job we started” with more subtle changes to employment law, and continuing cut backs to red tape for businesses.

powered by Typeform