As the dust begins to settle following a General Election outcome that no one predicted, we consider what this means for employers.
A Conservative majority government was unexpected but brings with it the prospect that the Tories will actually be able to turn their manifesto promises into law, without having to agree compromises as an inevitable consequence of a coalition government.
Many people take the view that the previous coalition government has transformed the landscape for employers and employees alike. Employment figures were recently reported as being at an all-time high and the introduction of the new Employment Tribunal Fees system has significantly reduced the number of claims submitted, to name but a few changes.
With the new government’s overriding aim being to achieve full employment in Britain by backing British businesses and minimising bureaucracy, the next five years could be an exciting time for commercial growth in the UK.
So what are the Conservatives’ key promises which may impact on employers?
Employment Tribunal Fees
There have been mixed reviews about the new fee system, from employees who now have to pay between £160 and £950 to pursue a claim, and from others who say that the new system has successfully streamlined the administration of justice. In reality, its effects on access to justice probably remain to be seen, although two attempts by the Unions to seek judicial review have already been rejected by the Courts. Employers and employees alike will no doubt watch with intrigue as a fuller picture emerges of the true effects of this reform.
Although reform of the current system was an election pledge of other parties rather than the Conservatives and is therefore now unlikely, this doesn’t mean employers can be blasé about the risk of claims. Employers should regularly review their policies, procedures and practices to minimise the risk of claims arising in the first instance, not rely on the fees to deter aggrieved employees from issuing claims.
Zero Hours Contracts
Employers who use zero hours contracts for flexibility and to meet the fast-changing needs of their business will no doubt be relieved that the stringent restrictions on such contracts threatened by Labour will not be on the cards in the next term of government.
It’s worth remembering, however, that exclusivity clauses in such contracts will still become unenforceable when the relevant section of the Small Business, Enterprise and Employment Act 2015 comes into force, at some point in the future. Employers should also note that the furore over the use of such contracts generally is unlikely to die down any time soon, with ACAS stating its intention to publish further guidance on the use of zero hours contracts later this year.
Trade Unions and Industrial Action
As part of commitment to “Jobs for all”, the new government has expressed its intention to reform the current law on industrial action to prevent “disruptive and undemocratic strike action” and reduce the Unions’ power. These reforms include raising the threshold of votes in favour for strike action in certain public, transport and emergency services sectors and repealing “nonsensical restrictions” which ban employers from using agency workers to cover striking employees.
Employers at unionised sites may see this as a welcome development to remove the spectre of strike action bringing business to a halt. Equally, it is unlikely the unions will take such changes lightly so it may mean a rocky road ahead for industrial relations in some sectors.
The new government aims to promote full gender equality by requiring companies with more than 250 employees to publish the difference between the average pay of their male and female employees. No mention is made of where exactly these figures will be published and what, if any, the consequences will be if there is an unacceptable disparity. In fact, no mention has been made about what will be considered unacceptable.
Needless to say, all businesses should review how they pay male and female employees in comparable roles and larger businesses should consider whether they would be happy for such figures to be made public.
The Question of Europe
Of course, as the newspapers have made clear over the last few days, the biggest issue facing the new government is its well-publicised commitment to hold an in-out EU referendum by the end of 2017.
There are strong opinions on both sides as to whether we should stay in or leave the EU. Regardless of the outcome, the inevitable uncertainty in the interim may well have a negative impact on commerce in general, particularly with our European neighbours.
Cameron’s clear election win may bolster the new government to take a harder line in negotiating the best deal for the UK before holding a referendum. But regardless of the outcome of those negotiations and, ultimately, the referendum, it will not be easy to change existing employee rights such as holiday entitlement, maternity protection and agency rights. Although these rights emanated originally from Europe they are now seen as either as an entitlement by, or form part of the contracts of, UK employees who are unlikely to be willing to easily give up their employment protection.
In the meantime, the Conservatives have a strong focus on moving other legislative powers back onto domestic soil. A new Bill of Rights is intended to replace the Human Rights Act 1998, cutting our connection with the European Court of Human Rights and vesting our Supreme Court with the ultimate decision-making power. This is clearly a key manifesto pledge as David Cameron has reportedly stated his desire for a draft bill to be prepared within the first 100 days of this Parliament. However, the reality is that whilst repealing the Human Rights Act itself may be relatively easy (although not necessarily certain with such small majority in Parliament), the rights it enshrines are not so easy to repeal. Is the government really intending to withdraw from the European Convention on Human Rights to which it was a founding signatory in 1951? Now that really would be a ground-breaking development for the UK.