With the Scottish referendum on independence only 2 weeks away we take a look at the implications on employment law of a YES vote.
At present, the proposals suggest that there will be no significant changes to employment law however some of the changes which the current UK Coalition Government has put in place may be reversed.
In simple employment terms, the basis of UK employment legislation is heavily influenced by the EU and as a result, in the event of independence, employment law is not likely to change significantly, and certainly not in the immediate future.
Given that the Scottish Government is expressing the hope and desire that Scotland will be able to become an independent state within Europe, it is committing itself to comply with EU laws on employment. In that regard, little would change.
What would change is the administration of Employment Tribunals which are currently part of the Ministry of Justice (MoJ). Instead they would be under the umbrella of the Scottish Tribunals Service (STS). It is possible that there would be changes to rules and procedures in accordance with the rules and procedures in other tribunals under the STS umbrella, but the general rules on the administration and procedures governing tribunals in Scotland would be unlikely to change substantially. At present, even within the current tribunal system operated under the MoJ, there are specific rules governing procedures in Employment Tribunals in Scotland which differ from those in other parts of the UK. The preservation of these separate rules and procedures are the result of a hard fought campaign to ensure that the system of advocacy based hearings was maintained and that they are dealt with in accordance with the general laws of Scotland. It seems unlikely that there will be any significant alteration to these procedures if there is independence and the operation of Employment Tribunals is transferred to the STS. Further differences in the rules may appear as time passes but as employers and lawyers alike, are currently used to dealing with a difference in approach between Scottish Employment Tribunals and those elsewhere, it should not require significant adjustments.
The Scottish Government has proposed changes to industrial relations and has indicated that in the event of independence there would be a closer working relationship between the STUC and the Government in order to involve the unions and employers in a more detailed dialogue regarding future employment in Scotland.
The pressure of the independence vote has forced the current UK Government and the opposition parties to promise that post referendum, if there is a NO vote, the Scottish people will still be given more direct powers of self-governance. Devolution will be extended and with it tax raising powers. Inevitably, the socialist element of Scottish politics is likely to lead to growing differences between Scotland and the rest of the UK. Most political parties are arguing for a more egalitarian state which will have an impact on attitudes to employment and industrial relations. Regardless of the outcome of the referendum, the breadth of that gap will most likely depend on the outcome of the UK general election next year.
In addition, the Government would consider the possibility of introducing a mandatory Living Wage but in fact, have not committed to this absolutely. In reality, it seems unlikely that there would be a significant change as this is currently the aspiration of the Scottish Government and indeed has been taken on-board by many employers within the UK, albeit this is not yet compulsory.
As well as additional taxation for those higher earners, the Scottish Government is proposing to re introduce the 90 day consultation period on redundancy. Given that the law on this has only recently changed to reduce that period to 45 days, the impact of this should not be significant.
In business transfer situations, the TUPE rules have changed and now allow for pre transfer consultation on redundancies. The immediate impact of increasing the maximum period of consultation back up to 90 days may not be significant. It seems likely, that as with most other areas of employment law, TUPE would remain in Scotland as it currently is, given that it is based on the European Acquired Rights Directive. It is possible that over time, an independent Scottish Government would apply the Acquired Rights Directive in a slightly different manner to that of a UK Government. This may have an impact on cross border acquisitions but it is unlikely to be something which would be changed immediately. It is more likely to evolve from practical issues which arise as the impact of independence becomes clearer or indeed if employment law in Scotland evolves differently from the rest of the UK.
In conclusion it is unlikely that there will be an immediate impact in the event of independence. The ultimate impact may be reverting to positions which had existed until recently such as the minimum consultation on redundancies or on expanding representation on company boards and the introduction of the Living Wage, but these will not happen overnight. However companies which have operations throughout the UK, particularly where their head office and the board of such companies is in Scotland, will need to monitor the impact of independence closely.