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Implications of the election for employers - April 2010
The forthcoming general election is set to be one of the most contested electoral battles in recent history. Opinion polls, which are currently showing a huge leap in support for the Liberal Democrats, have only served to increase speculation that the election may return a hung parliament for the first time since 1974. In this month's Working Times we take a look at the implications for employers of the policies of Labour, the Conservatives and the Liberal Democrats and consider what a hung parliament might mean in practical terms.
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Labour: the story so far
Many of the employment rights which are now routinely accepted in the workplace, have been introduced by Labour during its last three terms in office. For example:
- The National Minimum Wage;
- The right to 4 week's paid annual leave and other rights under the Working Time Regulations;
- The right not to be unfairly dismissed after 12 months service (as opposed to 2 years pre-Labour);
- The right to request flexible working for parents of children under 16 and carers of dependant adults;
- The extension of maternity leave to a year and maternity pay to 39 weeks;
- The introduction of paid paternity and adoption leave and unpaid parental and dependant care leave;
- Protection from discrimination on the grounds of part-time/fixed term status, sexual orientation, religion or belief and age;
- The new Acas Code, which is an attempt to curb the number of employment tribunal claims.
Other policies which are not strictly 'employment law' have also had a positive knock-on effect in the workplace e.g. the introduction of child-care vouchers, working tax credits and free child care for all three and four year olds. Such policies, which help working parents 'afford' to work, have proved very popular with employers who now find it easier to retain key staff (particularly female employees) with young children.
Many of Labour's other policies are already in the process of implementation e.g. Equality Act 2010, which seeks to consolidate and harmonise the existing discrimination legislation concerning sex, race, disability, sexual orientation, religion or belief and age and introduce a number of new measures such as rendering pay secrecy clauses unenforceable and discouraging employers from asking pre-employment health questions. |
Labour Policies: implications for employers
Moving forwards, Labour's key policies on employment law are:
- Increasing paid paternity leave to four weeks. Identifying ways of enabling fathers to take this time flexibly and the possibility of sharing the extra weeks between parents;
- Increasing the national minimum wage at least in line with average earnings until 2015;
- Addressing high pay in the public sector and capping public sector pay rises at 1% in 2011/12 and 2012/13;
- Encouraging employers to use pay reviews and equality checks to eliminate pay inequality;
- Introducing a right to request flexible working for older workers (age subject to consultation);
- Getting rid of default retirement at 65 and reviewing how to support more people working for longer if they choose to do so;
- Gradually tightening immigration criteria to make it harder to come to work in the UK (with the aim of no unskilled migration from outside the EU).
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Conservative Policies: implications for employers
The underlying principle of the Conservative approach is "simplifying employment law to make it easier to hire people". They plan to introduce a "one-in, one-out" rule for new regulations, "regulatory budgets" and sunset clauses to give businesses more freedom and greater flexibility.
The Conservative's key policies on employment law are:
- Introducing a new system of flexible parental leave that enables parents to share leave between them and ensures that parents on leave can stay in touch with their employer. They have suggested that this would be 52 weeks leave, which can be shared between the parents or could be taken by both parents at the same time. However, only mothers could take the first 14 weeks after the birth;
- Extending the right to request flexible working to every parent with a child under the age of 18 and every public sector employee. In the longer term, after consultation, extending this to all;
- Freezing pay for public sector workers (excluding the million lowest paid workers), publishing details of all public sector salaries over £150,000, requiring anyone paid more than the Prime Minister in the public sector to have their salary signed off by the Treasury and cutting ministers' pay by 5%, followed by a five year pay freeze. David Cameron has previously suggested that he would establish a fair pay review to ensure that senior managers in the public sector do not earn more than 20 times more than the lowest-paid person in their organisation;
- Reviewing the criminal records and vetting and barring regime and scaling it back;
- "Opposing the early adoption of the [Agency Worker] regulations" and reserving "the right to reassess them in the event of a Conservative victory at the forthcoming Election";
- Giving public sector workers the right to form employee-owned cooperatives to take over the services they deliver;/li>
- Compulsory equal pay audits for any employer found to be discriminating on the basis of gender and taking measures to tackle the gender pay gap, including stronger legislation to prevent employers discriminating. If elected, they plan to bring the Equality Act 2010 into force at some point save for the public sector socio-economic duty, the "mistaken" provisions designed to tackle equal pay, and new rules on positive action;
- Ensuring that NHS staff are protected if they raise concerns about patient safety;
- Looking at how to abolish the default retirement age;
- Setting an annual limit on the number on non-EU migrants coming to the UK to live and work;
- Consulting on proposed changes to the employment tribunal system to ensure the system offers "fast, cheap and accessible justice" that it is fair to both sides;
- Being "prepared to build" if necessary on the "last Conservative government's industrial relations reforms";
- Replacing the Human Rights Act 1998 with a UK Bill of Rights.
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Liberal Democrat Policies: employment implications
The Liberal Democrats plan to consult with businesses to identify regulations for repeal, reduction or simplification. They will end "gold-plating" of European directives and reduce the burden of "unnecessary red tape" by assessing the cost and effectiveness of regulations before and after they are introduced, using "sunset clauses" and working towards principle of "one-in, one out" for new rules.
The Liberal Democrat's key policies on employment law are:
- Introducing "name-blind" application forms, initially for employers of over 100 employees;
- Ensuring the same minimum wage rate is paid to everyone in work, regardless of age;
- Extending the right to request flexible working to all employees;
- Introducing "fair pay" audits for every employer with over 100 employees (NB: the term 'fair pay' seems to include pay imbalances between those of the same sex);
- Giving fathers the right to time off for ante-natal appointments;
- Allowing parents to share the allocation of maternity and paternity leave between them in whatever way suits them best and seeking to extend the period of shared parental leave for up to 18 months "when resources and economic circumstances allow";
- Paying anyone undertaking an internship a training allowance of £55 a week;
- Restoring the public interest defence for civil service whistleblowers;
- Reforming the process of criminal record checks so that volunteers need have only one record that is portable, rather than multiple checks for each activity;
- Requiring public companies to declare any remuneration of £200,000 or more;
- Scrapping compulsory retirement ages allowing those who wish to continue in work to do so;
- Ending "unfair discrimination on grounds of faith" when faith-based schools recruit staff, except for those principally responsible for optional religious instruction;
- Capping pay rises in the public sector at £400 per annum, initially for two years.
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What might the consequences of a hung parliament be?
In the event that no party has the overall majority on May 6th, we will face our first hung parliament since 1974. To pass laws and stay in power, any minority government will need an alliance with parties or independent MPs who vote with the government (supportive opposition). The obvious choice for such an alliance has traditionally been the Liberal Democrats, who generally come in 3rd place. Indeed, political commentators have suggested that, even in the event of the Conservatives returning the most MPs but no overall majority, the most likely alliance is a pact between the Liberal Democrats and Labour. However, the recent upswing in popular support for the Liberal Democrats has put this assumption in doubt; could it be possible that the Liberal Democrats will have the most MPs but no overall majority? If so, it is not inconceivable that they will choose to form alliances with smaller parties such as Plaid Cymru, the Scottish National Party or the Democratic Unionists of Northern Ireland, to allow them to form their own government.
One thing is certain; in the event of a hung parliament the party seeking an alliance to form a coalition government will have to compromise upon their policies to a degree and offer concessions to their supportive opposition. Could these concessions include compromises on issues such as equal pay?
If you need further advice on this subject we will be pleased to hear from you. |
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