Employment Law Update (April 2010)
What's up for grabs at the election
Now that a general election has been called for May
6th, it's time for all the political parties to set out
their manifestoes with their plans for the next five years. With
the prospect of a change of government or even a hung parliament,
business owners and managers will want to know what's likely to be
in store for them after the result is announced.
At the last general election, in 2005, employment matters on the
agenda included additional maternity leave, new flexible working
rights and increasing minimum annual holiday entitlement from 4
weeks to 5.6 weeks. With those changes well embedded, the
question now is what proposals the parties have in store for
employers following the election. This time around, the
prospect of a difficult path out of recession, and the impact of
less money to go round will be additional factors weighing on the
politicians' minds.
Here our employment law experts set out changes that are
definitely on the way for later in 2010 and beyond, as well as key
themes from the various political parties' policy statements to
give an idea of what is likely to happen and what's up for
debate.
What's definitely happening
New Maternity and Paternity rights
New legislation has already been passed that will allow mothers
who return to work to pass on up to 6 months' untaken maternity
leave to the father. This will apply in respect of children born
after 3rd April 2011.
However, previous proposals to extend paid maternity leave from
nine to 12 months have been shelved.
Improved rights for agency workers
The government will implement an EU Directive giving increased
rights to agency workers, but the new rights are not due to come
into force until October 2011. The new rights include the
right to equivalent pay and conditions with permanent staff doing
the same jobs after 12 weeks' work.
Although a new incoming government could change this before it
comes into force, there is in reality very little room for
manoeuvre as the regulations are based on a European Union
Directive which must be implemented by the end of 2011 and
agreement between the CBI and the TUC has already been reached.
Greater equality in the workplace
The current government's flagship Equality Act became law just
after Easter, although it will not come into force straight away.
As well as updating existing laws on discrimination, it will also
allow employers to practise positive discrimination for the first
time and will put a greater duty on public authorities to actively
promote workplace equality, in particular by putting equality
requirements on their suppliers.
A new incoming government is unlikely to change the basics of
the Equality Act, but may delay the implementation of some or all
of it.
The election battlegrounds
Unlike in recent previous elections, this election comes as the
economy is gingerly working its way out of recession, and parties
are acutely aware of the balance they need to strike of giving
people more workplace rights while not imposing too great a cost on
business. Many measures that might be potentially costly to
business are either off the agenda altogether or presented as
longer-term aspirations.
Retirement Age and pensions
The problem of how to deal with an increasing elderly
population, demands to carry on working longer and the strain on
the pension system are sure to be topics high on the next
government's agenda.
Increasingly, people will want to – or will need to - work
beyond retirement age. In the long term, the cost of providing
pensions means the qualifying date for state pensions is set to go
up. Alongside this, the "default" retirement age for
employees, which was set at 65 with the introduction of age
discrimination law in 2006, is likely to increase as well or even
be abolished altogether. There have already been legal challenges
to this and the government has recently announced a formal
review.
Any change to the "default" retirement age will have an impact
on employers' workforce planning, and might mean freezes on
recruitment and fewer opportunities for "new blood" or promotions
within businesses.
Red Tape and Business Support
There is likely to be a divide between the parties on how much
"red tape" they can be seen as imposing on businesses, although all
parties, to a greater or lesser extent, promise a reduction in "red
tape" and more assistance for businesses in implementing new
regulations.
The problem is that in the long term, society is becoming more
and more regulated because of our obligations under EU law and
people's increasing awareness of their rights, so overall "red
tape" is unlikely to reduce significantly.
A big hurdle for SMEs wanting to do business with the public
sector is the obligations public bodies place on them for reporting
workforce make-up and the measures they have in place to promote
equality. The political parties can find it difficult to square the
circle of promoting equality and reducing the "red tape" of
ensuring this happens.
Apprenticeships and Training
One topic high on the agenda of all parties is the need to build
a more highly- skilled workforce. The government has already
introduced – in April - a right to request time off for training to
employees of larger businesses. It is proposed that this will be
extended to SMEs in 2011. These proposals do not require employers
to pay for the training or the time off, but this might be
reconsidered if take-up is low.
More apprenticeships for young people are also high on the
agenda, with proposals including guaranteeing more apprenticeship
places and subsidising employers to create apprenticeships.
More "Family-Friendly" rights
With changes to maternity leave and the extension of the right
to request flexible working already largely complete, there should
be fewer changes in store for employers. However,
possibilities include longer paternity leave; the possibility of
parents sharing the available "maternity" and "paternity" leave
between them and the extension of the right to request flexible
working to more people.
In addition, greater assistance to get the disabled or people on
long-term sickness absence back into work are being considered.