New team takes over Government

Employment Law Update (May 2010)

New team takes over Government

With the election result now clear, and a new Conservative – Liberal Democrat coalition Government installed, employers will be keen to know what the impact of the change of Government is likely to mean for them.

Although things will take some time to become clear, one thing that is certain is that the employment law landscape has changed and employers will need to get used to a new Government mindset. Things may become a little clearer once the emergency budget has been announced, expected by the end of June.

To try and give employers a taster of what changes to expect on the employment law front, here we take a look back at the significant changes that happened during the years of the New Labour Government and review the manifesto commitments made in this May's election by the Conservatives and Liberal Democrats to see the shape of what's to come.

The New Labour era – 1997 - 2010

The New Labour Government's three successive terms of office since 1997 were characterised by a general increase in individual employee workplace rights. In general, the Government tried to introduce these in a measured and incremental way, with strong efforts made to keep employers "on side".

However, it's still worth considering the amount of change employers have had to get used to over that period. The list of changes introduced since 1997 include:

In 1998, the Working Time Regulations introduced statutory rights to breaks, a maximum 48 hour working week (subject to opt-out) and four weeks' minimum paid holiday entitlement for all workers. The future of the U.K.'s "opt-out" is currently under review by the European Union.
In 1999, the National Minimum Wage was first introduced.
The right for employees to be accompanied by a trade union official at disciplinary and grievance meetings was introduced in 2000.
Maternity Leave increased from 14 weeks in 2007 to a full year, with 9 months of it being paid, by 2010.
The statutory right to union recognition (which applies to workplaces of 21 employees or over) was introduced in 2000.
Two weeks' Paternity Leave for fathers was introduced in 2002.
The right to request flexible working was first introduced in 2003 and now applies to parents of children aged under 17; parents of disabled children under 18 and others with care responsibilities.
New anti-discrimination laws came into force – outlawing discrimination on the grounds of religion and belief and sexual orientation in 2003 and age in 2006. Part-time and fixed term workers also gained equal status with permanent full-time staff.
In 2004, statutory disciplinary and grievance procedures were introduced, only to be repealed and replaced by an updated ACAS Code of Practice in April 2009.
In 2008, the right to paid holiday was increased to first to 4.8 weeks in 2007 and then to 5.6 weeks in 2009.

What's on the agenda under the Conservative/Liberal Democrat coalition

The new Conservative/Liberal Democrat coalition Government will have to make some decisions about various items of work in progress before getting underway with more long-term projects. Items currently in the "in-tray" for the new ministers include:

The Equality Act

The Equality Act, which became law in April 2010, will only be brought into force when the Government decides to implement it. The original timetable was for much of the Equality Act to come into force in October 2010, but this is expected to slip further into the future owing to the change of Government.

Much of the Equality Act was supported by the Conservatives while they were in opposition, but controversial parts include:

The new power which would allow employers to practise positive discrimination for the first time;
Equal Pay Audits for larger businesses – the Conservatives' view is that these should only happen in cases where businesses have been found by an employment tribunal to be discriminating on the grounds of gender.

The Vetting and Barring Scheme

The Vetting and Barring Scheme, which applies to people working with children or vulnerable adults is due to come into full effect in England and Wales in November 2010.

The Conservative manifesto promised to review the scheme and to "scale it back to common sense levels", indicating some reduction in the scope of the scheme. However, so much work has already been done to make the new system work that it seems unlikely substantial changes will be introduced at this stage.

However, one area that could be changed quite easily might be to remove the introduction of work defined as "controlled activities". Controlled activities are areas of administrative work but involving some opportunities for contact with children or vulnerable adults. It is proposed that barred individuals may work in controlled activities but subject to safeguards.

A review of the scheme has already recommended that controlled activities should be brought within the scope of "regulated activities", which would mean barred individuals would not be permitted to work in them. This change would be straightforward to implement.

Maternity and Paternity Rights

The extension of maternity and paternity leave entitlements looks set to continue under the coalition Government.

Regulations have already been put in place by the outgoing Labour Government that will allow parents of children born after 3^rd April 2011 to transfer up to six months' unused maternity leave from the mother to the father.

The Conservatives' manifesto proposal for "flexible parental leave" indicates that this proposal is likely to go ahead, although it is not clear whether, or within what timescale, it might be extended to cover the full period of maternity leave.

Flexible Working

The Conservatives' long-term ambition, as stated in the conservative manifesto, is to extend the right to request flexible working to all. Initially the manifesto suggests the right to request flexible working will be extended to all parents with a child aged under 18. Since the current law already extends to parents with children aged under 17, or disabled children under 18, such an extension is unlikely to have a significant impact on employers.

Workplace Pensions

The Labour Government's plans for compulsory occupational pensions for all employees, with employers contributing 3% of pay, are likely to be reviewed by the new coalition Government but it seems likely something similar will be introduced.

National Minimum Wage

Both the Conservatives and the Liberal Democrats have pledged to retain the National Minimum Wage. Any future increases are currently decided by an independent body, the Low Pay Commission.

It is expected the coalition Government will retain the National Minimum Wage but it seems unlikely that a Liberal Democrat manifesto promise to uprate the NMW to the adult rate for all workers (except apprentices) will be seen as a priority.

Retirement Age

The coalition Government has committed to "phase out" the default retirement age of 65 currently permitted under age discrimination law.

A Government review is already underway and it is highly likely that this will result in either the abolition of the default retirement age altogether or at the very least it being raised closer to 70 as a first step in a phased removal.

With all of this on the new Government's agenda, there's plenty to keep us busy here at Mentor. We'll be keeping a close eye on developments as they happen and we will make sure you're informed and up-to-date. Remember our Employment Law Team is available 24/7 to give you all the help you need.