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The General Election result and the Queen’s Speech – what is in store for employment law?

Employment contract, with terms of employment section Print publication

25/07/2017

The dust has settled on the General Election and the Queen’s Speech has been delivered (setting out the Government’s programme for the next two years) so now is a good time to take stock of what it all means for employment law. Read on for our ‘need to know’ employers’ guide.

The Repeal Bill

The Repeal Bill (formerly referred to as the ‘Great Repeal Bill’) will end the application of EU laws and the jurisdiction of the European Court over UK laws. It will convert EU law into UK law and create powers for the Government to amend these laws in the future. Previous decisions of the European Court will still apply. So, for example, the recent European decisions on the calculation of holiday pay will stand.

So what does this mean in practice? In effect, workers’ rights will be exactly the same after ‘Brexit day’ as they were before but the Government may legislate to repeal or amend employment laws derived from Europe over time. We think it is unlikely that anything will happen fast although there will probably be some de-regulation ‘around the edges’ over the course of time.

Brexit and free movement

How will the election result affect the UK’s exit from the EU? It is possible we will see a “softer” Brexit as the election result arguably demonstrated a rejection by voters to the Government’s “hard Brexit” approach. How this plays out remains to be seen.

The Immigration Bill announced in the Queen’s Speech is stated to “allow the Government to end the EU’s rules on free movement of EU nationals in the UK and make the migration of EU nationals and their family members subject to relevant UK law once the UK has left the EU, whilst still allowing the UK to attract the brightest and the best.”

So, the Repeal Bill will initially preserve UK immigration law but the Government will be able to legislate to repeal EU law on immigration following Brexit. EU nationals may then become subject to the immigration rules which apply to non-EU nationals. This is an issue concerning many employers and we will publish updates as things develop.

Immigration skills charge

No mention was made in the Queen’s Speech of the Conservative’s manifesto pledge to double the recently-introduced immigration skills charge (levied on companies employing migrant workers from outside the EU), to £2,000 a year by 2022 so this proposal appears to have been dropped.

Employment status, zero-hours contracts and the gig economy

The Taylor Review into modern employment practices has made a number of proposals aimed at improving the position of workers in the gig economy.

Amongst other recommendations, the review proposes a right for zero-hours’ workers to request guaranteed hours after 12 months’ service. The Conservatives have pledged that ‘workers should receive a decent wage and that people working in all sorts of jobs are able to benefit from the right balance of flexibility, rights and protections’ so it is likely that we will see some changes being tabled in this area although the Government’s reduced majority may make it harder for it to pass new legislation.

Taxes and Pensions

The personal income tax allowance will be increased to £12,500 with the higher tax rate starting at £50,000. Plans to increase national insurance contributions for the self-employed were scrapped earlier this year although the Chancellor has not ruled out such increases in the future.

Employment Tribunal fees

Neither the Conservative party nor the DUP have any plans to scrap Employment Tribunal fees.

The SNP has stated that it will scrap Employment Tribunal fees in Scotland when responsibility for Employment Tribunals is formally devolved.

Pay

It was confirmed in the Queen’s Speech that the National Living Wage (NLW) will increase to 60% of median earnings by 2020 (currently forecast to be £8.75 per hour) and, after that, by average earnings growth. Both the Conservatives and the DUP pledged in their manifestos to increase the NLW and take action against employers who failed to pay the NLW.

Time off

The Conservatives had stated in their manifesto that they would introduce legislation to allow workers the right to request up to a year’s leave from work to care for a sick relative and would introduce a new statutory right to leave for parents who have lost a child. These measures were not, however, mentioned in the Queen’s Speech.

Discrimination

The Conservative manifesto promised to ‘transform how mental health is regarded in the workplace’ and extend protection against discrimination that occurs because of an individual’s mental health condition where that condition is ‘episodic and fluctuating’. The Queen’s Speech made much less of this issue and simply stated that considerations will include “ensuring that those with mental ill health are treated fairly, protected from discrimination, and employers fulfil their responsibilities effectively”.

The gender pay gap was touched upon in the Queen’s Speech to the effect that the Government would make ‘further progress’ in tackling the gender pay gap and discrimination generally and would work with Sir John Parker, Chairman of Anglo American Plc, to improve the ethnic diversity of boards by 2021.

Overall, it appears that the Conservative’s manifesto pledges in this area have been watered down.

Data Protection

A new Data Protection Bill will be introduced to replace the Data Protection Act 1998. This will implement the provisions of the EU General Data Protection Regulation (GDPR) which comes into force in May 2018, but which the UK had already pledged to preserve post-Brexit to enable continued trading and data sharing. The GDPR represents a huge shake up to data protection laws and it is essential that employers ensure practice and procedure on processing employee data complies with the GDPR. For more information click here.

Scotland

The SNP has stated that it will continue to push for “full devolution of employment and employability policy” to Scotland.  This is of significant consequence to employers with operations in Scotland as full devolution would lead to a complete review and overhaul of workplace rights and entitlements.

Conclusion

Unsurprisingly, given Brexit and the Government’s tenuous position in the House of Commons, changes to employment law appear to be towards the bottom of the Government’s ‘to do’ list. Employers may view this as an opportunity to focus on the wider business challenges presented by Brexit and as a welcome pause for breath in the HR arena after a wave of employment law changes over the last few years.

If you would like further advice please contact David Smedley or Andrew Rayment.

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