People Matter - Election Special
What will happen to the employment law changes which were already in progress?
As you’ll know, years into a Conservative government, there was a steady stream of employment legislation that has come to pass, or was in progress – from new right to work rules to shared parental leave.
For any legislation that was not over the line when the election was called on 22nd May, the future is uncertain; although there is more chance for some new laws than others.
What is the wash up? The wash up is a term for any active business that the government and other parties agree to prioritise before parliament shuts down for the election process. It doesn’t guarantee that the legislation will proceed, but it gives it a better chance and shows a broad political consensus.
Included in the wash up were:
There were several other employment law related changes which were being worked on but did not make the wash up. This makes their future much less certain – at the mercy of the new government and their priorities.
These concerned neonatal leave and pay; the right to request a more predictable working pattern; limits on the length of post-termination restrictions (i.e. non-compete clauses); and changes to TUPE and European Works Councils.
You may presume that should the Conservatives pull off a shock victory, more of this will go back on to the agenda; whilst if Labour win, they will prioritise their own manifesto content. If you would like help planning for the uncertainty, please ask your local HR Dept office.
What would national service mean for employers in practice?
It was the kind of policy which makes you sit up and take notice – the reintroduction of national service for 18-year-olds.
Compulsory military training and duties are adopted in dozens of countries around the world, and indeed were in Britain too, in the early years of the Cold War. But it is a bit of a culture shock to us in the 2020s. Of course, should the Conservatives lose, it is likely it will never come to pass; but what could it look like?
There is very little detail other than there would be two streams: a year’s solid military service or a weekend a month for 12 months of community service. So at this stage, the best thing to go on may be the model for the Army Reserves.
For the military service, this could see employees take unpaid time off (for which they are paid by the Army), and have the right to return to their job on the same terms and conditions when mobilisation is finished. If their role no longer exists, a reasonable alternative role should be offered. Furthermore, their employment may be protected for a period of time after their return. Fines or compensation awards may be charged to employers should they not comply.
As the starting point is 18 when they would be called upon, some (or many) may not have a job anyway, which would make it a moot point for employers. But if an employee was seconded away from you and it follows the reservists’ model, you may be compensated by the State for a range of costs you incur. If there is a severe impact on your business, you may even be able to apply for a delay or cancellation.
It’s all hypothetical, but perhaps that paints a picture.
Proposed trade union laws – how could they affect your business?
A theme of Conservative employment legislation over the past ten years or so has been degrading the power of the trade unions. Labour promises this will be reversed and some – if they get into power.
Areas that Labour will look at include repealing the Trade Union Act 2016 and the restrictions on industrial action it prescribed; making the process of trade union recognition more simple; introducing sectoral collective bargaining; and creating new rights and procedures for trade unions to conduct their operations.
It sounds wide-ranging and it is. Directly, it could expose you to dealing with trade unions on matters such as pay and your disciplinary process where you have not had this exposure before. Depending on the size and nature of your business it could also impose on you in terms of access that trade unions have and time your employees spend on union activity.
Indirectly, your business could be disrupted by more general strike action: staff struggling to get into work on time because of transportation strikes, more sickness absence because of NHS strikes, and so on.
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With all that said though, trade union membership has been on the decline for decades with less than a quarter of the workforce a member of a union. Time will tell if such a shot in the arm for the unions would change this.
The difference between workers and employees
To simplify matters for SMEs and workers alike, we have long campaigned for the abolition of the “worker” status – we even went to Westminster to lobby.
Now Labour has said they will do just that if they come to power. Why is it important?
There are currently three working statuses (although confusingly only two are recognised in tax law – employed and self-employed). In employment law, the third status is “worker” status.
A worker is like an employee-lite. They enjoy some but not all of the rights of employees, so technically there may be a cost benefit to a company of hiring workers. But it is not always fair on the worker and we think the confusion it causes cancels out the benefits. We have seen high-profile case law brought about by Uber drivers and others with worker status who have successfully argued for more rights.
Currently, there are three key tests to be considered an employee and all must be satisfied: delivering a personal service – they must do the work themselves, not be able to sub it out; there must be mutuality of obligation – the employer must give work and the employee cannot turn it down; the employer must exercise a strong degree of control over how the work is carried out.
If someone satisfies some but not all of the tests, they would normally be a worker. If they satisfy none, they would normally be self-employed. A single employee status (alongside genuinely self-employed) will make the employee status significantly smoother, aligned with tax law, and give everyone understanding of the employment rights they have.
What should your business be doing now?
Nothing is set in stone yet, but there are prudent steps you might take to position yourself for change. Acting in certain areas now may help you get ahead of the game.
With Labour’s promises of giving workers more day one rights, such as protection from unfair dismissal and an extended time period for employees to bring tribunal claims, you should consider bringing forward any decisions regarding staff changes – particularly if they affect staff members with less than two years’ service. Doing this now while it is still permitted could save you a lot of grief down the line.
Think also about company reorganisations, management training and the kind of contracts you will bring new recruits in on; given Labour’s views on zero-hour contracts and worker status, and the greater influence that trade unions may have in the future.
Always consult with an HR consultant like us before making any big decisions though, to ensure you do it right by the current rules.
100 days, longer or never…
Before the election it is all eyes on the polls and manifestos. After the election it is time to see if the victorious party can stay true to the promises made.
Labour tells us of a whirlwind of employment law changes starting within the first 100 days of government. History forewarns, though, that for one reason or another, government’s often find it difficult to enact all their promises.
From a hung parliament where political compromise must be made to a jarring reality shock when a party gets a proper look at the books, there are many reasons that manifesto promises don’t come to pass.
Sometimes it is a matter of time. Theresa May only had two and a half years to get busy; David Cameron, in 2015, one year; Liz Truss, well… 49 days. Even after winning a sizeable majority in 2019 Boris Johnson’s plans were derailed by the pandemic months later.
You need to plan, but keep this in mind.