Democracy is apparently rife at the moment. This time last year we were in the midst of the Brexit campaign – with both the ‘leave’ and ‘remain’ camps finding themselves a permanent branch to perch on in headlines, daily news updates, social media trends, hashtags, and conversations all across the UK. Homes and offices stood divided, and remain so with the unexpected Leave result. What cannot be denied is that we now need to make the best of the situation, though there is no consensus on how this should be done.
Fast forward a year – and we are again asked to cast our votes. No, we’re not talking about the Eurovision Song Contest. We of course mean the surprise general election called by PM Theresa May in April, who had previously promised there would be no general election before 2020. This followed swiftly after an early election of the Northern Ireland Assembly in March 2017.
In the next couple of years, we may well be faced with another referendum on “The Scottish Question”, and perhaps Wales will follow in the future. As we say, democracy (such as we implement it) is rife right now.
June 2017 General Election
As it was with the 2015 general election, the economy is top dollar on the agenda. Business interests come with that, alongside issues of taxes, inflation and the dreaded Austerity Programme. What is different about 2017, is that the parties are saying something different from each other. The Centrist view is no longer shared by all the three main parties, and workers’ rights are at the forefront of the campaigns, for the first time in a generation. It is generally felt that Corbyn is the architect of this change, and that the other parties are responding in kind to compete for the popular vote from, to coin one of May’s favourite slogans, “hard working families”.
Let’s Talk Politics
In this week’s blog, we look at what each party is promising to workers in their attempts to woo the working class voter. In the red corner we have Labour with a 20 point plan for “security and equality at work”. In the blue corner are the Conservatives, with Theresa May’s 11 point plan, which the Independent describes as her biggest raid into Labour territory. (Before the politicos come at us with stakes and torches, we are aware that it is in fact a 12 point plan as it includes a desire to implement race pay gap reporting). The yellow (or gold if you prefer) corner houses the Liberal Democrats’ vision for a “fairer society”.
Of course, our Employment Law Team is hot on the heels of the manifestos. Here we pick out some of the key changes promised by the three main parties, and what this means for workers in reality.
What we say - Labour
Ban on zero hours contracts to prevent exploitation
This sounds good in theory for workers, however in practice employers will just issue contracts for a low number of minimum guaranteed hours. It will most likely make no difference at all for workers or employers as to how many hours are worked.
Raise the Minimum Wage to the level of the Living Wage (expected to be at least £10 per hour by 2020) – for all workers aged 18 or over, so that work pays.
Currently, the National Minimum Wage ranges from £4.05 - £7.05 per hour for up to 24 year olds (not including apprentices), and the National Living Wage for over 25’s is £7.50 per hour. The current projected rate for 2020, using the latest OBR forecasts is £8.75.
The real “Living Wage” promoted by the Living Wage Foundation is £8.45 nationally and £9.75 for Londoners, but this is voluntary and not enforceable in law.
In practice, the government subsidises low wages by the tax credit system (soon to be Universal Credit). Costs of this are borne through general taxation from all sources. By forcing employers to pay more, the burden is passing from the government to business. Many argue that this is where it belongs in the first place. Given the relatively small sums involved, it seems unlikely that most businesses will be severely affected by this change, though the proposed corporation tax rise by Labour will have a potentially bigger impact. For many workers, it may be swings and roundabouts – what they gain from their pay packet is lost in tax credits, and that will vary according to individual circumstances.
Abolish employment tribunal fees – so that people have access to justice.
Fees were introduced in 2013 and reviewed in 2017. The tiny minority of vexatious and repeat Claimants are unlikely to be deterred by a fee, so this probably had little impact in preventing those sorts of claims.
Tribunal fees are undoubtedly an extra hurdle for claimants to overcome when seeking to enforce their rights. The number of employment tribunal claims have plummeted since their introduction and only the poorest claimant can obtain fee remission. If claimants cannot enforce their rights because of tribunal fees, than it matters not what rights are promised or given to them. Overall, this policy is a positive step for workers and not necessarily bad for business as it should further encourage employers to resolve workplace disputes in-house or with the help of ACAS. The handful of have-a-goers will still try their hands.
Doubling paid paternity leave to four weeks and increase paternity pay – because fathers are parents too and deserve to spend more time with their new babies.
We cannot see the necessity of this, and it appears to be a “tinkering around the edges” policy. Many fathers take additional time off out of their annual leave anyway. Since the introduction of Shared Parental Leave, mothers and fathers have more flexibility in terms of how they want to spend time with their baby. Fathers can still take their 2 weeks paternity leave entitlement, and then borrow some of the mother’s maternity leave as desired. The current Shared Parental Leave arrangements arguably give fathers more time with their new babies, than an additional 2 weeks of paternity leave would. Having said that, it is generally unpopular with most couples and the take-up is extremely low.
Reinstate protection against third party harassment – because everyone deserves to be safe at work.
This would put legal liability on employers for the conduct of customers, suppliers and clients, where offensive verbal abuse and even physical abuse could be actionable by the employee against them.
This used to be the case until part of s.40 of the Equality Act 2010 was repealed in 2013. Previously, if two incidences of harassment had taken place, which the employer knew about but failed to take reasonable steps to prevent from occurring again, then the employer could be held liable – this was known as the “three strikes rule”. If Labour intend to reinstate this exact provision, then there are sensible safeguards for employers making it not too burdensome.
The Tory Trade Union Act 2016 will be scrapped, with all workers given right to union representation, and trade unions guaranteed access to workplaces.
The Trade Union Act 2016 is very unpopular amongst Labour supporters and Unionists, not least because its aim was to limit strike action, impose stricter rules on when a strike can take place, and allow employers to put in place contingency plans in the event of a strike (like drafting in agency staff). Strikes can be very disruptive to a business, and can sometimes be used as a tool to hold employers to ransom. For the functioning of large businesses and the public sector, scrapping the Act is not ideal but would be welcomed by their unionised workers.
Workers already have a statutory right to union representation if they wish to take it up, and to have their rep attend grievance and disciplinary meetings, so no change there. Unions’ strength and popularity has been declining since the 1980s, and with the recent transport strikes causing major disruption to thousands of commuters, it seems unlikely that strengthening Union powers will find public support.
Clamping down on “bogus self-employment”, and shifting the burden of proof, so that the law assumes a worker is an employee unless the employer can prove otherwise.
Good idea for workers in theory, but slightly idealistic. Some people don’t want to be permanent employees, they enjoy the flexibility and freedom that comes with being self-employed contractors. Having employee status thrust upon them may actually be counterproductive, for both employer and the individual. However, this would mostly work against businesses who want to have as little legal responsibility and regulation for their workers.
Propose four new public holidays - bringing our country together to mark our four national patron saints’ days. These will be additional to statutory holiday entitlement so that workers in Britain get the same proper breaks as in other countries.
The current position is that workers are entitled to 28 days per year (pro rata for part time workers) which can include the 8 annual bank holidays. Most employment contracts count this in the overall annual entitlement, or stipulate 20 days plus bank holidays.
After Mexico, the UK (along with the Netherlands and Hungary) has the fewest number of public holidays in the world. Most other European countries have figures in the early teens. Interestingly, the number of working hours are not directly responsible for productivity, shown by Germany who is 4th on the world competitiveness scale (UK is 10th) yet German workers have the shortest working week.
We expect that workers will celebrate the addition of extra statutory public holidays and employers will complain, but the potential impact on business and the economy could well be minimal despite pessimistic predictions – we have all got to work Smarter and not Harder, right?
The interesting point to note is that Corbyn announced this policy to “bring together the 4 nations” of the UK, but each devolved nation’s government would need to agree to pass its own legislation on this, since it is secondary legislation that governs this area now (Working Time Regulations 1998).
What we say - Conservatives
Guaranteeing that workers will enjoy the same rights after Brexit as they do under the EU
Currently, much of the rights and protections afforded to workers in the UK are enshrined in primary and secondary legislation implemented by Parliament and the regions, and go beyond those of EC Directives and related caselaw. At the point of Brexit, those laws will still be in effect. Any attempt to repeal them would be slim because they represent the status quo and would be universally unpopular amongst the electorate and the opposition parties. This renders the guarantee somewhat empty.
Protections for "gig" economy workers, with a consultation on rights such as maternity leave
This is a welcome change. The courts and tribunals have done their part in terms of giving worker status to those in the “gig” economy. The “gig” economy itself has a lot of potential for exploitation, so increased protections are welcome. However, Theresa May is promising only a consultation on rights rather than a guaranteed change.
Will it adversely affect the “flexibility” which is much lauded by employers who prefer to engage contractors than take on employees? We will have to see.
Extending the Equality Act for those with mental health conditions
The Equality Act 2010 already protects those suffering from mental impairments in the same way as for physical impairments, and any health condition must satisfy the definition of disability under the Act. The Schedules to the Act, Equalities Commission guidance, and case law further cement this position. This proposed change by the Conservatives would remove the requirement for employees to have suffered from a mental health condition for at least 12 months before they gained protection under the Equality Act. This however may be far too onerous on employers and in the absence of guidance could give rise to spurious allegations of discrimination. The manifesto promise is just too vague to show any difference to the status quo.
New right to care for sick relatives full-time for up to 1 year
This may seem attractive and extends the current entitlement to dependant leave, which is limited to a “reasonable time”. However, what is not made clear is that this time off would be unpaid and therefore it is unlikely to be utilised in practice, since it would probably work out cheaper to pay for care and/or request flexible working/part time hours, than take a whole year off work unpaid. In addition, job seekers who are more likely to have older relatives to care for (for example those 40+) could be discriminated against in the recruitment process since they are more likely to take this sort of leave than someone in their 20s and 30s.
National Living Wage for workers aged 25 and over, currently £7.50 an hour, would rise in line with average earnings until 2022. The government’s ‘ambition’ to increase The National Living Wage to 60% of median earnings by 2020 is reiterated.
This is not a new sentiment – the independent Low Pay Commission researches, consults on and reviews the National Minimum/Living Wage each October, and recommends an increase to government each year.
Interestingly, 2017 saw the biggest increase for ten years at 4.2%, whilst average earnings only increased 2.2% according to the LPC. This puts May’s assurance that NMW/NLW will rise in line with average earnings into perspective, as it could actually mean smaller annual increases and lower pay.
The ambition of 60% by 2020 is the same government policy as now, so no change.
Could this keep young workers (especially in London) from being able to afford to leave their parents’ homes and rent/buy themselves until their late twenties?
"Returnships" for mothers going back to work after a baby
This is confusing. We are struggling to understand what “returnship” means in this situation. Is it a form of apprenticeship (very low paid and including training)? If so then this would be a scenario worse than the current position, which allows a woman to return to the same job if she took ordinary maternity leave (OL), or to a similar job on the same terms and conditions if she took additional maternity leave (AL). The current position therefore sounds much more appealing than the idea of a “returnship” for those women on maternity leave. No mention is made of parents taking Shared Parental Leave here.
If by “returnship”, May means the trademarked term registered to Goldman Sachs for their corporate scheme, then it is a short term paid employment contract aimed at professional women (and men) returning from an extended career break, to try-them-and-see before offering them a permanent role. Many women may find this concept patronising, intensely pressuring, and very insecure employment.
What we say - Liberal Democrats
Strengthen enforcement of employment rights, including by bringing together relevant enforcement agencies and scrapping employment tribunal fees.
This mirrors what Labour has said and we refer to our comments above. It is not clear what “relevant enforcement agencies” they are referring to.
Stamp out abuse of zero-hours contracts. We will create a formal right to request a fixed contract and consult on introducing a right to make regular patterns of work contractual after a period of time.
Good idea in theory – however it depends on the detail. If the worker can choose whether they stay on a zero hours contract or move to a fixed term contract, then this would be a sensible way of addressing the unpredictable earnings situation, without encroaching on the flexibility and freedom that some workers and employers get from a zero hours contract. However, even a fixed contract can create unpredictable working schedules if it is only for say 4 hours a week, with the rest of the time worked as overtime.
As for making regular patterns of work contractual after a period of time, this is currently part of the age-old “custom and practice” rule, and is very case specific, but it seems as if the Lib Dems want to enshrine this in statute with a specified period of time. This could be easily subverted by an employer deliberately varying hours so as to avoid the provision.
Encourage employers to provide more flexible working, making this a ‘day one’ right, so that there is a presumption that work is flexible unless there is a clear business reason it cannot be.
We like this! Many people do not return to work and/or apply for jobs because of the hours/days they are expected to work. Offering the chance to request flexibility from the outset (rather than having to wait 26 weeks) may result in a reduction to unemployment rates and encourage more women to return from maternity leave.
However, this doesn’t change the position by much. At present employees can make as many non-statutory flexible working requests as they like, and from day 1. It is only the statutory request (limited to 1 request per 12 months) that requires an employee to have been employed for 26 weeks first. It is also still a right to request, not a right to have flexible working, and is qualified by the employer’s statutory right of refusal for certain reasons.
It could work against both employers and employees, where more sex discrimination claims are made by women due to inequalities in the recruitment process and workplace, and/or age discrimination towards those who require flexibility to care for elderly relatives.
Expand the Access to Work programme aimed at getting those with disabilities back into work
The other two parties have been silent on how to help those with a disability back into the workplace. Substantial cuts to disability benefits have made this a big issue, where disabled people are deemed fit for work and forced to enter the jobs marketplace, but it doesn’t correlate with their employability, the numbers and types of jobs available, and the willingness of employers to offer work to those with additional needs. The Equality Act 2010 provides protections, but in practice it is very hard to enforce them when there is often insufficient evidence to prove the discrimination.
Individuals with a disability who might be able to return to work with assistance would certainly benefit from an expansion to the Access to Work programme. It is refreshing that a party has addressed this as a standalone issue. However it is clear as mud as to what level or type of expansion is proposed. For the employer, it could be beneficial to have some practical assistance and guidance when dealing with a disabled employee returning to work, but whether this would be much more than they currently can access is unknown.
Establish an independent review to consult on how to set a genuine living wage across all sectors. We will pay this living wage in all central government departments and their agencies, and encourage other public-sector employers to do likewise.
See our comments above on Labour and Tory suggestions on this point. The Low Pay Commission already independently reviews the NMW/NLW, and the Living Wage Foundation promotes more realistic voluntary pay targets. The Lib Dems suggest a “genuine living wage” should be consulted on, and should be paid to civil servants, who are on the whole paid far more than the NMW/NLW now anyway, with lower paid unskilled roles (cleaners, caretakers, etc) being contracted out by the public sector to the private sector.
Fund more extensive childcare, and provide better back-to-work support to reach an ambitious goal of a million more women in work by 2025
It is often the case that a woman cannot return to work after having children because most or all of her salary would be eaten up with childcare costs. More assistance with childcare funding would most certainly help get more women back into the workplace. Provided that the childcare funding is not passed onto the employer by way of additional tax, then this proposal would benefit both employers and employees, particularly single parents.
Outlaw caste discrimination.
Caste is not currently one of the specified protected characteristics in The Equality Act, and so caste discrimination is not explicitly prohibited. However, the Lib Dems are not introducing anything new or ground breaking here. The Government is already consulting on the issue and is offering two options as a way forward: (1) prohibiting caste discrimination through developing case law; or (2) prohibiting caste discrimination by specifying caste in the Equality Act.
Caselaw has already established that caste can be a protected factor in a race and/or religious discrimination claim.
The issue is therefore already being addressed, and caste discrimination is likely to be outlawed whether by an amendment to the current legislation or by caselaw.
Encourage the creation and widespread adoption of a ‘good employer’ kitemark covering areas such as paying a living wage, avoiding unpaid internships and using name-blind recruitment to make it easier for customers and investors to exercise choice and influence
This is fairly aspirational and promotional to workers rights. It is likely to be more popular in the public sector. We think it will have more of a positive impact on recruitment than on consumer choice.
We find it interesting that the Conservatives have remained silent on the issue of tribunal fees, with critics highlighting that any additional rights offered to workers are meaningless if tribunal fees prevent them from enforcing these rights. The outcome of the January 2017 consultation on this issue is awaited but is expected to keep the status quo since it states that “What this review shows is that the introduction of fees has broadly met its objectives”. Additionally, the unions are sceptical about what has been promised as Theresa May has backtracked on her promises in the past. For example, in 2016 she called for workers and consumers to be represented on company boards but the proposals were later diluted. A previous plan for annual binding votes on executive pay was also abandoned.
As regards Labour, the main criticism of Jeremy Corbyn’s policies is that they are so far in favour of the worker and the Unions that they may adversely affect the economy and growth because of the burden they would put on businesses and employers. That must be put into perspective against other European nations who have high productivity, high employment, enhanced workers’ rights and thriving economies.
As employment lawyers, we are really interested in not only the political campaigns and what is being promised, but also how the winning manifesto will be implemented in due course, and how this will affect our clients – both individual workers, employees and contractors, and also businesses, the self-employed and agencies. The devil is always in the detail, and broad-brush aspirational manifesto statements are often fairly meaningless without further information about what exactly will be done and how.
Whatever the outcome of the general election on 8 June 2017, it will inevitably be affected by the coming Brexit and any new laws that will be passed on workers’ rights which will affect employers and employees to varying extents. We will be watching closely and advising our clients accordingly.
Aida Smajlovic, Jane Johnson and Emmajane Taylor-Moran are employment lawyers in the Employment Law Team at Gelbergs Solicitors. The Team advises on all employment and HR matters. We would love to hear your views, and debate the issues outlined above, so please leave a comment. Alternativley you can contact us at firstname.lastname@example.org, email@example.com or firstname.lastname@example.org