Now that the new Johnson government is in power, what will be the future direction of travel in employment law and what should businesses do to prepare?
Brexit
EU law strongly shapes employment law in the UK. The UK is duty bound to implement EU directives and to respect decisions of the European Court of Justice. It is now virtually certain that the UK will leave the EU with the deal that Boris Johnson has negotiated. The current deal contains an implementation period through to 31 December 2020. During this time, the existing status quo will apply with the UK being bound to implement any new EU directives. Johnson has indicated that there is no appetite to extend the implementation period.
Once the implementation period expires, all EU law will be converted into UK law. However from that date the UK will no longer be obliged to implement any EU directives – for example the forthcoming directive on transparent and predictable working conditions (which members have until 2022 to implement).
The main issue will be the freedom of the UK to diverge away from EU law post exit – whether and to what extent this is likely to occur has been a matter of debate. Some commentators have predicated a gradual weakening of protections for workers with the demise of certain EU derived legal rights, for example those that have not found favour with the business lobby.
So will we expect to see a watering down of the duty to inform and consult on a TUPE transfer? Will the prohibition of changing terms and conditions after a transfer start to look shaky? Will there be a new approach to working time and holiday pay? Alternatively, many of the current EU derived rights such as the widespread protection from discrimination are seen by many as sensible and fair and it would be a bold government who might seek to interfere with these.
Election manifesto
In their manifesto, the Conservatives acknowledged, promisingly, that people cannot fulfil their potential if they do not have jobs that treat them with dignity and respect backed up by a promise that they would always prioritise the principle of fairness in the workplace. However, moving beyond the aspirational soundbite there was very little specific detail.
On pay, there were no proposals save a reference to increasing the income tax personal allowance and a reference to previous increases in the level of minimum wage and living wage. However, there are existing plans to continue to raise the National Minimum Wage predicated to rise to £10.50 per hours for workers over 21 by 2024.
On equality, there was a focus on ways to support working families, described as “radical”. These included making it easier for fathers to take paternity leave – but no detail. There was also a reference to extended leave for parents to take “neonatal care” and extended leave for unpaid carers – again no details. However, expect developments in these areas.
On flexible working the manifesto promised a consultation on making flexible working the default unless employers have good reasons not to. This would be an extension on the current position which still rests on an employee making an application, which can be relatively easily refused.
IR35 reform
The Conservative party have stated that they will review the proposed changes to the IR35 rules which are expected to come into force in April 2020, with the Chancellor Savid Javid stating that he wanted to ensure that the changes were “right to take forward”. With these changes set to force medium and large business who use contractors to consider carefully their possible employment and tax status, many will be hoping that these changes will be kicked into the long grass. However, the changes address a long standing concern of HMRC over perceived tax avoidance and are expected to generate significant tax revenue. It therefore seems sensible to continue to prepare for them.
Good Work Plan
The Conservative manifesto contained little about the Good Work Plan and it remains to be seen how many of the proposed reforms of gig economy and vulnerable workers’ rights will be taken up. However, the April 2020 changes widening the detail and scope of the duty to provide written details of employment terms and increasing the reference period in which to calculate holiday pay will go ahead.
The consultations on reasonable notice of working hours and compensation for the late cancellation of shifts concluded some time ago. Expect potential developments here.
Employment tribunals and enforcement
The government’s previous fee regime was declared unlawful by the Supreme Court, largely because of the chilling effect of such large fees on access to justice. However, there may be an attempt to reintroduce fees on a more modest scale.
On enforcement generally, there is likely to be an increased focus on a stronger level of state enforcement, particularly around perceived exploitative employers and vulnerable workers. The Conservative manifesto promised the creation of a new enforcement body to bring together the patchwork of existing state enforcement (such as HMRC and the National Minimum Wage) with a widened remit.
All in all it has been fairly quiet on new employment legislation in the previous few years. The government has been preoccupied elsewhere. However, expect that now to start to change.
