Reviewing the Queen’s Speech

Posted on: June 5th, 2015

What does the future hold for employers under the new Conservative government?

Here are four things we’ve learnt over the last few weeks from the world of politics:

  1. Never listen to pollsters
  2. Clapping is banned in the House of Commons
  3. The imperial state crown worn by the Queen during the opening of Parliament weighs 2lbs; and
  4. The Government’s legislative plans for the next Parliament.

To finish off our recent reviews of the parties’ manifestos, it seemed only fitting to take a look at the Queen’s Speech and what the future holds for employers, now that we can be a little more specific about what’s to come.

Whilst the Queen’s Speech itself is deliberately short on details, the Government releases a background briefing when the Speech is delivered, giving more information than the snippets the Queen gets to read out.

We know from the Speech and the briefing that the Government will:

  • Introduce a Full Employment and Welfare Benefits Bill. It is here that we find the detail behind the Government’s promise to create 2 million more jobs and 3 million more apprenticeships over the next 5 years. That said, “detail” is perhaps overstating it. What we learn from the briefing is that the Bill will introduce a “a statutory duty to report on progress towards our objective of achieving the highest employment rate in the G7” and “a duty to report annually on progress against meeting our target of 3 million new apprenticeships.” With my cynical lawyer’s hat on, I’m not entirely sure that a duty to report on job creation is exactly the same thing as actually creating jobs, but perhaps I’m just overly picky.
  • Introduce an Enterprise Bill which will bring in a cap on exit payments made to public sector workers, to end 6 figure pay offs. The devil will be in the detail on this one to work out what effect it will have on public sector workers outside of the relatively small group of very senior managers who normally receive the largest amounts of money.
  • Increase the personal tax allowance to ensure that anyone working 30 hours a week on the minimum wage will not pay income tax. This one is more for employees than employers but it was a manifesto promise which is being put into action, which is good to see. On the subject of tax, and looking at things from the employer’s point of view, the Government will also fix employer’s national insurance contributions for the next five years.
  • Increase the free childcare available for working parents of three and four year olds to 30 hours a week for 38 weeks a year (in other words the academic year). This does have repercussions for employers as some employees working part-time or flexibly may want to amend or increase their hours as a result of the additional childcare available. It also has repercussions for childcare providers as the government contribution does not cover the actual costs of childcare as it is, and so providing further hours will increase the shortfall which the providers are facing.
  • Introduce various new rules in relation to immigration. The Government is to introduce a new enforcement agency that will crack down on people who exploit migrant workers and there will also be a consultation on funding apprenticeships for British and EU workers by implementing a visa levy on businesses that use foreign labour. It’s not yet clear exactly what’s intended by this and so any business which relies heavily on foreign labour should watch this space for now. The Government is also going to introduce a clampdown on illegal working which apparently is going to enable the government to seize the wages paid to illegal migrants. This sounds good in principle but rather appears to be predicated on the assumption that all illegal immigrants receive payslips and wages by BACS and so there will be nice neat records of all the money that they have received from their employers. It also relies rather heavily on the Government being able to locate illegal migrants in the first place which, traditionally, has proven difficult for governments of all persuasions.
  • Introduce new laws in relation to trade unions taking industrial action. From an employment law perspective, this is one of the biggest changes to come in this Parliament. The Government wants to introduce a requirement that industrial action can only proceed if 50% of the members turn out to vote (and then a majority of those voting vote in favour of action). Going even further, in essential public services (health, education, fire and transport), not only will there need to be a 50% voting turnout, but also at least 40% of those entitled to vote must vote in favour of action. Interestingly, on election day last month only 24.4% of people entitled to vote, voted in favour of the Conservatives. Some might question why running the country requires less public support than negotiating collective terms of employment. I couldn’t possibly comment.
  • Hold an “in out” referendum on whether the UK should remain within the European Union. We of course knew that this was coming but until we know how the country decides, we won’t know how this is going to affect employers.

Finally, one change to employment law actually came into force at the end of May, rather than simply being announced in the Queen’s Speech. You may remember in the run up to the election David Cameron’s statement that exclusivity clauses in zero hours contracts had been banned. That wasn’t strictly accurate, as the change only came into force on 26 May 2015; however, now it is.

The newly introduced law provides that any provision of a zero hours contract that prohibits the worker from doing work or performing services under any other arrangement, or prohibits the worker from doing so without the employer’s consent, is unenforceable. So far so straightforward, right?

Well, the difficulty comes from how a zero hours contract is defined. The law says that a zero hours contract is one under which worker is only obliged to perform the work which the employer makes available and where “there is no certainty that any such work or services will be made available to the worker.”

If an employer issued a contract which specified that, say, 2 hours’ work a month would be guaranteed and anything else would be on an as required basis, this would fall outside of the definition of a zero hours contract and so exclusivity provisions would still be enforceable, despite the fact that the worker is on a zero hours contract in all but name.

Zero hours contracts of course received a lot of publicity in the run up to the election and the Government may feel that the recent change is enough to meet its campaign promises; however, many workers will continue to be disadvantaged by these arrangements and there is still the possibility that further publicity-driven changes will follow.