Following last week’s Conservative Party win at the general election, it is anticipated that certain employment laws will be reviewed and revised. The changes that are most likely to be considered are to pensions, immigration, IR35 and employee rights, all of which could have notable implications for employers.
Potential Conservative Party employment changes
Prior to their election win, the Tories, in their manifesto, stated that they were looking to re-introduce the Pension Schemes Bill which will give additional powers to The Pensions Regulator and mean that companies who do not protect their defined benefit schemes will be penalised for not doing so.
These penalties include regulatory and criminal sanctions on corporate transactions, restructurings, re-financing and dividend payments for directors of corporate sponsors of these schemes and parent companies of organisations with defined benefit schemes.
The uncertainty caused by Brexit since the referendum in 2016 has meant that many businesses across the country have struggled to employ new staff and retain existing staff, particularly those from outside of the UK.
Whilst it is not yet known what immigration policy the Conservative Party will adopt and implement, it will certainly have an effect on employers and their businesses. Various experts have commented that an approach that focuses on workers’ salary expectations and/or perceived skill levels will not work and could have a detrimental impact on economic growth and productivity for the UK. Instead, experts are suggesting an approach which looks to welcome and values prospective workers who are thinking of relocating to the UK.
Additionally, the Conservative Party are being encouraged to provide EU citizens, who already reside in the UK, with automatic rights so that they are able to stay here.
Employment rights and protections
Included in the Tories’ manifesto were additional commitments to employment law changes which would provide workers with greater rights, including:
- An increase in the National Living Wage to £10.50 per hour by 2024. Furthermore, by 2024 the age limit for the National Living Wage will be incrementally lowered to those who are 21 years plus (23 years plus in 2021);
- New rights for parents in relation to child sickness and paternity leave, particularly in respect of extended leave for neonatal care, making it easier for fathers to take paternity leave and extended leave for carers;
- Flexible working environment to be the default position for companies;
- The right for workers to request a more predictable working contract; and
- The creation of a new single state enforcement body to tackle non-compliance in the labour market.
The Conservative Party in their manifesto also referred to a review of the proposed changes to the IR35 rules. Many contractors put in place a corporate structure between them and the company to whom they are providing services to, in order to prevent a direct contractual link between them and the company, and thus avoid them being classed as an employee or worker. IR35 is legislation that permits HMRC to obtain supplementary payment in cases where such a structure exists and a contractor is essentially an employee but their role is not formally defined as this.
Many have said that the current system does not work for business relationships between employers and contractors, clients and agencies, and needs to be revised to help support self-employed workers.