Employment
Prior to Labour's election win, we wrote about Labour's manifesto for employment law in Make Work Pay. The King of the United Kingdom's speech on 17 July announced a new Employment Rights Bill, which is expected within the first 100 days of the Labour government.
As anticipated, the Bill will include a number of employment law proposals, in line with those set out in the "Make Work Pay" manifesto. Businesses can expect the following changes:
- A ban on exploitative zero-hours contracts - giving workers a right to a contract that reflects their regular hours after 12 weeks, and ensuring that flexible workers receive reasonable notice of, and proportionate compensation for, shift changes.
- Fire and rehire - the King's speech re-stated Labour's commitment to replace the existing ACAS code of practice, which came into force just a few days ago, and has committed to providing "effective remedies" to employees subject to the practice.
- Unfair dismissal protection - from day 1 of employment, though employers will still be able to operate probationary periods.
- Statutory Sick Pay - removal of the lower earnings limit to make it available to all workers as well as removing the 4 day waiting period.
- Flexible working - requiring employers to accommodate flexible working requests as far as is reasonable, from the beginning of employment.
- Protections for new mothers - making it unlawful to dismiss a new mother for 6 months after her return from maternity leave, except in specific circumstances (not yet elaborated on).
- Enhanced trade union rights - lifting restrictions on union activity including ending minimum service levels and ensuring workers and union members have a reasonable route to access unions within the workplace, the clear goal being to increase union membership, activity and recognition.
- Establishment of a new "Fair Work Agency" - a single body to strengthen enforcement of workplace rights.
In addition, the King's speech announced a new Equality (Race and Disability) Bill which will give ethnic minorities and disabled people the full right to equal pay, making it easier for them to bring pay discrimination claims. The government also proposes to introduce mandatory ethnicity and disability pay reporting for employers with more than 250 employees.
Pensions
The Government has just announced a 'landmark' pensions review to 'boost investment, increase pension pots and tackle waste in the pensions system', the idea behind which being to encourage pension scheme investment in the UK economy and to boost the pension pots of DC savers. It will also look at unlocking the investment potential of the £360 billion Local Government Pension Scheme, as well as reviewing the £2 billion that is being used on fees in relation to it. The work will be in two phases, the first considering investment and the second (later this year) focusing on further steps to improve investment outcomes, increasing UK market investment and assessing retirement adequacy. Despite its inclusion in the King's speech being a surprise, the Pension Schemes Bill looks set to be a continuation of much of the work of the previous government, covering measures to, for example:
- help savers from losing track of small pension pots by providing for a consolidation vehicle
- ensure trust based defined contribution pension schemes deliver value
- consolidate the defined benefit pension scheme market though commercial superfunds.
Although the measures above will continue to shape the pensions market, the biggest impact on business is likely to be any change to auto enrolment - although this was in the pipeline under the previous Government, we have yet to hear of any concrete measures to move this forward under the new one.
