Queen's Speech 2017 – what is the impact on Employment law?
In the Queen's Speech today, many of the Conservative Manifesto pledges relating to Employment law have been dropped, and even those that remain are mentioned in extremely vague terms.
Amid the controversy of the hung Parliament and continuing uncertainty over whether the Conservatives will be able to reach a suitable agreement with the DUP to enable them to pass legislation, the Queen's Speech went ahead just two days after it was initially planned. It is proposed to cover legislation for the next 2 years, as the Government has already announced that there will be no Queen's Speech in 2018.
Ahead of the Speech this morning it was insisted by former chief whip Mark Harper that it was a "big ambitious package, but one which we bring forward with a degree of humility." Many suggested it would be very light on legislation other than Brexit (out of 27 proposed Bills, 8 are related to Brexit in one way or another), but there were some matters of interest to employers – although, perhaps unsurprisingly, far less than were outlined in the Conservative Manifesto.
The Repeal Bill
The Repeal Bill (apparently no longer the "Great" Repeal Bill) was the first Bill referred to in the Queen's Speech, and of course it was announced several months ago with a White Paper published in March. Interestingly, one of the specific points in the DUP's Manifesto was that it wanted the jurisdiction of the European Court of Justice ended and greater control over our laws restored.
Although by repealing the European Communities Act 1972, the Repeal Bill is intended to end the application of EU laws and jurisdiction of the European Court of Justice (ECJ) over our laws (which in itself will be subject to the Brexit negotiations – for example the EFTA Court recognises and follows the decisions of the ECJ in certain areas), it will in fact convert EU law into UK law as it stands on "Brexit day". It will also create powers for secondary legislation to be made (meaning legislation by Ministers that may not always require the approval of Parliament) to enable corrections to laws that would otherwise no longer operate appropriately.
Importantly the Bill will also give previous decisions of the ECJ the same status as rulings of the Supreme Court. This approach will mean that the rights of workers would continue to be available in UK law at the point at which we leave the EU – and, for example, there is not likely to be a change in the ECJ recent rulings as to what must be included in holiday pay.
The Queen's Speech did include a specific reference to the protection and enhancements of workers' rights, and interestingly the DUP's Manifesto also pledged the "maintenance of the present workers' rights framework and for the UK to lead the way in improving this framework…" What this might mean were there to be a different leader of the Conservative party further down the line remains to be seen.
National Living Wage and workers' rights
As stated in the Conservative Manifesto, the Queen's Speech confirmed as a non-legislative measure that the National Living Wage will increase to 60% of median earnings by 2020 (currently forecast to be £8.75) but, after that, only by average earnings growth. Increasing the NLW and taking action against employers who failed to pay staff the NLW was also a pledge in the DUP Manifesto so is one of the few employment law measures with clear support from both parties.
The Conservative Manifesto addressed the so-called "gig economy" as one of its first issues, and the Queen's Speech briefing paper also refers to the ongoing Matthew Taylor Review of Employment Practices in the Modern Economy which is due to be published in the next few weeks: "We want to make sure employment rules and rights keep up to date to reflect new ways of working... We recognise the importance of being open to new and innovative ways of working – and having a skilled and flexible workforce is part of what makes the UK an attractive place to do business. But it is also crucial that workers receive a decent wage and that people working in all sorts of jobs are able to benefit from the right balance of flexibility, rights and protections."
What is interesting, however, is that the announced National Insurance Contributions Bill is specifically stated not to cover discussions about Class 4 (self-employed) National Insurance Contributions (NICs). These were the increases in NICs for the self-employed which were announced in the Spring Budget 2017 and then later retracted because of the 2015 Conservative Manifesto. The 2017 Conservative Manifesto by contrast did not rule out income tax and National Insurance increases – potentially paving the way for the Taylor Review to propose changes around self-employed tax and NIC differences, which in Matthew Taylor's view is the driver of unfair practices in the gig economy. However, without corresponding changes in tax and NIC legislation, it is now unclear whether the Taylor Review will be given the scope to make any substantive changes in this regard.
While the Conservative Manifesto set out a number of new family friendly measures, the only mention in the Queen's Speech today (again as a non-legislative measure) was the pledge to make "further progress" in tackling the gender pay gap and discrimination against people on the basis of their race, faith, gender, disability or sexual orientation.
The Speech briefing paper then refers mostly to past measures such as gender pay gap reporting and shared parental leave, followed by action on funding, support and the commissioning and reviewing of reports, mostly unrelated to the workplace. The most concrete measure announced appears to be to "work with Sir John Parker, Chairman of Anglo American Plc., to improve the ethnic diversity of boards by 2021."
At present there appears to be no further plans to ask large employers to publish information on the pay gap for people from different ethnic backgrounds, as pledged in the Conservative Manifesto (and mirrored in the Labour Manifesto). Interestingly in Northern Ireland, when similar gender pay reporting regulations are introduced later this year (because the Equality Act 2010 does not apply to Northern Ireland), the regulations are expected to require data about ethnicity and disability, as well as make provision for potentially a hefty fine for non-compliance.
It is not clear whether the "further progress" in tackling the gender pay gap might include new enforcement powers in The Equality Act (Gender Pay Gap Information) Regulations 2017 introduced in April. At present a note in the explanatory memorandum of the Regulations that they could be enforced by the Equality and Human Rights Commission is unlikely to be legally effective without further changes to the law. Certainly there is no further mention in the Queen's Speech briefing paper of future proposals regarding the gender pay gap.
It remains to be seen whether some of the other family-friendly pledges in the Conservative Manifesto have now been officially dropped, such as:
- A statutory right to carer's leave (previously thought to be unpaid leave for up to a year)
- A statutory right to bereavement leave for parents who lose a baby (which had in fact been before Parliament previously as a private member's Bill)
- Improving the take-up of shared parental leave and helping companies provide more flexible work environments that help mothers and fathers to share parenting (with the exception of the Armed Forces where a specific Bill will address flexible working)
- Supporting employers to take on parents and carers returning to work after long periods of absence, and back specific schemes in the public sector – so called "returnships" – although there is a reference to the funding allocated to returnships previously announced in the Spring Budget this year.
Disability and mental health reform
The Queen's Speech included a pledge to reform mental health legislation (working towards a new Mental Health Act) and ensure that mental health is prioritised in the NHS in England (England only is mentioned, because health is a devolved matter for other parts of the UK). It is, however, described as a non-legislative measure (i.e. there is no Bill proposed as yet).
The Conservative Manifesto was published just after Mental Health Awareness Week. Mental health has been a key focus for Theresa May not just in the Manifesto but beginning with her first speech as Prime Minister, followed by a speech earlier this year about the extent and stigma of mental ill-health where she unveiled a number of plans to tackle the issue including changes to the Mental Health Act. The pledge in the Conservative Manifesto was to "transform how mental health is regarded in the workplace".
The briefing paper on the Queen's Speech does refer to the Manifesto, but waters it down somewhat, stating that considerations will include "ensuring that those with mental ill health are treated fairly, protected from discrimination, and employers fulfil their responsibilities effectively".
With such vague language, it remains to be seen what will change in this regard. There were two key measures specified in the Conservative Manifesto relevant to employers:
- The amendment of health and safety regulations so that employers provide appropriate first aid training and needs assessment for mental health, as they currently do for risks to physical health.
- An extension of protections under the Equality Act 2010 for mental health conditions that are episodic and fluctuating.
The second proposal is more controversial. Currently, conditions need to be long-term, lasting (or likely to last) 12 months or more to satisfy the definition of disability. In many cases those who have had a long-term mental illness in the past will already be protected from disability discrimination since the definition of disability includes past disabilities. In addition, an impairment includes one where the "substantial adverse effect" on day to day activities is "likely to recur". Therefore, many substantial episodic and fluctuating mental impairments will already be covered. However, what of the person who from time to time suffers from bipolar disorder or depression? According to the Mental Health Foundation, nearly two thirds of people have experienced a mental health problem – and this rises to 7 in every 10 women. Only 13% of people report living with high levels of good mental health. Would such changes to the Equality Act 2010 have encompassed all such staff, and would it place an almost impossible burden on employers? With the vagueness of the wording in the Queen's Speech and briefing paper, employers may not need to worry about this at all.
Another pledge not mentioned at all in the Queen's Speech is the proposal to give a holiday on employers’ NICs for a full year for businesses employing someone with a disability, those with chronic mental health problems, those who have committed a crime but who have repaid their debt to society, and those who have been unemployed for over a year. In addition the Government pledged to get 1 million more people with disabilities into employment over the next ten years, by harnessing "the opportunities of flexible working and the digital economy" and giving employers as well as unemployed disabled claimants advice and support.
Immigration featured heavily in the Conservative Manifesto, unlike other issues where it had been surprisingly light on detail. Amid recent speculation of a watering down of immigration as a Government priority, Damian Green insisted this morning that "We still think we need immigration at sustainable levels. That was clearly one of the messages behind the Brexit vote".
The Immigration Bill announced today in the Queen's Speech is stated to "allow the Government to end the EU’s rules on free movement of EU nationals in the UK and make the migration of EU nationals and their family members subject to relevant UK law once the UK has left the EU, whilst still allowing the UK to attract the brightest and the best."
Whilst the Repeal Bill will initially preserve immigration law, the intention is to be able to repeal EU law on immigration following Brexit, with the result that EU nationals would be subject to the current immigration rules which apply to non-EU nationals.
No mention is made of the original Conservative Manifesto pledges which included:
- Maintaining the longstanding target to reduce immigration to the “tens of thousands”. Annual net migration is currently 273,000.
- Increasing the earnings thresholds for people wishing to sponsor migrants for family visas and impose higher requirements on students wanting to work in Britain after their studies.
- Asking the Migration Advisory Committee to make recommendations on how the visa system can be better aligned with industrial strategy. The Government envisages reserving significant numbers of visas for workers in strategically important sectors, such as digital technology.
- Doubling the recently-introduced immigration skills charge levied on companies employing migrant workers from outside the EU, to £2,000 a year by 2022.
Data Protection Bill
A new Data Protection Bill will be introduced to replace the Data Protection Act 1998. This will be to implement the provisions of the EU General Data Protection Regulation (GDPR) which comes into force in May 2018, but which the UK had already pledged to preserve post-Brexit to enable continued trading and data sharing. As employers and HR professionals will already know, it will be vital to make sure that practice and procedure on processing employee data complies with the GDPR, including employment contracts reflecting the new regime.
However the Data Protection Bill will also be to protect the personal data of young people and require major social media platforms to delete information held about people at the age of 18. This could prevent employers from making recruitment decisions based on a young person's previous social media activities.
With Brexit dominating the legislative timetable, it was clear that changes to Employment law were going to be fairly low on the agenda. However, it is a little surprising that some of the less controversial and more easily achievable Employment law pledges, such as the right to a carer's leave, appear to have been dropped completely. Although the uncertainty of Brexit is a worry for business, the message in terms of Employment law over the next couple of years, is that any big changes are unlikely. After a raft of recent changes in quick succession, that will come as a relief to many employers.