What does the Queen’s Speech mean for employment law?
Details of the government’s legislative programme were set out in today’s Queen’s Speech and the government has clearly identified its priorities for the new Parliament. The proposals were described by David Cameron as “a programme for working people” that would create full employment. Set out below is an overview of the measures likely to impact on employment law issues.
But it’s not just the Queen’s Speech. With very little publicity, certain parts of the Small Business, Enterprise and Employment Act 2015 came into force on 26 May including the ban on exclusivity clauses in zero hours’ contracts, see the end of this article for more details.
Full Employment and Welfare Benefits Bill
Measures on work are a key element of the legislative programme with the aim of achieving full employment.
The government wants to help businesses to create two million extra jobs and three million more apprenticeships during the course of the next Parliament. The increase in the number of apprenticeships is expected to be funded by the reduction in the benefits cap from £26,000 a year to £23,000. Ministers will be required to report annually on the progress of job creation and (in England only) to report on the target number of new apprenticeships. To encourage young people to “earn or learn” automatic entitlement to housing benefit for 18 -21 year olds will be scrapped.
The government aims to cut red tape for British businesses by at least £10 billion as a means of assisting job creation. In addition, a new Small Business Conciliation Service will be set up to help settle disputes between large and small businesses without the need for court action, over such issues as late payments.
In addition, a cap will be introduced on exit payments made to public sector workers to end six figure payoffs for the best paid public sector workers.
An interesting element of this Bill is that, as a measure to combat extremism, employment checks will enable employers to check whether an individual is an extremist and bar them from working with children.
National Insurance Contributions and Finance Bill
The government has pledged that workers on the national minimum wage working 30 hours will not have to pay income tax. In addition, legislation will be introduced to prevent any increase in income tax, VAT or national insurance for the next five years. The income tax threshold will also be increased to £12,500.
As a measure to help working parents, the government intends to double the entitlement to free childcare to 30 hours a week (for 38 weeks a year) for all children (aged 3 and 4) of working parents in England by 2017.
The government intends to introduce stricter labour market regulation to tackle illegal working and exploitation. Illegal working will be a criminal offence in its own right and the police will have powers to seize the wages paid to illegal workers as the proceeds of crime.
The demand for skilled migrant workers will be reduced through better training for British nationals and the increase in the number of apprenticeships.
For full details of the Immigration Bill see our separate article prepared by Allan Briddock, Partner and Head of our Immigration team.
Scotland, Wales and Northern Ireland Bills
There will be more devolution for Scotland, Wales and Northern Ireland generally and specific measures will be introduced to give the Scottish government the power to set income tax rates and bands and some welfare benefits.
Trade Unions Bill
Shortly after the general election, Sajid Javid, the new Secretary of State for Business, Innovation and Skills announced “significant changes” to industrial action law which is a priority for the new government. The Trade Unions Bill will provide for the following:
- An introduction of a statutory minimum 50% voting threshold of eligible union members in strike ballots and retention of the requirement for there to be a simple majority of votes in favour.
- In addition to the 50% voting threshold, for strikes affecting essential public services such as health, transport, fire services or schools, 40% of those entitled to vote must vote in favour of strike action.
- Time limits will also be introduced so that strike action cannot be called on the basis of ballots conducted much earlier.
- Measures will be introduced to tackle the intimidation of non-striking workers during a strike.
The government had previously described the changes as “proportionate and sensible”. The TUC on the other hand consider that the changes will make legal strikes “close to impossible”. This is because in many cases the turnout for voting is not particularly high and there may be difficulty in achieving the 50% threshold.
EU Referendum Bill
The public vote on EU membership is due to take place by the end of 2017 but recent reports suggest that it may be as early as autumn 2016.
Human Rights Act repeal delayed
The government’s intention is to replace the Act with a British Bill of Rights. However, the previous stated aim “to break the formal link between British courts and the European Court of Human Rights and make our own Supreme Court the ultimate arbiter of human rights matters in the UK” is conspicuously missing from today’s announcement.
The government had previously stated that repeal of the Act was a priority but the measure is controversial to say the least and may prove more difficult than anticipated. This is clear from today’s surprising development. The government announced that there will be a consultation exercise on the Bill of Rights as a first step rather than draft legislation to repeal the Act.
Repeal of the Act will raise complex devolution issues. It had been reported that that the Scottish Government would withhold legislative consent and concerns have also been raised in Northern Ireland that repeal of the Act could amount to a breach of the Good Friday agreement.
With today’s announcement, the government has set out details of its legislative programme for the new Parliament and many of these measures will impact on employers, workers and families in the months and years ahead.
As mentioned above, it’s not just the Queen’s Speech though. The Small Business, Enterprise and Employment Act 2015 was passed on 26 March 2015. With very little publicity, a number of significant employment measures came into force on 26 May including:
Zero Hours Contracts
Exclusivity clauses in zero hour contracts are politically unpopular because they prevent workers from doing work or performing services for another employer without their employer’s consent.
Section 153 of the Act inserts sections 27A and 27B into the Employment Rights Act 1996. It provides that exclusivity clauses in zero hours’ contracts are unenforceable against the worker. This means that workers will now have more opportunity to take on additional work and boost their income as a result.
Further measures may be introduced in due course to provide zero hours workers with protection against detriment on the grounds that the worker has done work/performed services under another contract or arrangement.
National Minimum Wage Enforcement
The maximum financial penalty for underpayment of the NME increases to £20,000 per worker.