The 4th July is fast approaching and as all political parties are hot on the campaign trail, many business owners will be wondering exactly what this could potentially mean for them as employers.
Niel Cope, CEO of award winning People Matters HR, has put together an overview of what the three main Political parties are pledging to change after the General Election.
This guide is intended to give a summary, yet exercise a note of caution as things may change a little before 4th July, especially as the party manifestos have not yet been published in full. For now, all we can do is make educated guesses about how this will affect employers.
The Labour Party have voiced the most radical pledges to change employment law of the three parties and pledge to take this Bill to Parliament within 100 days of getting into power if they form a Government.
Reforming employment law status:
• There are currently three types of employment status: employees, workers and self employed, all of which have different rights.
• Labour plan to collate employees and worker in to worker – both with the same rights and protections.
• Self employed status will remain
Equality & Respect:
• Labour pledge to close gender, ethnicity, and disability pay gaps; permit equal pay comparisons across employers where comparable work is carried out; and publication of ethnicity pay gap will be mandatory for firms with more than 250 staff.
• Labour will require employers to create and maintain workplaces and working conditions free from harassment, including by third parties.
Increasing wages:
• A plan to increase in National Minimum Wage to at least £10 per hour for all workers which will be continuously reviewed in line with the cost of living.
What does this mean for the employer?
• That could mean at today’s rates a first-year apprentice, or a worker under 18 will be on £19,500 pa. That’s a rise of £6,825, which the employer will need to find.
• Employers will have to plan for a £2,730 increase for all 18 to 20 year olds. • Employers also need to factor in the contributing pension 3% and 13.8% National Insurance. There don’t seem to any proposals to change this.
• At the current levels with a £12,000 tax threshold all workers will pay tax to HMRC and they will all be subject to pay 5% pension contributions, we haven’t seen a suggestion to change that.
We advise that business owners need to plan and talk to your Accountant and IFA.
Unfair dismissal rights from day one:
Currently, you must be employed for two years to claim full Employment rights.
• Labour proposes day-one rights: Remove qualifying periods for basic rights like unfair dismissal, sick pay, and parental leave so they become day-one rights.
• All workers will be able to claim unfair dismissal from first day.
• Strengthen rights: strengthen existing rights and protections, including for pregnant workers, whistleblowers, workers made redundant, and workers subject to TUPE processes.
• Proposal to lift the cap on compensation for unfair dismissal.
What does this mean for employers?
While we don’t know for sure, this COULD mean the following significant changes for employers:
– Potentially no probation periods
– You might need to follow capability procedure for performance issues, such as sickness absence and work performance, from the first day. Meetings, performance action plans to improve performance, documented reviews by line manager, step by step capability process to try to improve the workers performance which has to be followed, documented and shared.
You may need to follow disciplinary process for conduct issues from day one. This could include:
– Thorough investigation, right to be accompanied by a Trade Union official or work place colleague at meetings and interviews
– Notes taken at all meetings
– Letters of invitation to meetings
– Preparation of a written management case shared with worker in advance of formal disciplinary meeting,
– Formal disciplinary meeting with the investigator presenting their case,
– A note taker, the worker and their rep, an HR advisor if required, a more senior manager to make the decision,
– A formal sanction which will probably have to fit in with your disciplinary process, so verbal warning, written warning, final waring or summary dismissal if it’s a gross misconduct, outcome letters to communicate this with a right of appeal.
– Rinse and repeat for the appeal hearing.
Statutory sick pay from day one
Currently employees wait three days before they receive statutory sick pay.
• The pledge is that all workers and self- employed people will be paid SSP from day one of the absence. Including those currently excluded because of low pay.
• Employers pay SSP not the Government.
• It appears that Self Employed people will pay themselves ssp.
Banning zero hours contracts
• Zero-hours contracts and contracts without a minimum number of guaranteed hours will be banned.
• Anyone working regular hours on a Zero hours contract for 12 weeks or more will have the right to a regular contract.
• This will protects workers from unpredictable working patterns.
What does this mean for employers?
• How do you predict the demand on your business in certain sectors, for example hospitality/Care/Cleaning/Events etc
• Many people, such as students, like the flexibility that zero-hours contracts provide which could impact on recruitment
• We may have to do contracts with minimum hours per week/month – we wait to hear the guidance.
• All workers will be entitled to full employment rights from day one.
Additional pledges
The right to “switch off”
• Workers will have the right to disconnect from work and not be contacted by their employer outside of working hours.
Banning fire and rehire
• This is the practice of dismissing employees who refuse to agree to contractual changes and offering to re-employ them on the new terms. Labour pledge to improve information and consultation procedures instead.
Tribunal claim time limits
Currently employees have three months (minus one day) to bring most claims to an employment tribunal. • Labour will extend limitation periods, potentially to six months (TBC).