General Election 2015

 

A Critical Review of the Alternative Policies

Employment Law

With the general election rapidly approaching on 7 May 2015 we continue our look in detail at the main national political parties in their respective manifestos. Today in part 2 of our “Critical Review of the Alternative Policies” we analyse the Labour Party’s manifesto (If you would find it slightly more palatable you can watch the DCES Videocast instead):

Labour Party

The Labour Party has published three manifestos that deal with its proposals which impact on employment law. Labour has pledged to improve pay and job standards in the workplace, with an emphasis on reversing the “insecurity, low pay and undercutting we have seen in recent years” and putting an end to the “race to the bottom on wages and skills”.

The Labour Party’s policies in relation to employment law are set out below:

Employment Tribunal Reform

Perhaps one area that will be closely monitored by employers and employees in the run up to the election is Labour’s proposals to change the controversial employment tribunal fee regime. The Labour Party’s view on the fee system is clear: “The introduction of fees of up to £1,200 for employment tribunal claimants has failed. It represents a significant barrier to workplace justice, and has failed to raise any money”.

However, Labour’s plans about what it will actually do to address “insecurity and unfairness in the workplace” is slightly less clear. Although Labour has stated that it will abolish the tribunal fee system to ensure “workers have proper access to justice”, it remains unclear whether it plans to eliminate fees altogether, or introduce a new system where some (perhaps lower or reconfigured) fees will still apply. The Labour Party has made it clear that if it wins the general election, it will ask ACAS to oversee the reform process led by the CBI and the TUC.

National Minimum Wage and Living Wage

Labour has proposed to raise the National Minimum Wage to more than £8 an hour by October 2019 to bring it closer to average earnings. The Labour Party has also intimated that it might increase the maximum fine to £50,000 for employers who avoid paying the National Minimum Wage and close the loophole which allows agency workers to be paid less than the National Minimum Wage.

In addition, the manifesto states that the Labour Party will:

• Consider strengthening the enforcement of the National Minimum Wage by giving local authorities a role. The Labour Party has also said that it will consider extending the power of HMRC to recover unpaid holiday pay and non-payment of statutory sick pay and statutory maternity, paternity and adoption pay.
• Empower the Low Pay Commission to identify sectors that can afford to pay more, and lower productivity sectors with high levels of low pay, and set up industry-led taskforces to raise productivity and pay. Labour has proposed that the first sector taskforces would focus on social

Labour has also pledged to introduce new “Make Work Pay” contracts which will give tax rebates to companies that commit to pay the living wage in the first year of a Labour government. In addition, the Labour Party has stated that it will require publicly listed companies to report on whether they pay the living wage and use the government procurement procedures to promote payment of the living wage.

Zero Hours Contracts

The Labour Party’s policy on zero hours contracts states that it will “ban the exploitative zero hour contracts that have become the norm in some parts of our economy”. Labour has pledged that workers who work “regular hours” in their first 12 weeks of employment should be given a “regular contract”. The Labour manifesto considers that people who work regular hours for more than 12 weeks should be entitled to a regular contract.

The manifesto also refers to introducing new legal rights for workers on zero hours contracts, to stop employers forcing workers to be available at all times or cancelling shifts at short notice without compensation.

Agency Workers

Labour intends to remove the so-called Swedish derogation from the Agency Workers Regulations 2010. The Swedish derogation provides an exemption from the right to equal treatment on pay where agency workers who have a permanent employment contract with an employment agency continue to be paid a minimum amount between assignments. In practice, this means that agency workers could be paid at a lower rate than permanent employees and the Labour Party considers that some employment agencies are exploiting this “loophole” by paying agency workers the lower rate “even though they work regular shifts”.

The Labour Party would also ban employment agencies from “recruiting exclusively from abroad” and it has also pledged to introduce measures to improve “rogue” agencies who exploit their workers by cutting wages and conditions, by introducing a series of measures including a licensing system.

Apprenticeships

Labour’s plans to support young people at work include:

• Requiring every firm that wins a major government contract to offer apprenticeships for young people.
• Introducing a new Apprenticeship Guarantee giving all 18 year olds who achieve the “right grades” access to a high quality apprenticeship.
• Requiring large firms which recruit skilled workers from outside the EU to offer apprenticeships in the UK in return.

Equality

In relation to equality and human rights, the Labour manifesto states that a new Labour government would require large companies to publish their gender pay gap. Labour has also pledged to create a race equality strategy to ensure that public institutions (such as the police and the judiciary) are more representative of black and ethnic minority communities.

Although not mentioned in the manifestos, the Labour Party had previously made pledges to require companies with more than 250 employees to publish the average pay of men and women at each pay grade and also to introduce laws to give equal rights for self-employed individuals.

Other Employment Law Reforms

Labour have also set out plans to:

• Review TUPE.

• Reverse the “shares for rights scheme” that introduced employee shareholders in 2013.

• Guarantee a paid job for all young people who have been unemployed for one year and for all those aged over 25 who have been unemployed for two years. A refusal to take the job will result in loss of benefits.
• Reinstate liability on employers for third party harassment.
• Consider introducing compulsory profit-sharing legislation, requiring any company with more than 50 employees to set up a profit-sharing scheme in order to reward employees with a cash sum based on profits earned by the company.

On election day iteself we look at the Liberals, UKIP and the Green party.

Read more about the General election 2015: implications for employment law here.