General Election 2017 Employment Policies

Britain returns to the polls on 8 June 2017, but what do each of the main political parties propose for employment policy?

The Conservative Party

Described by Theresa May as the “greatest expansion in workers’ rights by any Conservative government in history”, the Conservative party manifesto promises:

  • to retain UK worker rights, post-Brexit
  • to continue the Taylor review into employment status and introduce better protections for ‘gig’ economy workers
  • to protect worker pensions better, by giving pension schemes and the Pension Regulator more powers, to prevent mergers or takeovers which may threaten pension scheme solvency, in extreme cases, and giving the Pensions Regulator the power to severely financially punish those who have mismanaged pension funds and left them under-resourced
  • working parents 30 hours of free childcare for three and four year olds, and more programmes to help people return to work after a career break. The Conservative party also aims to encourage more workplaces to offer flexible working and more parents to use Shared Parental Leave
  • to give workers a statutory right to a year’s unpaid leave to care for a relative and to grant a two-week period of paid leave for parents whose child has died
  • to give workers the right to request leave for training
  • to provide targeted support for 18-24 year olds to get them into work
  • to allow larger organisations to pass Apprenticeship Levy funds to smaller organisations in their supply chain
  • to extend pay gap reporting for large employers, to cover race
  • to extend the Equality Act to cover discrimination on grounds of mental health, even if this is of short term duration and would not usually qualify as disability discrimination
  • to get one million more disabled people into employment in the next ten years and give employers support to increase flexible working and digital technology to enable this. Those who have specific disabilities and who are seeking work, are being promised tailored support
  • to incentivise employers to take on people who may otherwise find it difficult to find paid work, e.g. those with a spent criminal conviction, by giving employers a year’s holiday from employer’s National Insurance Contributions
  • to require listed companies to take into account employees’ interests at board level by allowing employees to request information about the future direction of the company they work for, within sensible limits
  • to strengthen shareholders’ voting powers on executive pay and to require listed companies to publish pay ratios between executives and other staff
  • to increase the National Living Wage to 60% of median wages by 2020 and “in line with average earnings by 2022”
  • to double the Immigration Skills Charge to £2,000 a year, for companies employing migrant workers, to encourage businesses to train UK staff.

The Labour Party

The Labour Party’s proposals for employment policy aim to end the “rigged economy” and are largely contained in its 20 point plan. A summary of this and other employment policy pledges include:

  • banning zero-hours contracts, unpaid internships and umbrella companies and give those employees contractually entitled to short hours, but who regularly work more, a right after 12 weeks to a contract reflecting the longer hours regularly worked
  • abolishing the Swedish derogation loophole in respect of the Agency Worker Regulations, which currently allows an employer not to pay agency workers equally, under certain circumstances. Employment agencies and end user employers would be jointly responsible for enforcing agency worker rights
  • granting equal rights to all workers (not just employees) from the first day of employment, and shifting the burden of proof for employment status, so it is assumed a worker is an employee unless the employer can prove otherwise
  • raising the minimum wage to the same level as the living wage, which is expected to be at least £10 per hour by 2020 and apply to all workers over 18, not just those over 25
  • ending the 1% pay cap on public-sector pay and ensuring public workers receive pay rises in line with inflation
  • introducing maximum pay ratios of 20:1 in the public sector and for companies bidding for public contracts
  • introducing an “excessive pay levy” on salaries above £330,000. The Labour Party promises it will not raise income tax for those earning less than £80,000 but they would lower the threshold for the 45p additional rate to £80,000 and reintroduce the 50p income tax rate on earnings above £123,000maintaining the apprenticeship levy, but with more flexibility for employers on how the levy is used. The Labour Party will ring-fence more than £400 million from the levy, for small businesses and will require annual reporting on apprenticeships to ensure high quality. Targets would also be set to increase apprenticeships for the disabled and other disadvantaged groups
  • abolishing the 2014 amendments to the Transfer of Undertakings (Protection of Employment) Regulations, which narrowed the protection of employees, during a takeover of a business
  • extending paid paternity leave to four weeks and maternity pay would be extended to 12 months
  • abolishing Employment Tribunal fees
  • repealing the Trade Union Act, and introducing collective bargaining on worker rights through unions in all different sectors. The Labour Party is committed to guaranteeing unions the right to access workplaces and would only award public contracts to companies that recognise trade unions
  • introducing legislation to make sure employers recruiting from abroad do not undercut UK staff
  • introducing 4 new public holidays, in addition to the 8 current bank holidays, to mark all 4 national patron saints’ days
  • protecting the “triple lock” on state pensions, so that they rise in line with wages, inflation, or by 2.5% – whichever is highest. The Labour Party will also amend the Takeover Code to make sure businesses have a plan to protect pensions and workers
  • making redundancy more complex for employers, in line with European redundancy models, with particular focus on ensuring redundancy against women is not unfair;
  • conducting a public inquiry into blacklisting
  • providing equalities representatives with statutory rights
  • bringing back protection against third-party harassment
  • creating a civil enforcement system to make sure organisations comply with gender pay auditing, introducing ethnicity pay gap reporting and creating a Ministry of labour to ensure that all rights are enforced
  • all existing EU law rights being preserved following Brexit. The Labour Party has also pledged that rights for EU nationals living in Britain and reciprocal rights for UK citizens living in the EU will be protected. The Labour Party has acknowledged though, that free movement of workers is unlikely to be possible, once the UK leaves the EU.

The Liberal Democrats

The Liberal Democrats’ proposed employment policies include:

  • abolishing the public sector pay cap and Employment Tribunal fees
  • creating a ‘good employer’ kitemark, covering areas such as paying a living wage, avoiding unpaid internships and using name-blind recruitment (the latter of which would be mandatory for public sector employers)
  • running an independent review into setting a genuine living wage for all sectors
  • requiring large employers to publish the number of staff earning less than a living wage and pay ratios between top and median pay
  • introducing pay gap reporting in relation to gender, race and sexual orientation
  • encouraging large listed employers to give employees the right to request shares and changing company law to allow German-style two-tier boards, including employees
  • aiming to double the number of businesses hiring apprentices and the Liberal Democrats will support the growth of sector-led national colleges for vocational education
  • making sure that apprenticeship levy monies are all spent on training
  • updating employment rights to better suit modern working practices, including the gig economy
  • introducing a right for those on zero-hours contracts to request a fixed contract, and possibly introducing a right to request more regular working patterns, after a qualification period
  • making flexible working, paternity and shared parental leave a right from day one of employment and encouraging more employers to offer flexible working;
  • introducing an additional month of shared parental leave;
  • extending free childcare places to all two year olds to assist working parents
  • extending the Access to Work programme aimed at getting disabled people back into work
  • campaigning to keep the UK in the Single Market, preserving freedom of movement within the EU and failing that, campaigning for the UK to guarantee the rights of EU citizens living in the UK and to make sure employment rights stemming from the EU are not undermined
  • a 1% rise in income tax, to ring-fence an extra £6 billion of funding per year for the NHS.

The Green Party

  • The Green Party believes that “the introduction of a minimum wage of £10 by 2020 is a necessary step towards tackling inequality and poverty”
  • the Green Party would also abolish zero hours contracts and would work towards a four day working week (maximum of 35 hours)
  • the Green Party proposes that 40% of all company boards should be women, to assist in ending the gender pay gap
  • the Green Party would introduce a ‘wealth tax’ for the highest 1% of earners and introduce a higher rate of corporation tax for large business. The cap on employee national insurance contributions would also be removed by a Green Party government.

The UK Independence Party

  • UKIP has said it will cut net migration to zero within 5 years by implementing a visa system for skilled workers and students and banning migration for unskilled and low-skilled workers.

The Scottish National Party

  • The SNP have said that it will expand free childcare to cover 1,140 hours per year by 2022, (around 25 hours per working week) and make sure all those staff helping to deliver this target are paid at least the living wage
  • The SNP would not allow public procurement contracts to be awarded to companies engaging in blacklisting or exploitative zero-hours contracts.

Plaid Cymru

Plaid Cymru’s policies relating to workers include:

  • training and recruiting 1,000 more doctors and 5,000 more nurses for the Welsh NHS, over the next decade
  • Welsh-specific visas
  • free full-time nursery places for all 3 year olds, to help working parents;
  • introducing a “real, independently verified living wage”
  • protecting up to 200,000 jobs by maintaining trade with Europe, and guaranteeing the rights of Europeans currently living and working in Wales, post Brexit.

There are clearly a lot of differences between the employment policies of the main political parties and the way in which your business will operate may well be very different depending on the result of the General Election. We will update you with the actual policies being introduced by the next government after the General Election, as and when they are officially announced. In the meantime, if you have any questions about employment law or policy, please do not hesitate to contact me.

What’s Changing in Employment Law?

Every year in April, a number of changes are made to Employment Law. As a manager or an employer, it is really important that you know about these changes and how they might affect your staff and your business. If you missed our recent workshop, where we talked through many of the changes, here is a summary of those that affect how much you pay your staff and when.

National Minimum Wage – from 1 April 2017 these have increased as follows:

  • Workers aged 25 and over – £7.50
  • Workers 21 to 24 – £7.05
  • Workers 18 to 20 – £5.60
  • School age to 18 – £4.05
  • Apprentices under 19 or in their first year – £3.50

If you need to review your pay rates, you should identify eligible workers and check the new rates which are now applicable. Work out the gross pay received during the pay reference period, including bonuses and commission but not overtime or tips. Calculate the number of hours worked, excluding rest breaks and travel to work. You will then need to pay any arrears immediately and increase the worker’s pay to the minimum wage level or higher. Make sure that you keep records of changes in pay, as it your responsibility, as the employer, to prove payment. HMRC have the right to check at any time, to ask to see records and to order payment of arrears.

Statutory Redundancy Rates – the maximum week’s pay for the purposes of calculating a statutory redundancy payment increased to £489 on 6 April 2017. The maximum number of years of employment that can be taken into account is 20. From 6 April 2017, the maximum statutory redundancy payment that an employee will be able receive is £14,670.

Statutory Maternity Pay – from 2 April 2017, statutory maternity pay after the first six weeks of maternity leave increased to £140.98 (or 90% of average weekly earnings if this figure is less than the statutory rate.) The lower earnings limit also increases to £113 in April 2017.

Statutory Paternity Pay – Statutory paternity pay increased to £140.98 (or 90% of average weekly earnings if this figure is less than the statutory rate) on 2 April 2017. The lower earnings limit also increased to £113 in April 2017. Paternity pay is available to a person of either sex in an adoption situation, and to the spouse, civil partner or partner of either sex of the biological mother of a child.

Shared Parental Leave – Statutory shared parental pay increased to £140.98 (or 90% of average weekly earnings if this figure is less than the statutory rate), on 2 April 2017. The lower earnings limit also increased to £113 in April 2017. The shared parental leave and pay depends on the amount of maternity leave and pay that the mother takes, and the amount of shared parental leave and pay that the other parent takes. Shared parental leave and pay is also available in an adoption situation. Each parent claims shared parental leave and pay from his or her own employer. Parents must satisfy individual eligibility requirements and joint eligibility requirements.

Statutory Sick Pay – the rate of statutory sick pay increased to £89.35 a week on 6 April 2017. The lower earnings limit also increased to £113 in April 2017. If the employee’s average earnings before deductions, such as tax and national insurance, are equal to or more than the lower earnings limit (currently £112), they will be entitled to £88.45 a week. Although the rate of statutory sick pay normally increases on 6 April, the rate did not rise on 6 April 2016. This rate has therefore applied since 6 April 2015.

Gender Pay Gap Reporting – from 6 April 2017, companies and employers in the private and voluntary sectors with 250 or more employees are required to publish gender pay gaps. These must be published annually on the organisation’s website and uploaded to a Government-sponsored website.

Apprentice Levy – on 6 April 2017, this levy was introduced, to be paid via PAYE. The levy will be 0.5% of an employer’s pay bill, although employers will receive an allowance of £15,000 to offset against payments. It applies to employers with a pay bill over £3 million. The Digital Apprenticeship Service will distribute funds raised by the levy. The levy is being used to fund the cost of apprenticeship training and assessment through co-investment, up to 90% of agreed price. Employers with 50 or fewer employees can receive 100% of the cost if they take on apprentices aged 16-18 (or 19-24 who have previously been in care, in local authority education or on a health and care plan.)

A number of other changes are being made to Employment Law this spring, which we’ll cover in some of our blog posts, which you can read here. If there are any issues that you would like to know more about, please contact us for a confidential chat. Call us on 0118 940 3032 or email sueferguson@optionshr.co.uk.

How Can You Improve Employee Performance for Free?

Employee performance is something that I am asked about on a regular basis. How do you manage it? What’s the best way to improve it? To help answer these questions and any specific ones that you have, I am running a free webinar at 11am on Wednesday 31 May 2017. It will last for around one hour, to give you plenty of time to ask any questions that you have. Book your place online now so that you don’t miss out. Click here to reserve your place.

Two-Thirds of Small Businesses Risk Being Fined Through Lack of HR Resources

A recent report shows that time-poor small businesses are struggling with the burden of HR administration, leaving themselves at risk.

Only 25% of small business owners polled feel up to speed on matters to do with employee rights and employer regulations. As little as 37% of SME (small-to-medium sized enterprise) owners have a good understanding on all matters to do with employee rights and employer regulations and keep updated on regulatory changes on an ongoing basis.

New research from Jobandtalent has uncovered a worrying lack of understanding around employment regulations amongst small businesses in the UK. A lack of HR resources and expertise is leading to risky hiring practices in this market, the report finds.

The report follows the release of official data from the pensions regulator, which revealed that the number of employers being fined up to £10,000 a day for not complying with the new regulations on workplace pensions, has shot up by 300% in three months.

The survey of 500 SME owners was carried out by OnePoll and was commissioned by Jobandtalent, an online job marketplace, which matches SMEs with local talent. The research found that owners of SMEs are most at risk due to a lack of dedicated HR expertise or resource.

According to the Jobandtalent survey, a quarter of SME owners admitted that while they understand current regulation, they struggle to keep up with changes. Worryingly, 12% felt they have limited to no understanding of present employment regulations – let alone changes in the future. This represents a clear risk to the business.

When questioned about the hiring process and time to hire new talent, two-thirds (67%) of the 500 SME owners questioned revealed that they do not have anyone dedicated to finding talent and hiring or HR. Of those businesses, the vast majority (77%) answered that the responsibility for hiring fell to the business owner.

Is your business at risk, because you don’t have time to keep up with all the changes? Don’t take the risk – if you have a question about HR or Employment Law, contact us now and we talk about what you need to do. Call us on 0118 940 3032 or email sueferguson@optionshr.co.uk.

Are You Ready for the Next Employment Law Changes in April 2017?

Reserve your place on our next workshop here.

What are the next changes that will be made to Employment Law and how will they affect your business and your staff?

On 30 March 2017 we will hold the next of our regular Employment Law Update workshops. We do this twice a year, when the changes are approaching, so the next one will be in October 2017.  If you’re a business owner or manager it’s important you understand how they affect you and your employees.

This workshop is your chance to ask your questions in a confidential, friendly session, which is always attended by people who, like you, are looking for ways to keep up to date. Share your issues and hear how other people deal with the issues you have to deal with in your business.

The workshop will be held at Hennerton Golf Club in Wargrave, Berkshire, at 9.30am for a 10am start, finishing at 1pm. The cost is just £20 +VAT and includes plenty of tea and coffee! Online booking is available now.

Someone who attended a previous workshop said:

“I thought the workshop would be full of other HR people who knew more than me – but it wasn’t like that at all. I learnt a great deal from the Employment Law update and it was really useful talking to other people to hear how they dealt with similar issues to me.”

Book your place online now and we look forward to seeing you on 30 March.

How Will the Apprenticeship Levy Affect Employers?

The apprenticeship levy, which the Government hopes will help create three million new apprentices by 2020, is due to come into force in 2017, with a view to creating millions of apprenticeships across the UK. The levy is expected to raise an estimated £3 billion by the end of this Parliament.

If your business has an annual payroll cost of less than £3 million, then you will not be required to pay the levy. If you have more than this, however, there will be a 0.5% tax on your payroll bill, which will be paid through PAYE.

The Government estimates that approximately 22,000 organisations will be required to pay the levy. Many smaller employers will be impacted as well as the large companies, as a workforce of 100 people and an average salary of just over £30,000 will take businesses over the threshold.

Employers that do not pay the levy will still be able to access government support for apprenticeships through the Digital Apprenticeship Service (DAS). Employers in England that pay the levy and provide apprenticeship training will receive a ‘top-up’ to a digital account. The training must be provided through an accredited provider and, at this point, it is presumed that HRMC will be responsible for enforcing the payment from the employer and ensuring payment to the training provider.

Some employers have voiced concerns over how funding will be distributed, as each course will need different periods of training time and different evaluation methods. For example, an apprenticeship in engineering may need 12 months, while some apprenticeships in sectors such as retail may need less time.

Potentially, it will be difficult to make a one-size-fits-all scheme translate into meaningful and empowering apprenticeships that benefit both employer and employee.

How Can You Use the Apprenticeship Levy?

Consider the areas in your business where training is most needed, to ensure that the apprenticeship levy works in favour of your organisation. It is possible that many employers will not recoup the levy that they pay, and will therefore simply see it as another employment tax.

What Should Employers Do to Prepare?

One of the key parts of preparation for employers is ensuring that you have the financial capability to pay the levy.

Start to think more broadly than the immediate view of an ‘apprenticeship’ as something for young starters. Consider what training your business has put off because of the possible cost, and ascertain what could be done as an apprenticeship so that you can get the best value.

If you’re not sure how best to prepare for the Apprenticeship Levy, or you’d like some advice taking on an apprentice, contact us by calling 0118 940 3032 or emailing sueferguson@optionshr.co.uk.

What Impact Will Brexit Have on Employment Law?

Although much UK employment law is derived from EU law, the UK’s withdrawal from the EU is unlikely in itself to have an immediate impact on employment law as most EU Directives are implemented in the UK by regulations or Acts of Parliament. It will be for Parliament to decide whether to retain, amend or repeal domestic legislation.

It is possible that the UK will be required to continue to implement elements of EU legislation as a condition of a negotiated trade deal between the UK and EU.

Many areas of domestic law that are derived from EU law have been heavily influenced by decisions of the European Court of Justice (ECJ), for example working time, TUPE and discrimination law. ECJ decisions will continue to apply in the UK until the Government or the UK courts determine otherwise.

What impact will Brexit have on EU nationals currently working in the UK?

It is not yet known what rules on immigration and free movement of people will be in place following the UK’s withdrawal from the EU. However, employers can reassure employees who are EU nationals that there will be no immediate change in their right to live and work in the UK. The same is true of nationals of the other countries of the European Economic Area (EEA) (Iceland, Norway and Liechtenstein) and of Switzerland.

EEA and Swiss nationals who have lived in the UK for five years or more as a “qualified person” have acquired the right to permanent residence. A qualified person is someone who is working, studying, self-employed, self-sufficient or looking for work. A person who has qualified for permanent residence can apply for a document certifying this.

The UK will have a period of up to two years within which to negotiate the terms of its withdrawal. The rights of EU nationals to come to the UK to live and work in the future will be a key element of the negotiations. It is likely that EU nationals who are already living in the UK will be afforded special status, with reciprocal arrangements for UK nationals living in EU countries.

One option for an immigration framework, in the absence of a negotiated deal allowing freedom of movement between the UK and the EU, is that the current points-based system that applies to workers from countries outside of the EEA could be extended to EEA nationals. For most employers, the main route for employing foreign workers under this system is by sponsoring skilled workers, where they can show that there is a shortage of suitably qualified applicants within the resident labour market. There is scope for a points-based system to be extended to allow the employment of non-skilled workers as well as skilled workers.

On 18 October 2016 we’ll be running our next Employment Law Update workshop, to bring you right up to speed on any changes that might affect your business. You can book your place online here.

 

Information Source: XpertHR

The Latest Legal Changes to Employment

Every year around April and October, changes are made to Employment Law that will affect some, if not all of your employees. In April we ran one of our popular Employment Law update workshops, to tell our clients and contacts what they need to know. If you missed it, here’s a summary of what we covered.

More changes will be happening later this year, so we’re running our autumn event on 18 October 2016 and we’ll send you a reminder nearer the time. In the meantime, if you have any questions about the latest changes and what you need to do about them, do get in touch.

Here are some of the issues we discussed at the recent workshop:

Statutory Rates – these usually change, but this year, statutory family-related pay and sick pay rates were frozen.

Postponing a Tribunal – under rule 30A of the Employment Tribunals Regulations 2013 for proceedings presented on or after 6 April 2016, changes have been made, in order to limit the number of postponements and adjournments that can be granted in a single case in the employment tribunal and introduce a deadline after which applications for a postponement will not be allowed. Employment tribunals must also consider making an award for costs where postponements are granted at late notice.

National Living Wage – this applies to all employees over 25 years of age. The new rate from 1 April 2016 is £7.20 per hour, and is expected to increase to £9 per hour from April 2020. Also from 1 April 2016, the penalty was set at 200% for the total underpayment, for each employee who has been underpaid. 300,000 employees will benefit from this increase, with employers needing to find an estimated £3 billion by 2020. The Government intends to align when the national minimum wage and national living wage rates are amended, to be April for both with effect from April 2017. It has asked the Low Pay Commission to recommend the rate of the national living wage and the national minimum wage for April 2017 and to provide an indicative rate of the national living wage for April 2018. The Commission is due to report back on its findings in October 2016.

Zero Hours Contracts – legislation came into force on 11 January 2016, which states that individuals on a zero hours’ contract must not be unfairly dismissed or subjected to a detriment for breaching an exclusivity clause.

National Insurance for under 25s – employer NICs have been abolished for apprentices under the age of 25. As part of the Government’s drive to encourage employers to create more apprenticeships for young people, from 6 April 2016, employers will not pay employer national insurance contributions for apprentices aged under 25.

New State Pension – a single-tier state pension was introduced on 6 April 2016, replacing the previous basic state pension and additional state pension. Employer-provided pension schemes will no longer be able to contract out of the state pension and receive a national insurance rebate. This means that, where an employer provides a previously contracted-out scheme, its employer and employee national insurance contribution liability will increase. Employers should ensure that employees are aware that there may be an impact on their pay.

The Gender Pay Gap – these new regulations will apply from 1 October 2016, for all private-sector and voluntary-sector employers with 250+ employees. Companies will be required to publish the gender pay gap as it is in the pay period in which 30 April 2017 falls.

If you think that your company and your employees will be affected by any of these changes, please do get in touch for a confidential chat. Call 0118 940 3032 or email sueferguson@optionshr.co.uk.