Yesterday was a relatively busy day for announcements regarding proposed changes to employment law. We have had the recommendations from an expert advisory group on welfare set up by the Scottish Government and the announcement of the UK Government's legislative agenda. The latter sets out the laws the UK government intends to pass in this final year of the Coalition government before the UK General Election in May 2015.
Whether the welfare experts' recommendations will be taken forward depends on the outcome of the Independence Referendum in September. But they do propose a number of radical changes if there is a "Yes" vote. The one that has had the most attention is that the National Minimum Wage (NMW) should match what is known as the Living Wage (currently £7.65) with incentives to assist employers to achieve this. The timescales for such a change to be implemented are (despite certain media reports) caveated by the need for the appropriate growth in the national economy. Given other proposals for change regarding the level of the NMW from the other main political parties, a significant increase is almost certain over the coming years.
On a related topic, the Queen's Speech indicated that further legislation to tackle breaches of the NMW will be forthcoming. The UK government has also indicated that it will crack down on abuse in zero hours contracts. Details of what this will actually mean are scant from the background papers and until we see the proposed legislation, we can only speculate whether the changes will have teeth or not.
Laws to "reduce delays in employment tribunals" are also promised. Given that the introduction of fees last year has led (according to recent statistics) to a drop of 79% of claims, you would hope that the Tribunal has considerably more scope to deal with matters quickly now anyway. So what these new proposals will involve is unclear but there are rumours that equal pay claim procedures will be streamlined.
The UK Government also has said that it will stop "highly paid public sector employees keeping redundancy payments when they come back to the same part of the public sector within a short period of time." The perception that some in the public sector benefit from large payoffs before starting back as "consultants" (often after only a very short break) is clearly a hot topic. Whether the issue is really a problem or whether the impending election is a more pressing factor is debateable.
Overall, as with all Queen's Speeches, there has been much rhetoric but little detail. Once we see the actual legislation and the outcome of the Referendum, the position will become clearer. The only change that seems certain is that the National Minimum Wage will rise possibly above inflation over the coming years.
Noele McClelland is a Partner and Head of Thorntons Employment Law team. For more information on zero hour contracts please contact Noele on 01382 229111 or email nmcclelland@thorntons-law.co.uk
